Mortgage Payments

If you are like many other homeowners, your home mortgage payment is the single largest expense in your monthly budget. This is a fixed expense that you will typically be responsible for until your loan is paid in full or until you sell your home, and you may have a 15, 20 or even 30 year term on your mortgage.

If your home mortgage payment has become unaffordable or burdensome for you to manage with your current financial situation, rest assured that you may be able to save some additional cash each month without selling your home. Refinancing your existing mortgage can provide you with important financial benefits to help you better manage your budget.

How Refinancing Lowers Your Mortgage Payment

Refinancing your existing mortgage essentially will replace your existing loan with a new loan, but you may not understand how this will result in a lower mortgage payment. When you initially applied for your current mortgage, your payment was fixed based on the interest rates at the time as well as the original loan balance. Since that time, you likely have reduced your loan balance considerably, and interest rates may be improved as well. In fact, some homeowners are able to refinance to a lower rate as well as pull equity out of their home in the process.

How Home Equity Could Further Reduce Monthly Expenses

While your main goal for refinancing a home mortgage may be to reduce the large monthly mortgage payment that you are responsible for, the fact is that you may be able to use your home equity to further reduce your monthly expenses. For example, you can use extra funds provided to you through a refinance to pay off an outstanding student loan, a car payment or a credit card balance. Some homeowners may even be able to pay off most or all of their debts by tapping into their home equity.

It is common for homeowners who have a high and unmanageable mortgage payment to feel overwhelmed and even trapped by their financial situation. However, as you can see, lowering your mortgage payment and even reducing some of your other expenses may be easier to do than you might think. If you are interested in learning more about how refinancing your mortgage may help you to improve your financial situation, you can speak with an experienced mortgage professional today.

If you recently graduated from college and are about to become a homeowner, you’re in a somewhat unique position. You’re about to embark on a great journey, but at the same time, you’re also taking on an awful lot of debt. That said, it is possible to successfully manage a high debt load if you’re careful.

So how can you make sure you can pay your mortgage, your student loans, and your mortgage expenses – all without losing your mind? Here’s what you need to know.

Make Sure You Have An Emergency Fund

Managing a high debt load isn’t necessarily a challenge if you have a consistent income stream. But if interest rates rise on your floating mortgage, if your portfolio doesn’t do as well as expected, or if you lose your job, you may find yourself unable to pay your expenses without dipping into your savings. That’s why you’ll want to establish an emergency fund – a spare supply of cash you can live on for 6 months or longer, if necessary.

Extra Cash At The End Of The Month? Attack High-Interest Debt

Mortgage rates are still at a historical low right now, which makes now a great time to become a homeowner – but if you’re going to carry a mortgage and student loans, you’ll need to be smart about how you repay your debts. High interest rates can quickly add up and eventually crush you, which is why your debt with the highest interest rate should be your primary priority. This is most likely your student loan – so if you have some extra money left over at the end of every month, put it toward your student loan first.

Never Roll Student Loans Into A Mortgage

Some young people seem to think that getting a mortgage is the answer to student debt. By rolling your student loans into a mortgage, you can worry about just one monthly payment instead of two. The problem with this thinking, though, is that your student loan is probably the size of the principal on a mortgage – and you’ll have to stretch your loan term out farther in order to afford the monthly payments.

This means that you’ll pay more money in interest over the long term. Your mortgage loan is also a loan with more severe consequences for missing a payment. If you miss a mortgage payment, you can get evicted from your home – but if you miss a student loan payment, they’ll just take your tax return.

Paying off a student loan and a mortgage at the same time is a daunting task, but it is possible. Talk to a mortgage professional near you for more repayment strategies that work.