Mortgage payments represent the largest monthly expense as you buy a house. In many cases, homeowners continue making mortgage loan payments for up to 30 years. If the monthly mortgage payments happen to be excessive, you may eventually be unable to afford it, with no option but to either sell the house or discover a means of reducing the payments. Here are some tips for reducing your mortgage payments every month.
Making a bigger down payment
Needless to say, the more money you borrow the more you will have to pay back and the higher your mortgage payments. If you wish for the bank to lend less money, you must make a larger down payment. This is possible if you have a significant amount of money saved. Making a bigger down payment will cut down the interest rate on the loan and result in savings worth thousands over the loan term.
Improving your credit score
A larger down payment is not the only factor that determines the interest rate on the loan; your credit score also matters. The higher your credit score, the lower your monthly mortgage payments will be. Therefore, it is crucial that you maximize your credit score before applying for a mortgage. Paying all your bills in a timely fashion and paying off maximum amount of debt are good ways of boosting your credit score.
Refinancing the mortgage to a lower interest rate
You may choose to replace the current mortgage with one that bears a lower interest rate. Before you opt for this, consider the loan period along with the difference between the current interest rate and one that you may qualify for. If refinancing to a new loan is worth it, go for it, by all means.
These tips for reducing your mortgage payments every month are likely to pay dividends, so follow them and make the home buying process easier for yourself. You can get in touch with me for any assistance or advice about buying or selling a home in Greater Boston. Feel free to call me or send me an email or get in touch on Facebook.
For more great tips and local information about Boston and the South Shore, sign up for my monthly newsletter. I promise I won't spam you.