Lowering Mortgage Payments Without Refinancing

exchanging money

A mortgage is a long-term commitment, and for some people, finances can naturally change over the life of a longer mortgage loan. In some situations, borrowers will find themselves in a financial position where they’re really struggling to make monthly mortgage payments work within their budget.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to offer solutions. The primary outlet for many people here is a mortgage refinance, something we’ve discussed at length in these blogs in the past – speak to our brokers about how refinancing might benefit you. But did you know there are other options for helping lower mortgage payments without refinancing? Here’s a brief look at a few of these options.

Loan Modifications

In some cases, a severe financial hardship can render your mortgage payment no longer affordable. In these cases, you may qualify for a loan modification, a situation where a lender helps restructure your loan to lower the payment.

You don’t always have to be in default to request a modification. You may be able to request one if you’re facing an imminent reduction to income like the loss of a job or retirement, and it’s always a good idea to get ahead of these issues – contact your lender as soon as you know this situation might be taking place.

Mortgage Insurance

In other cases, you might be able to eliminate private mortgage insurance if you’ve been paying it. This is often an option when home value is rising rapidly – this and your credit score will play a big role. If you have solid equity in your home and a good score, you can often cancel mortgage insurance and lower your monthly payment.

Is the Mortgage to Blame?

In many situations, the mortgage becomes the whipping boy for what’s actually significant budgetary concerns in other areas. This could be credit card debt or other financial concerns, and in some cases, prioritizing ways to attack this debt can do much more to improve your monthly flexibility than lowering the mortgage or putting your home equity at risk. Considering that credit card debt is unsecured and mortgage payments are not, it’s often advisable to prioritize the mortgage if you have to choose.

To learn more about lowering monthly mortgage payments, or to speak to one of our brokers about refinancing options, call us at Altius Mortgage today.

Learning the Basics of Down Payments

house

When looking for a new home, particularly their first, many people are naturally concerned about the down payment. This number, which stands for the amount of cash you put down up front when buying a home, can be intimidating for many homebuyers looking to set their families up for the next several decades.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help with this concern. Our mortgage brokers will help walk you through the various options you have for a down payment when it comes to a mortgage loan, and help you make the right decision. Here are some basics to know about the down payment.

Standard

In most traditional loan situations, lenders are looking for 20 percent in a down payment. If your home costs $400,000, they’ll be looking for an $80,000 down payment. Having this amount available for a given home will increase your chances of loan approval, and will also likely earn you a better mortgage interest rate. It will also likely lower your upfront and ongoing fees, get you more equity in the home right away and start you off with a lower monthly payment.

Remember, though, that there are other big payments up front, such as closing costs and earnest money. Because all these combined can be an issue for some people, let’s look at a few of the options out there for a lower down payment.

Lower Options

The Federal Housing Administration (FHA) helps home buyers, particularly those buying for the first time, get approved for much lower down payments, often as low as 3 percent. The FHA guarantees portions of the loan, allowing lenders to accept a much lower down payment. Fannie Mae and Freddie Mac, the two government-sponsored companies that drive the credit market, also offer 3 percent down payments for some loans. In addition, if you’re an active or retired service member or live in a rural area, you might have access to other special programs with low or no down payments.

Fees and Insurance

One of the caveats of these lower programs: You may pay in other areas for the guarantee the government is giving you. There will be an upfront fee, and you may have to pay private mortgage insurance. This won’t always be the case, but be sure to check in advance. You may also pay a higher interest rate for the life of the loan due to higher risk for the lender.

Choosing

It’s always tempting to go for lower upfront costs, but the key to building long term net worth is buying smart. Lenders have to disclose all fees, so check these over carefully in advance and explore your options.

For more information on down payments, or to speak to our mortgage brokers about any of our other services, contact the pros at Altius Mortgage today.