Reduce the Mortgage on Your Elmhurst Home
Of all the regular expenses for your Elmhurst, IL home, your mortgage is probably the biggest. But did you know there are ways to reduce your mortgage payment other than refinancing? From the MSN Money website, here are some alternative options for paying less each month.
Make One Extra Payment Yearly – This is one of the easiest ways to save, as the extra payment is applied totally to principal, not interest. You’ll lower your balance and reduce your total interest payments.
Bi-Weekly Payments – Every other week, put half of the mortgage payment on your Elmhurst property in an account and each month pay your mortgage from that account. At the end of the year, you’ll have made 26 half payments which equals 13 full payments. That’s one extra payment to put on your principal. You can actually hire a company to help you manage this, but watch out for fees.
Lose the PMI – This is Private Mortgage Insurance, and it’s required if the down payment was 20% or less on your Elmhurst real estate. But once your mortgage balance falls below 80% of the appraised value of your home, you can petition your lender to drop this fee. There will likely be a charge to reappraise your home, but that’s nothing compared to what you’ll save each month.
Check Your Home’s Assessed Value – If the value of your Elmhurst home has dropped but this was not reflected in your tax assessment, you can petition to change your current assessment. The lower taxes could possibly save you hundreds of dollars annually.
Recast Your Mortgage – If you come into big money and can apply a large payment totally to your mortgage principal, some lenders will then recast, or reset, your monthly payment. This recalculates your monthly principal and interest so your payment will be smaller over the remaining life of the loan.
Loan Modification – If you’re going through a financial hardship, you might be able to modify your loan so it’s more affordable. Various programs now help borrowers to stay in their homes with reduced monthly payments. Not everyone qualifies, so check with your lender or go to the Making Home Affordable site.
Refinance – Although his is the most common way to save, it’s also usually the most expensive due to the refinancing fees. Be sure you’ll save enough on your monthly payments to cover the fees.
The options for lowering mortgage payments are as individual as the people who use them. Crunch the numbers and decide which alternative will save you the most money.
These tips are also great to think about when buying as well as refinancing, and we have the experience to help you make the right choice. If you’re looking to buy or sell Elmhurst real estate, contact the Gracik Makinney Group, or call (630) 567-5902.