Ways to Decrease Your Mortgage Payments in California

When you’re financially struggling, you look for ways to cut back. One of the biggest chunks of your income likely goes to your mortgage. Having a high mortgage payment can leave you with very little left to pay the rest of your regular expenses.

Fortunately there are ways to lower your monthly mortgage payment in California. Overall it’s a good idea to keep your mortgage at less than 30% of your take home salary or pay. With that being said, here are some suggestions we recommend to help reduce monthly mortgage payments in California.

Extend Your Repayment Term

This is also known as re-casting or re-amortizing your mortgage. You don’t specifically have to refinance since it simply lengthens the repayment term. So for instance if you change your 15 year mortgage to a 30 year mortgage, your monthly payment will be less and you’ll have more time to pay off your mortgage over time. You’ll also pay more interest this way, but if you have a cash flow issue and need an immediate solution, this is a cost-effective way to do it.

Make a Larger Down Payment

If you haven’t yet purchased your home and you’re trying to make your monthly mortgage cost more affordable, one way to do that is to make a larger down payment. If you have at least 20% to put down, you also won’t have to pay PMI or private mortgage insurance. If you can afford to make a larger down payment when closing on a home — do it, since this will reduce the amount you pay on your mortgage over time.

Get Rid of PMI

If you put down less than 20% as a down payment when you bought your home, you likely had to pay for private mortgage insurance on top of your normal mortgage payment. Depending on the cost of your home, this could add tens or even hundreds of thousands of dollars to the cost of your mortgage.

There is a solution, though. You can get rid of your PMI if you have at least 20% equity in your home. From there, you can request that your mortgage lender drop your PMI. The lender may send an appraiser to verify how much equity you have in your home, but if they agree that it can be removed, you’ll pay less every month on your mortgage payment.

If you’re still closing on your home, you can also pay your private mortgage insurance up front if you didn’t put the 20% down. Rather than having to pay extra on your mortgage every year, you’ll take care of the PMI by paying a one-time fee.

Refinance Your Mortgage

This is the most common way to lower your mortgage payment is to refinance. This can help you lock in a lower interest rate which can potentially lower your monthly payment. The better your credit, the more you’re likely to save. Right now, rates are very low which means great savings. Even if you think 1% doesn’t matter much in the grand scheme of things, you may be surprised to see just how much you can save!

Taking The Next Steps

If you’d like to know how much you could save by refinancing your current mortgage, or you’re looking for more ways to lower your mortgage payment in California, contact the professionals at LBC Mortgage. Our mortgage and refinancing professionals can help you find ways to reduce your monthly mortgage payments in California. We’ll work with you to help you find the lowest rates and explore your options in detail so that you can save money over time.

Let our experts work with you to help you discover ways to save money that you may not have considered. As the home loan experts based in Los Angeles, we work with a vast network of lenders that are ready to work with you to help you take advantage of current low rates. Contact us on our website or give us a call today to learn more and see how we can help you lower your mortgage payments in California.