If your mortgage payment is dominating your life and your thoughts…

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Driveway to front walkway view of partial front of residential home during early autumn season.

It’s time to reduce it!

When you obligated yourself to that monthly payment it fit nicely into your budget. But then… Things happened. Perhaps it was a job loss or even just a reduction in hours. Perhaps it was an illness or an accident.

Perhaps you had an adjustable rate mortgage that you couldn’t refinance when it reset because your house had gotten underwater or you were temporarily unemployed.

If your mortgage payment is dominating your life and your thoughts, but you really don’t want to give up your house, now is the time to lower those payments.

Method #1: Refinance

No one really expected that interest rates would stay low for so long – and certainly didn’t expect that they’d be lower now than they were 2 years ago. But they are. In fact, you could get an interest rate as low as 3.5%.

What does that mean in terms of real dollars? Here’s an example:

If you took out a 30-year fixed rate mortgage for $250,000 in January 2014 you probably paid the going rate at that time: 4.43%. Today, provided your credit rating is the same, you could refinance at 3.5% and save about $125 per month.

Would an extra $125 in your pocket every month help ease the strain? That’s comparable to getting a pay raise of about $165 per month (or more, depending upon your tax bracket).

You may be paying more than 4.43% – if so, your savings would be even more.

Method #2: Get rid of your mortgage insurance.

Did you get stuck paying mortgage insurance because you had less than 20% to put down on your house? If your mortgage was for $250,000, you’re paying approximately $225 each month.

If you have a conventional loan, you’re eligible to have that insurance dropped once you have 20% equity and have owned the house for at least two years. Since homes are once again appreciating in value, you may have 20% equity and not even know it.  (If you have an FHA loan, you’ll need to refinance into a conventional loan, as all FHA loans carry mortgage insurance.)

Talk with your favorite real estate agent about the probable value of your home. Then talk with your lender to learn the steps required.

If you have mortgage insurance, refinancing can give you a double benefit…

You’d save on the interest payment and save again on the mortgage insurance. In the above examples, the two combined would be $350 each month. What could you do with an extra $4,200 each year?

 

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R.M.L.O

Homewood Mortgage,LLC

O: 469.621.8484

C: 469.438.5587

F: 972.767.4370

18170 Dallas Parkway

Ste. 304

Dallas, TX 75287

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