- 1). Refinance your mortgage when the prevailing interest rate is lower than the rate on your loan. For example, if you have a 30-year mortgage for $300,000 at six percent and refinance at one percent lower, your monthly payment will be about $185 less. As a word of caution, if you are planning to stay in you home for less than three years, you probably will pay more in loan fees, like points and lender charges, than you'll save. Make sure you know how much the charges will be before you make that decision.
- 2). Extend the length of your mortgage, the HousingadviceNI website suggests. Talk with your lender about this alternative. For example, if you are currently paying on a 15-year mortgage, one that is for 30-years or longer, will require a smaller monthly payment. To illustrate, if you are able to convert a $200,000 loan at six percent from 15 to 30 years, you will reduce your payment by about $500 each month. Of course, you will pay more interest over the life of the loan.
- 3). Make 13 monthly payments on your mortgage, instead of 12, advises Buzzle.com. This will reduce both the amount of interest that you will pay in the long run, as well as the time it will take to pay off your home. For instance, you will save about $72,000 in interest and shave almost five years off your mortgage if you have a 30-year loan at six percent.
- 4). Keep your lender informed if you have a problem making the monthly payments on your loan because you are suffering a financial hardship. For example, you may have been assessed penalties for payments that were late or unpaid that your lender may eliminate due to the circumstances. Another option is to ask your mortgage company if you may pay only the interest on your loan by waiving the principle part of the payment until your financial problems have passed. Your lender may be willing to make these concessions if it means that you will not default on your loan.
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