The housing market has been in a state of flux for a while now, and that is no secret. Property values are dropping, and more and more homeowners are finding themselves underwater on their mortgages. If you’re one of these homeowners, don’t panic! There are ways to work around your situation and keep your home. In this blog post, we will discuss six ways that you can reduce or eliminate your mortgage payments. Keep reading for helpful tips!
Decreasing your mortgage as a homeowner – How to do it
If your home is worth less than what you paid for it, you’re not alone. Millions of Americans are currently in the same boat, and the housing market is still in a state of flux. However, there are ways to work around your decreasing mortgage as a homeowner. From using a free calculator for your mortgage rates to looking into a refinance, to even considering a short sale – there are options for you! Having a mortgage is a huge responsibility and one that shouldn’t be taken lightly. If you’re struggling to make your payments, don’t hesitate to reach out to your lender or a housing counselor for assistance.
#1 Using an online mortgage calculator
One way to work around your decreasing mortgage is by using a free online mortgage calculator. This will help you determine what your new monthly payment will be, as well as how much interest you’ll be paying. You can also use this calculator to compare different mortgage terms and rates.
Simply enter your loan amount, interest rate, and loan term into the calculator and it will do the rest! This is a great way to get an idea of what your new monthly payment will be and see if it’s something you can afford.
#2 Consider refinancing
If you’re struggling to make your mortgage payments, you may want to consider refinancing. This is when you take out a new loan with a lower interest rate and use it to pay off your existing mortgage. Refinancing can help you save money on your monthly payments and may even help you pay off your mortgage faster!
When considering refinancing, be sure to compare rates and terms from multiple lenders. You’ll also want to make sure that you have enough equity in your home to qualify for a refinance. If you’re not sure where to start, you can use an online tool like Credible to compare rates and terms from multiple lenders in just minutes.
#3 Considering a short sale
If you’re unable to make your mortgage payments and are at risk of foreclosure, you may want to consider a short sale. This is when you sell your home for less than what you owe on your mortgage and use the proceeds to pay off the loan. While a short sale will damage your credit score, it’s often better than going through foreclosure.
If you’re considering a short sale, be sure to speak with your lender first. They may be willing to work with you to avoid foreclosure. You’ll also want to hire a real estate agent who has experience with short sales.
#4 Renting out part of your home
If you have extra space in your home, you may want to consider renting it out. This can help you offset your mortgage payments and make it easier to afford your home. Just be sure to check with your lender first to see if they allow this.
If you’re considering renting out part of your home, be sure to screen your tenants carefully. You’ll want to make sure they’re responsible and will pay their rent on time. You should also have a written lease agreement that outlines your expectations and rights as a landlord.
#5 Taking out a home equity loan or line of credit
If you have equity in your home, you may want to consider taking out a home equity loan or line of credit. Essentially, home equity loans will give you the money you need to make your mortgage payments and avoid foreclosure. Just be sure to shop around for the best rates and terms before you apply.
You should also be aware that taking out a home equity loan or line of credit will increase your monthly payments. If you’re not sure you can afford the additional payment, you may want to consider another option.
#6 Renegotiating your mortgage terms
If you’re struggling to make your mortgage payments, you may be able to renegotiate your terms with your lender. This could include things like extending the term of your loan or getting a lower interest rate.
Renegotiating your mortgage terms can be a great way to make your payments more affordable. However, it’s important to remember that this will also extend the length of your loan and increase the total amount you’ll pay in interest.
If you’re struggling to make your mortgage payments, there are a number of options available to you. Make sure that you compare all of the rates you get, as well as the terms before making a final decision. You should also speak with your lender about your options and see if they’re willing to work with you.
