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If you’re watching your budget, an excellent goal for 2022 might be to lower your mortgage payment. It might seem impossible, but you can do it. Use these two tips to reduce your mortgage payment amount.
One way to lower your mortgage loan payment is by extending your mortgage term. The longer the term, the lower the monthly payments. An extension requires modifying your current loan or potentially a new loan. By spreading the payments out over time, you’ll pay more in total interest, but you’ll have more money for other things every month.
Refinancing can help lower your payments in two ways. First, it can reduce your interest rate, which can lead to savings on your monthly payments and on your overall interest payments on the loan. Reducing the interest rate by even 1% can lower your payment by hundreds of dollars a month.
Second, you can get rid of your mortgage insurance if you have it. If you put less than 20% down on your home loan, lenders tack on mortgage insurance for anywhere from 11 years to the life of the loan. This insurance protects the lender. Homebuyers who put down less than 20% have less skin in the game and, statistically, are more likely to default on a loan. Hence the mortgage insurance. Refinancing can help you get rid of that premium you pay monthly.
Your home is your most significant investment, and most likely, your largest monthly expense. However, there are ways to lower the amount you pay so you can save that money or use it for other things. Contact the team at Midland Mortgage Corporation to find out more about how you can lower your mortgage payments.