Many homeowners want to reduce their monthly mortgage payments but hesitate to refinance. Refinancing can come with closing costs, new loan terms, and time-consuming paperwork. The good news is that there are several ways to lower your payment without refinancing.
Recast Your Mortgage
One option is a mortgage recast. This allows you to make a large lump-sum payment toward your principal balance, which lowers your monthly payments for the remainder of the loan. The benefit is that your interest rate and loan term remain the same, but your payment drops because you owe less overall. Not all lenders offer recasting, but if yours does, it is usually a simple and low-cost process compared to refinancing.
Eliminate Private Mortgage Insurance (PMI)
If your down payment was less than 20 percent when you bought your home, you may still be paying PMI. Once your loan balance drops below 80 percent of your home’s current value, you can request to remove PMI. Having your home reappraised can help prove that your equity has grown enough to qualify.
Appeal Your Property Taxes
Property taxes make up a big part of your monthly mortgage payment. If you believe your home has been overvalued by your local tax assessor, you can appeal the assessment. Even a small reduction can create meaningful monthly savings.
Adjust Your Homeowners Insurance
Homeowners insurance is another area where you might be able to save. Shop around to compare policies, increase your deductible, or bundle your home and auto insurance with one provider. Just be sure your coverage still meets your lender’s requirements and protects your home properly.
Set Up Automatic Payments or Biweekly Plans
Some lenders offer discounts for setting up automatic payments, which can lower your rate slightly or help you avoid late fees. You can also consider biweekly payments. Although this will not reduce your individual payment, it helps you pay down your principal faster, which lowers interest costs over time.
Lowering your mortgage payment does not always require a full refinance. Whether through recasting, removing PMI, adjusting insurance, or appealing taxes, small changes can make a big difference. Talk with your lender or mortgage professional to explore the options available to you. With the right strategy, you can keep your home affordable and your financial goals on track.
