Homeowners always look for ways to lower their mortgage payments. Considering a refinance is one option, but it’s not the only way to lower your mortgage payments without refinancing. Here are a few other ways you may be able to lower your monthly mortgage payment and how to decide if refinancing is right for you.
Government Assistance Programs
If you are struggling to make your mortgage payments, there are a number of government assistance programs that may be able to help you.
The Making Home Affordable program offers a number of different options for those who are struggling to keep up with their mortgage payments. One option is the Home Affordable Modification Program (HAMP), which can lower your monthly payments to a more affordable level. Another option is the Home Affordable Refinance Program (HARP), which allows you to refinance your mortgage even if you owe more than the value of your home. There are also programs available from the Veterans Administration and the Department of Agriculture that can help those who are struggling to make their mortgage payments.
If you are having difficulty making your mortgage payments, it is important to talk to your lender about all of the options that are available to you. You may be able to lower your payments without refinancing by taking advantage of one of these government assistance programs.
Contact Your Lender
If you’re struggling to make your mortgage payments, the first step is to contact your lender. Many lenders have programs in place to help homeowners who are struggling. Some of these programs may allow you to lower your payments for a short period of time, while other programs may offer more long-term relief. Your lender may be able to offer you a forbearance agreement. This means that your payments will be temporarily lowered or suspended for a period of time. During this time, you’ll still be responsible for paying the interest on your loan, but you won’t have to make any principal payments. Forbearance agreements are typically used as a short-term solution to help homeowners get back on their feet after a financial hardship. If you’re unable to make even reduced mortgage payments, your lender may also offer you a loan modification. A loan modification permanently changes one or more terms of your mortgage loan, which may lower your monthly payments. Loan modifications are usually offered to homeowners who are at risk of defaulting on their loans.
If you’re having trouble making your mortgage payments, don’t wait until you’re behind to contact your lender. Many lenders are willing to work with homeowners who are having difficulty, but they can’t help if they don’t know that there’s a problem.
How to Lower Mortgage Payments Without Refinancing
Bi-weekly payments are one of the easiest and most effective ways to lower your mortgage payments without refinancing. Instead of making one monthly payment, you make two payments each month, half the size of your regular payment. This simple change can save you thousands of dollars in interest and help you pay off your mortgage faster. To make bi-weekly payments, you simply need to divide your regular monthly payment in half and send in that amount every two weeks. Most lenders will auto-draft the payments from your account, or you can set up a schedule with your bank to make sure the payments are made on time. Making bi-weekly payments will shorten the term of your loan and save you interest, but it does come with some drawbacks. Your mortgage lender may charge a fee for setting up bi-weekly payments, and if you ever miss a payment, you could be charged a late fee. Bi-weekly payments may also not be an option if you have an adjustable-rate mortgage.
If you’re looking for a way to lower your mortgage payments without refinancing, making bi-weekly payments is a great option. Just be sure to do your research and understand the potential fees and penalties before you make the switch.
Make Extra Payments
If you want to pay off your mortgage faster, one option is to make extra payments on your principal each month. By doing this, you will pay down the loan and build equity in your home much faster than if you simply make your regular monthly payment. There are a couple of things to consider before you start making extra payments, though. First, check with your mortgage lender to see if there are any prepayment penalties associated with your loan. Prepayment penalties are fees that the lender charges if you pay off all or part of your loan before the agreed-upon term is up. If there are no prepayment penalties, then extra payments are a great way to reduce the interest you pay on your mortgage and shorten the overall term of the loan. Another thing to consider is how you will make the extra payments. You can write a separate check each month for the amount that you want to apply to principal, or you can increase the amount of your regular monthly payment. If you increase your monthly payment, just be sure to specify that the additional amount is to be applied to principal only.
Consider a Shorter Loan Term
By opting for a shorter loan term, you can often snag a lower interest rate and thereby lower your monthly mortgage payment. Of course, you’ll pay more in interest over the life of the loan because you’re paying it off over a shorter period of time, but if your goal is to lower your monthly payment, this option is certainly worth considering.
Refinance your mortgage
You can lower your mortgage payments without refinancing by making bi-weekly payments, paying points, or getting a shorter loan term. Bi-weekly payments: You can make your mortgage payments every two weeks instead of once a month. This will shorten the length of your loan and help you pay it off faster. Paying points: You can pay points to lower the interest rate on your loan. One point is equal to 1% of the loan amount.
Shorter loan term: You can refinance to a shorter loan term to lower your monthly payments. A shorter loan term will also help you pay off your loan faster.