Keep Your Mortgage Payment from Increasing
Converting from a Variable to Fixed Rate Mortgage
Financial Freedom 101 - Keep Your Mortgage Payment Low
It's no secret that, for most, daily expenses are steadily surging upwards and most of the world economies are struggling under an unchecked consumer inflation rate. With this comes the never-ending quest of how one can lower their monthly or yearly expenses, or at least keep them from rising. Truth be told, there isn't an entirely easy way out of this financial fiasco - especially if you take into consideration that there other external factors in play such as currency devaluation and inflation. However, there still exists a few choices for any financially conscious homeowner who wishes to ease off some undue pressure off their shoulders. At this juncture, you may be wondering...
"Why does my mortgage payment continue to skyrocket every other month despite taking advantage of the adjustable rate option and low-interest rates?"
Well, this mostly happens because, as the loan matures, the total compound interest tends also to accumulate steadily by the month. In fact, if not adjusted downwards, it reaches a point where the interest paid per a given month equals the principle payment made towards the repayment of the loan. At this point, it's advisable to consider another solution to keep your payments affordable.
Power Mortgage Offers Multiple Loan Options
At the most basic level, this is almost the same as getting your lender to re-do or re-evaluate the terms of your mortgage to allow you more financial leeway. However,while a simple process for most homeowners, you need to know whether to decide whether to convert the current loan to a fixed-rate mortgage or an adjustable rate loan.
For those with a long-term outlook (owning the property for several years or so), it's always financially wise to first consider refinancing the loan to a reasonable, fixed-rate mortgage. This way, you can enjoy consistently lower payments per month or year for a long period regardless of inflation or rate adjustments.
On the other hand, if your aim is to develop or improve the property and then flip for a profit, then taking advantage of the low interests of an ARM (adjustable rate mortgage) is widely considered a financially savvy decision.
Home Loan Modification
At times, refinancing may not be a feasible option; thus, modifying the loan terms may be the only option left for you to plug the financial leak caused by a rapidly rising monthly mortgage payment.
By modifying your loan terms you can lower your statutory payments considerably, cap off exorbitant interests rates and more importantly restructure the interests rates from adjustable ( floating ) to fixed. You can request the lender to cut back unnecessary deductions or loan service charges as long as your make regular contributions to the repayment of the loan.
That said, at the end of the day before refinancing or modifying a loan to prevent it from rising, it's always best to select a new loan option that best complements your goals for home ownership. At Power Mortgage, we can help you pick the right option. Contact us today to speak with one of our loan specialists and further assess all your options.