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Reduce monthly payments
Extend the repayment period For example, if you have 25 years remaining on your current mortgage, you may be able to reduce your monthly loan payments - even if interest rates have not gone down since you got your loan - by replacing your existing loan with a 30 year mortgage. The remaining balance of your loan will then be repaid over 30 years rather than 25 years. The question is whether the lower monthly payments are worth delaying the benefit of completely paying off your mortgage. |
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| Switch from a fixed rate to an ARM | ||||||||||||
| If you have a fixed rate mortgage, you may be able to reduce your monthly mortgage payments by converting to an adjustable rate mortgage (ARM). |
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| The main benefit of an ARM is lower loan payments - as long as interest rates stay the same or go down. But, if interest rates go up, your monthly payments will increase after the initial period. They may even go higher than the payments on your original fixed rate mortgage.
You trade short-term savings for more long-term risk. |
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ven if interest rates don't go down, there are two ways to reduce your monthly payments:
