If you’re looking for a way to lower the monthly amount you have to pay toward a mortgage loan, the most common outlet you’ll be considering here is the mortgage refinance. This option, which involves taking on a new loan that replaces the old one, but with more favorable terms, can open up significant savings for those in need of it.
At VIP Mortgage Inc., we’re here to help with all your mortgage refinancing questions or needs. But because refinancing, like an initial mortgage, is a process that requires approval that not everyone receives, we’re often asked about alternatives for lowering monthly payments without using a traditional refinancing program. This two-part blog will cover some of the options at your disposal here.
It may sound ridiculous, and in all honesty it’s not a commonly effective solution, but there have absolutely been cases where borrowers have been able to find a lower rate simply by calling and asking their lender for one. Lenders have incentives to keep their clients just like any other business, and while we won’t put ourselves in a financially irresponsible position, there may be situations where both parties can benefit from this kind of reduction. This is a solution that’s most possible when the originating lender is the same one that services the loan, and if your rate is much higher than current market rates (but you don’t qualify for refinancing).
In other cases, you can actively negotiate with your lender using certain programs that are meant for people struggling with monthly payments. Some of the most popular programs here in recent years have been HAMP and HARP, government programs that allowed for lower rates to be obtained in some situations, though these are being phased out and replaced by Fannie Mae and Freddie Mac-sponsored programs.
In addition, there are also proprietary loan modification programs offered by individual lenders. If you don’t spend the time needed to find out about this, you’ll never know if it’s a possibility for you.
This is a rarer situation that becomes less and less common each year, but some of the fallout from the late-2000s housing crisis involved certain homeowners being given incredibly low mortgage rates as part of their restitution. But not all took advantage of this, and it’s possible you might be able to find legacy claims that will save you money or secure you a better rate without refinancing.
In some cases, you might qualify for what’s called a streamline refinance. It’s technically a form of refinance, but one that doesn’t require minimum credit scores or max LTV levels and comes with far lower thresholds. Ask your lender if this might be an option for you.
For more on options for lowering mortgage payments without refinancing, or to learn about any of our mortgage loan services, speak to the pros at VIP Mortgage Inc. today.
*The views and opinions expressed are my own and do not necessarily represent the official policy or position of Primary Residential Mortgage, Inc.