How to Lower Your
Mortgage Payment

How to Lower Your Mortgage Payment:  If you need a lower mortgage payment there are some options available to you. Are you a homeowner that is struggling to make your mortgage payments? Have you fallen behind on your mortgage payments? Have you been able to keep up with your mortgage payments but you are underwater on your mortgage, i.e., you owe more money on the home than it’s worth? Are you still paying a high interest rate and simply need to lower your interest rate to today’s levels, thereby lowering your mortgage payment?

How to Lower Your Mortgage Payment
Mortgage Programs

It appears that the HAMP and HARP programs previously available to homeowners through the Obama administration have ended.

To find out if your loan is held by Fannie Mae, click here.
To find out if your loan is held by Freddie Mac, click here.

FHA - Federal Housing Administration’s Streamline Refinance Program

Get information re: program here. This is a program designed for FHA insured homeowners (so if you’re home is a conventional mortgage via Fannie Mae or Freddie Mac you wouldn’t qualify for the standard terms), to refinance.

Here are some of the guidelines for this program:

• The home must be your principal residence.
• Perfect, on-time 12-month payment history of your mortgage is required.
• You DO NOT need to get a home appraisal.
• They DO NOT care if you are underwater on your mortgage.
• It comes with either a 15 or 30 year term.

THE BIG BONUS: NO verification of Job, Income or Credit is required! Yippee!

If you have a conventional loan you wish to refinance with an FHA refinance loan, you'll need to apply with the usual employment verification, credit check, debt ratio requirements and other considerations.

How to Lower Your Mortgage Payment
Other Ways

Your situation may not be as drastic as some of the above, but you still may wish to find ways to lower your mortgage payment, even if you can chip away at it by $30/month to $150/month per action. Well, here are some other options available for you.

HOMEOWNERS INSURANCE

1. When was the last time you checked to see if your current insurance company was giving you the best rate on your Homeowner’s Insurance Policy? Has it been more than 5 years? Pull out that policy and get a quote from at least 3 other carriers to see if you can get a better rate. If you do receive a better rate for the same coverage, get it in writing. Then go back to your current carrier, and say, I just shopped around for a better rate, and “so and so” was able to offer me “such and such” for the exact same coverage. Unless you can match it, I’m switching carriers. Of course, if you say this, you must be willing to do it. If an Insurance Company of equal credibility is offering you a better rate for the same coverage, that will lower your mortgage payment and/or annual payment, there is no reason not to switch!

2. Do you know how much your Homeowner’s Insurance deductible is? Pull out your policy and take a look. If you can’t lay your hands on it, call your Agent and ask. If it’s $500 per year, consider increasing it to $1000 per year. Unless you live in a major disaster area and have frequent occurrences, you should consider how often you’ve actually had to put in a claim. Making this one small change will probably save you over $200 per year! (I saved $219/year or $18.25/month on my mortgage payment by doing this with mine.)  If your Homeowner’s Insurance is still coming out of your escrow, this will lower your monthly Mortgage Payment. If your home is paid off, it will lower the amount that you pay each year to the Insurance Company.

PMI

Are you still paying for PMI – Private Mortgage Insurance? If you made a down payment of less than 20 percent, your lender probably required that you pay PMI to protect them in case you defaulted on the loan. But, once your mortgage value falls below 80 percent (appraised value), you can ask the lender to drop/cancel this insurance. You will have to pay for an appraisal of your property. Since many home values are low these days, you may wish to check with a site like Zillow.com to get an estimated value first.

Wind Loss Mitigation

I am about to tell you about a lesser known way to lower your mortgage payment.  Is your roof new, fairly new or in good condition?  This may qualify you for a decrease in your Homeowner's Insurance Premium!  I know of what I speak because I had my premium decreased by $801.00!  Divide that $801 by 12, and I saved $66.75 per month on my mortgage payment.  Here's how a Wind Loss Mitigation works:  

You will need to have a Wind Mitigation Inspector come to your home and inspect your roof and attic.  This will cost you on average @$90 to $150.  Well worth it if you receive a great discount.  In fact, my inspector made me the following guarantee: If I don't save you at least the amount of my fee ($95.00), then the inspection is free.  Well, since my premium was decreased by $801.00, I came out $706 to the greater, and he kept his $95 dollars.  Anyway, after the inspection, the inspector will provide you, and/or the Insurance Company (whichever you request) with a Uniform Mitigation Verification Inspection Form and Report along with Photos.  He can email or fax this report for speed.  Your insurance Agent will then go to work calculating your deduction (if any) based on the condition of your roof, and will get back to you with their findings.

I highly suggest that first, you call your Insurance Agent to verify that they offer this discount, because I don't know if this varies by State/Region.  Then, ask your Agent if they can recommend a Wind Mitigation Inspector.  This is how I received my referral.  Since the Insurance Company gives them so much business their rates are usually lower than the ones you find elsewhere.  Ask for at least 2 names so you can get the lowest rate, or go with one that can accommodate your schedule.

Flood Insurance

Are you paying for Flood Insurance although you're not in a Flood Zone and are not required to pay for it?  Okay, I understand that fear may be motivating this decision, but how many years have you been paying for it without ever having a flood? If you are well off, and money is not an issue, keep paying for it - but if that was the case, you probably wouldn't be on this site ☺.  If times are tough and/or you need to pinch every pinny, consider dropping the Flood Insurance, even for 1 year, until your finances turn around. This will lower your mortgage payment each month and lighten your monthly load!  Don't know if you're in a flood zone?  Well, FEMA now let's you enter your address to see if you're in a flood zone.

Active Duty Military and their Families

The Servicemembers Civil Relief Act gives active duty military service members and their families specific protections and rights for their mortgage loan. You may qualify for: a cap on interest rates, waiving of fees and suspension of Foreclosure Proceedings. Contact your lender for details.

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