Tips for lowering your mortgage payment

If you are interested in paying less money for yourmove within nine years so it may not make sense to
mortgage, you are probably trying to lower yourpay a higher interest rate for a 30-year fixed-rate
mortgage payment. There are a few different waysmortgage when you are not going to be in the home
you can lower your monthly mortgage payment. Youthat long. Doing so may be costing you money.
can change the term of your mortgage. Since theConsider refinancing to an ARM instead. You will get a
balance of your mortgage is spread out over a longerlower rate as well as lowering your monthly mortgage.
period of time, your payment is lower.You also have to think about the fact that if you are
If you have a thirty year mortgage and one of youronly going to be in your home for a few more years, it
financial goals is long-term savings, you may want tomay make sense not to refinance out of your ARM.
consider shortening your term to twenty or evenThe equity you have in your home can act like a
fifteen years. Your payment will be higher, but you willsavings account that you could access through a
pay much less in interest over the life of the loan,home equity loan or a cash-out refinance.
saving you thousands of dollars in the long run. InThis is usually done when you want to finance an
addition, you can lower your payment by refinancingimportant home improvement, pay for college or pay
an interest-only loan.off high-interest credit card debt. Whatever your
With an interest-only loan, the minimum amount youreason, this may be the right option for you.
are required to pay is the amount of interest for aThe interest you pay on a credit card is not
certain period of time, though you can pay as muchtax-deductible and you pay a higher rate than you
principal as you like. One helpful too is the refinancewould on your mortgage. Consequently, credit card
calculator that will allow you to see how you coulddebt is often referred to as bad debt whereas your
lower your monthly mortgage payment. Keep in mindmortgage is considered good debt. Using your home
that it is important to consider what mortgage ratesequity to pay off your high-interest credit card debt
are doing. Since mid-2004, the Federal Reserve hascan save you money in the long run.
raised interest rates several times and is expected toUsing your home equity, rather than your credit cards,
keep raising rates in the near future.to finance expensive purchases can also be a smart
This means that if you have an adjustable ratemove.
mortgage, it may adjust to a rate that's higher than aDeciding on when to refinance your mortgage will
fixed-rate mortgage. You should consider refinancingdepend on the circumstances of your situation: how
to a fixed-rate loan. Additionally, you need to considerlong you'll be in the home, what your financial goals are,
how long you plan on being in your home. Many peoplewhether interest rates are dropping, and so on.