Tips On Paying And Reducing Monthly Mortgage Payment
The monthly mortgage payment is one of the most expensive debts most of us pay each month. Unfortunately, the recent housing and economic crisis has left many homeowners struggling to keep up with their mortgage payments. If you are on a tight budget, there a number of ways you can reduce your monthly mortgage payments and alleviate the overwhelming financial stress. Below are a number of tips on paying and reducing monthly mortgage payments.
1. To counter the effects of the housing crisis and prevent foreclosures, the Federal Government and mortgage lenders have come up with mortgage programs that allow homeowners to take advantage of reduced mortgage interest rates. If you are having troubles paying your mortgage, this is a good time to approach your lender about refinancing your mortgage for a better rate. By refinancing, you will have a lower monthly mortgage payment.
If possible, try to get a long term fixed mortgage such as a 30 year mortgage because a fixed rate will not fluctuate if the markets start to decline. As well, if you are shopping your mortgage around for a good refinancing deal, check to see if a or lender will waive such fees as the application fee. Getting a low interest rate and avoiding extra fees are key factors to getting a good mortgage refinancing deal.
2. A helpful tip on paying your mortgage payment is to pay a significant amount on the principle of the balance owing. If you pay a large amount on the principle, you may be able to get rid of the mortgage insurance payment which will decrease the amount you pay each month.
3. The longer you have a mortgage, such as a 30 year fixed rate mortgage, the less you will have to pay monthly. If you are applying for a mortgage or refinancing, try to get a long term mortgage. As well, if you can afford it, put a large chunk of money down on the mortgage as it will lower your monthly payments.
4. Often people find them in situation where they cannot make their mortgage payments because they have too much debt. For instance, credit card bills, student loans, medical bills, and the bills racked after purchasing and etc, can be financially overwhelming. One solution is to get a debt consolidation mortgage loan. When you consolidate all of your debts into one loan, you will only have one monthly payment and one interest rate. You could end up saving thousands of dollars.
5. Always pay your mortgage on time so that you can maintain a clean credit report. Remember, a clean credit report is valued by lenders and will stay with you through life. It will also help you get a better refinance deal. If you have outstanding debts on your credit report, try to pay them off. Consider debt consolidation as a way to clean up your credit rating.
If you find your self in a situation where you are having problems paying your monthly mortgage, there are many steps you can take to avoid foreclosure. By doing so, you will be able to get some much needed financial relief.
Vic Singh is a agent and specializes in offering some of the lowest commissions with no conditions. When searching for or homes, be sure to check out his real estate advice at his personal blog and website.
Mortgage Rate Predictions For The Next Few Years
In recent years, the housing market has been on a very bumpy financial ride. Due to the sub-prime mortgage crisis which resulted in millions of homeowners losing their homes due to the inability to pay their monthly mortgage payments, President Obama's mortgage refinance stimulus plan was implemented to help people stay in their homes and encourage people to buy a home. The plan included lowering interest rates so that people could take advantage of the savings. Now that the economy has shown signs of improving, many people are wondering how long mortgage rates will stay low or if there is going to be an increase in the coming months and next few years.
In this current economic environment where improvement in the economy is not happening as fast as we would like, as well as the continued Government and Federal Reserve support, most experts agree that for the next few months, there should not be much of a change in mortgage rates. Currently 30 Year Fixed have been hovering just under 5%. It is expected that 2010 will see rates rises to just over 5%. This is mainly due to the economy not getting worse and there are some signs that the economy will get better. However, many economists predict that low mortgage rates will be here for a little while, but not for long.
Economists suggest that as the economy grows and banks begin to increase their lending, mortgage interest rates will steadily increase to rates preceding the housing market crisis. In the next few years, many predict the pre sub prime mortgage crisis rates will return. This may be a good time for prospective homeowners to consider buying a home as the rates will not be making any further dramatic reductions, and over time they will begin to rise. Locking into a low rate now will definitely save homeowners money in the future as the rates start to rise. As well, by the first half of 2010, the Federal Reserve's Housing Recovery Plan of buying as much as $500 billion of securities backed by Ginnie Mae, Freddie Mac, and Fannie Mae, will be coming to an end, so mortgage rates are expected to rise. Many experts believe rates will rise to over 5%.
Another consideration many housing market forecasters are worried about is inflation. Concerns about inflation could send Treasury yields higher which would cause an increase in mortgage rates. So, the mortgage rate prediction by many economic experts is that for the next few months, rates will stay about the same, and then they will begin to slowly rise in the next few years, depending on the state of the economy and the recovery progress of the housing market. But do not expect a continued decrease and the rates will eventually go up.
If you are considering refinancing or planning to purchase a home in 2010, this may be a great time to lock into a low interest rate mortgage. If not, you may miss out on a great deal if you wait too long.
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