Lower Your Mortgage Payment

Bad housing news is everywhere these days. People across the country are having trouble making their mortgage payments. But even in good economic times homeowners look for ways to lower their mortgage payments. That comes as no surprise as a home mortgage is usually the average person's largest monthly payment.

So whether you're in real financial trouble, or just looking to create a little breathing room in your monthly budget, this article is designed to help by you learn the ways that you can lower your monthly mortgage payment.

Most people will turn to refinancing when looking for ways to lower their monthly mortgage payments. And that's not a bad strategy when interest rates are low, as they are at the time of this writing. Refinancing will lower the principal and interest part of your mortgage payment by lowering the interest rate you are paying.

Keep in mind that your mortgage payment will only drop if you are keeping the term of your mortgage the same or longer. If you're going from a 30 year mortgage to a 15 year mortgage, for example, your payment will likely rise, although the amount of interest you pay over the life of the loan will decrease, often dramatically.

If you currently have a ten or fifteen year mortgage, you can lower your monthly mortgage payment by refinancing to a twenty or thirty year mortgage.

If refinancing isn't possible, or if it doesn't make financial sense because the interest rate differential isn't high enough, there are other ways to lower your mortgage payment. To do that you will want to focus on the other things that make up your mortgage payment.

Private Mortgage Insurance - Many lenders require private mortgage insurance when the buyer is putting down less than 20% as a down payment. If this was you when you took out your mortgage, you probably have PMI as part of your payment. PMI rates can vary, but a rate of around .5% of the mortgage amount is not uncommon.

If your equity in your home has risen to over 20% through some combination of paying down the mortgage and an increasing home value, you should be eligible to have the PMI removed as part of your mortgage payment. Contact your lender and see what the conditions of your mortgage are and how you can go about making this change.

Homeowners Insurance - Typically, your mortgage company pays your homeowners insurance and the amount is included as part of your mortgage payment. Often this means out of sight, out of mind, for the homeowner. Check and make sure that your homeowners insurance rate is competitive. Also make sure that you have all the discounts for which you are eligible through your insurer. Finally, check on the size of your deductible. If you have a very low deductible, you can raise it and lower the price of your insurance, thus lowering the size of your mortgage payment.

Property Taxes - Like insurance, most homeowner's pay their property taxes through their insurer. Unfortunately, there's not a whole lot than can be done about property taxes, except petition that your appraisal is too high. If you live in an area of the country that has been hit hard by the housing crisis, this might not be a bad step to take. You'll need to provide evidence of the case you're making, namely through the sales prices of houses in your area. If you're successful, you will lower your property taxes, which will in turn lower your house payment.