Ways Chicago Homeowners Can Cut Their Mortgage Payment Without A Refinance
Traditionally most homeowners have lowered their house payments by refinancing, which can result in a new, lower interest rate and therefore a lower payment. Problem is, the refinancing process takes time and costs money - if you even qualify in the first place, that is. Thanks to ever-tightening credit requirements, many homeowners don't meet the criteria for a refinance. Fortunately, there are other ways to save money on your mortgage.
Even if you aren't able to change your interest rate, you can still lower your payment by paying off your principal. Some folks choose to do this by sending in more money than they owe each month. While this approach shaves time off your mortgage obligation, however, it won't actually lower your payments. That's where an increasingly popular method called recasting comes in.
With recasting you pay a lump sum and ask your lender to recalculate your mortgage payments based on the reduced principal. Unlike with refinancing, you don't have to have to qualify - you just have to have some cash upfront, such as a holiday bonus or that Christmas money from Grandma. That's the good news.
The bad news? On average, lenders require a $5,000 minimum - and to really make a difference, you'll probably need to cough up at least as much as a down payment, say $20-30K. Most of us don't have that kind of money lying around right now.
Looking for a more affordable option? Instead of lowering your mortgage, you can make paying it easier by lowering other obligations. Maybe you're stuck paying off a tax debt, medical bills or a car loan. Or maybe you simply got too crazy with the credit cards over the years. By lowering the debts that are sucking money out of your wallet every month, you free up more cash to make your house payment. Not to mention you'll improve your credit score and lower your stress levels. Think your debts are too big to manage? Bankruptcy may be able to help. When you try our complimentary one-on-one debt analysis, a Chicago bankruptcy attorney can determine whether a bankruptcy plan can free up your finances - and your life.