There are a few ways to lower your monthly mortgage payment. If you have suffered an unexpected event that is causing your money to be tight, you may be looking for ways to reduce your monthly expenses. Before you default on your payments or file for bankruptcy, consider contacting your lender to discuss measures to lower your payments. Refinancing your mortgage payment can lower your monthly mortgage payment by taking out a new mortgage loan with a lower interest rate. Refinancing can help you achieve more financial stability, but you should be aware of some important aspects involved in refinancing a mortgage loan.
New Loan, New Fees
When you finance a mortgage loan, you are creating a new loan that will replace your current loan. New mortgage loans can require you to pay for inspection fees, appraisal and closing costs on the new loan. Many loans have hidden fees in the fine print that can charge you for terminating your existing loan early. Terminating a loan early can cost you $1-2,000 in fees called an exit, or deferred establishment, fee. Loans may also include an account closing fee that could cost you hundreds of dollars. These fees and costs are often not disclosed at the time you apply for a mortgage loan.
Not all loans are the same and the lender plays a big role in the details of your loan. Many lenders are offering refinancing incentives that will waive their own fees or refund any of the hidden costs associated with your existing loan. Refinancing can be a great tool to lower your monthly costs before you end up in default or foreclosure. Before refinancing your mortgage loan, it is important you review the details of your existing loan as well as the new loan you are considering.