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It’s no surprise that the monthly costs of owning a home can definitely add up. But, if you’re looking to lower your monthly mortgage payments, you’ll be happy to know there can be some relief.
While your mortgage payments are generally fixed and can be difficult to adjust, it’s not impossible. It’s always best to speak with your advisor to make sure you’re getting the best advice for your unique situation, these are a few ways monthly mortgage payments can be lowered to help manage overall expenses.
If by any chance you happen to come across some extra cash–whether those funds come from bonus payments, GST payments, gifts, inheritance, or additional sources of income–you can also consider making a lump sum payment toward your mortgage, in addition to your regular monthly payment.
Lump sum payments go straight to your principal, which means they can help in paying your mortgage off faster. With lump sum payments, you may be able to maintain a smaller mortgage payment and pay your mortgage off when you initially expected to, or at least closer to that timing. Just double check to see if you’ll have to pay any prepayment penalties.
The easiest way to lower your monthly mortgage payment is to increase your amortization period. Doing this can bring on immediate relief by offering a smaller mortgage payment. The result, however, is that you’ll need to pay your mortgage off for a longer period of time and pay more interest as a result.
How to increase your amortization period is highly dependent on your particular situation. In some instances, your mortgage provider can increase the amortization period without any other changes being made to your mortgage agreement–where you can avoid penalties, fees, and the need to refinance your mortgage.
In other cases, you may be required to refinance your mortgage either with your current provider or with a new one–if it’ll give you a lower interest rate. However, refinancing your mortgage essentially means you need to reapply for your mortgage and receive a new set of terms and agreements. And, if you do this before your mortgage term is up, you may also face penalties and additional fees for breaking the terms of your agreement before your term is up for renewal. In this case, it’s helpful to calculate whether the long term gain is better than the short term.
If you’re considering the latter option, connect with one of the mortgage advisors at Pine today, and we’ll be happy to help find the best solution for you.