Mortgage Refinancing - 3 Strategies to Lower Your Monthly Mortgage Payment

If you are a homeowner in need of a lower monthly payment, mortgage refinancing could be your answer. There are a number of ways to reduce your payment amount, even if you do not qualify for a lower interest rate. Here are several strategies to help you reduce your monthly payment and save money when mortgage refinancing.

I. Mortgage Refinancing For a Lower Interest Rate

The most common way for homeowners to lower their mortgage payment is by qualifying for a lower interest rate. This is the most desirable method as the amount of finance charges you pay over the life of the mortgage decreases significantly by qualifying for lower interest rate. If your financial situation has changed since purchasing your home, you might easily qualify for a better interest rate when mortgage refinancing.

II. Mortgage Refinancing to Consolidate Your Bills

If you carry a significant amount of credit card and consumer debt, mortgage refinancing with cash back could help you take back control of your budget and save you a lot of money. When you take cash back when mortgage refinancing, you are borrowing more with the new loan than you owe on your existing mortgage. The difference between your two loans is paid to you by the lender and you can use this money to pay off your existing debts. The advantage of consolidating your debts when mortgage refinancing is that you will only have one payment to make each month that will be significantly lower than what you are paying out now. You will also gain a tax deduction for the entire amount of your debts when mortgage refinancing.

III. Mortgage Refinancing - Lower Your Payment Amount by Extending the Term

Term length is the amount of time the mortgage refinancing lender allows you to repay the loan. The most common term lengths are 15 and 30 years; however, there are now 40 and 50 year mortgages that allow you to lower your payment as much as an interest only loans, but without the risk of adjustable interest rates. If you already qualify for a lower interest rate when mortgage refinancing, choosing a longer term will lower your payment even more. If you are unable to qualify for a lower interest rate, you can still significantly reduce your payment amount by choosing a 40 or 50 year mortgage.

The downside of choosing a long term mortgage is that you will pay more to the lender for financing your mortgage. If you plan on mortgage refinancing again when your financial situation improves, long term mortgage refinancing is an excellent alternative to riskier interest only and option loans. You can learn more about mortgage refinancing while avoiding costly mistakes by registering for a free mortgage guidebook.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Posted in: Lower,Monthly,Mortgage,Payment,Refinancing,Strategies