How to Reduce a Homeowner's Payment

If your monthly mortgage payments have become unmanageable because of a reduction in income, job loss or an increase in non-mortgage expenses, you may be at risk of falling behind on your payments. If you miss payments and cannot catch up your delinquent balance, your delinquency may pose the risk of foreclosure. However, you may use several strategies to lower your mortgage payments, which can provide you with the relief you need to avoid financial disaster.

Instructions

1

Shop for a mortgage refinance loan. In some cases, this can help by allowing you to obtain a lower interest rate and extend your mortgage balance over a longer period of time. If your mortgage payments are current and interest rates have fallen since you purchased your home, a lender may approve you for a refinance loan to lower your monthly payments.

2

Ask your lender to cancel your private mortgage insurance if you have more than 20 percent equity in your home. Although you pay for private mortgage insurance, it protects the lender against the risk of default -- it does not provide any form of financial protection for you. Canceling private mortgage insurance can lower your overall monthly mortgage payment by $100 or more depending on the amount of your loan.

3

Contact an insurance broker or agent to obtain quotes for homeowners insurance. Although mortgage lenders require you to carry homeowners coverage, your lender typically will not force you to carry insurance through a particular company. If your agent or broker can help you obtain the same coverage you currently carry at a lower rate, you can switch insurance companies to lower your monthly mortgage payment.

4

Contact your lender to inquire about a mortgage loan modification under the Making Home Affordable program. If you use the home as your primary residence, are experiencing a financial hardship and currently make mortgage payments that exceed 31 percent of your gross income, your lender can use this program to lower your mortgage payments. A loan modification will also typically bring your mortgage loan current if you are behind on your payments.