The global pandemic has changed a lot of things, including the economic state of the world. That’s why many people have been looking to cut costs where they can. This includes revisiting the likes of mortgage refinance rates. In some cases, people are simply looking to find ways to lower their mortgage interest payments. Working with an experienced mortgage broker will certainly help move that along.
Read on for some tips on achieving a lower mortgage interest payment:
Go Ahead and Refinance Your Mortgage
This is a great option for people with good credit. Monthly mortgage payments will definitely lower through refinancing. If you’re unfamiliar with refinancing, it basically means less money is paid over your loan’s life. That’s due to less interest you will end up paying.
It should be noted that good credit is generally necessary when it comes to qualifying for refinancing. When a homeowner has issues with their credit, a great alternative is to approach a lender and look into refinancing programs from the government. Should those not work out, there can also be other choices that a broker can likely help explore.
Private Mortgage Insurance Set Aside
Also known as PMI, private mortgage insurance generally becomes part of a loan when a home is purchased with no down payment of 20%. It’s a special insurance type meant for the lender to have protection against any losses, should the homeowner default on their loan. It can add anywhere from hundreds all the way to thousands to the annual mortgage of a home.
PMI can be eliminated if there’s a conventional loan in place, which involves paying back enough mortgage to get 20% minimum equity in the home. That payment is grounds to ask the lender for PMI to be removed from the loan, since it doesn’t automatically happen when the payment has been made.
Prolong the Lifetime of a Loan
The existing mortgage certainly has some years left on it. Depending on what that number of years comes out to be, there could be a very considerable decrease in expenses in a month. That’s achieved best through increasing the loan’s actual terms. If there’s a 20-year mortgage in place, for example, extending to 30 years or doubling it to 40 will lead the payment to be slashed.
If there are additional payments made due to surplus funds, like a sudden windfall or a bonus at work, that will also contribute to the faster payment of the total due. Of course, it’s a give-and-take situation; the trade-off, in this case, means an increase in the interest rate. If a bigger liquidity is more of a priority due to other expenses or needs, when a term is longer, then end-of-month cash flow will increase. That’s essentially more funds in the homeowner’s pocket every month.
Mortgage Broker in Royal Oak Michigan
Mortgage interest payment can certainly add up, and at some point, it may be rather tough to maintain. Luckily, there are ways to lower the interest payment made towards a mortgage in a month. This includes eliminating private mortgage insurance, prolonging a loan’s lifetime, and mortgage refinancing.
In need of help from reputable mortgage brokers in Michigan? Mortgage City, based in Royal Oak, MI, has you covered! We have one goal: to fulfill your financing goals and make you a happy homeowner. Contact us today at (248) 930-8709 to learn more!