5 Simple Actions That Will Make Paying Your Mortgage Easier
Let’s face it, there is a lot more to pay for these days than in the past. Not only are there basic living expenses to account for, there’s also a growing list of expenses that you can’t live without in this era such as your cell phone bill, cable bill, internet bill, car insurance bill, student loan debt– the list goes on and on. Even with an affordable mortgage, it’s easy to get off track considering the mountain of expenses that you may already have. What if there was a way (or many ways) to help lower your mortgage payments and make them more manageable? While refinancing is a more common option, there are some cost-cutting methods to take into consideration when budgeting all of your expenses.
Modify your loan.
If you are having trouble making your payments on time, or are going through a particularly rough time in your life, you just may qualify for a loan modification. Depending on which program you work with, you could potentially qualify for a lower interest rate, forgiveness of part of the principal, or an extended loan period and lower monthly payment.
Downsize your home.
If you’re really having trouble making your mortgage payments every month, perhaps it’s time to downsize. If you get a substantially less expensive home, you can put the money saved toward a down payment, therefore lowering the amount you’ll need to borrow for the new house.
Avoid paying private mortgage insurance.
If you have to borrow more than 80% of your home’s price from a lender, you are forced to pay private loan insurance (PMI) which typically consists of 1-5% of your loan. To avoid paying for PMI, it is advised to put at least 20% down when you buy your home. If you can’t afford that, consider buying a home that is slightly lower in price, as paying PMI can add up in the long run. If you’ve already bought your home and want to stop paying your PMI, consider speeding up your mortgage payments to get your balance below the 80% line (you will also need a credit score of 700 or higher).
Make an additional one-time payment.
If you find you suddenly have access to a decent amount of money, consider making one extra payment to your mortgage. Due to this extra payment, a certain percentage will come out of all of your future monthly payments—it may not seem like a lot, but $100 (or whatever amount results from your additional payment) less every month will really add up over time, and make monthly payments more manageable.
Take advantage of credit card offers.
Depending on your specific credit card, you may be able to pay off your mortgage with 0% interest on the card. There are a couple different strategies to using credit cards to make the most of your interest rates. Before implementing credit cards into your mortgage payments, be sure to fully understand the regulations of the card. Putting extra credit card payments into the mix requires you to be extremely organized and diligent about making payments.
Would you use any of these methods to help make your mortgage payments more affordable? Let us know in the comments below!