Lowering House Payments?

Home values at 275,000.Still owe 219,000 . 5.35% intrest rate. Due to funds from an insurance settlement, I would like to reduce my housepayment just to make every month more comfortable. I was considering paying 80,000 on the principal. BUT my morgage company tells me that the payments will be the same, I would only be shortening the term. While this is a good idea… It does not help me month to month..Looking for some suggestions. I thought about refinancing, but I still have a good rate. * Very good credit rating. Thanks.

If you want to reduce your monthly payment you will have to get a new loan. That means giving up that awesome rate. I would not advise giving up that rate.

You could refinance and buy the rate back down to that 5.35% but you need to assess the fees it will cost and it will add time back on unless you do a 15 yr as opposed to a 30.

For example if you’ve paid on the loan for 8 years you only have 22 left on that current loan……that would start back over at 30 yrs.

If monthly payment is your only goal than maybe selling and adding the proceeds with your 80K and buying a cheaper home may be an option. Depending on when you bought and where you are……..there are some great deals out there right now.

If you cant afford the payment but dont want to sell….(in a future high demand area)…..move out and rent it (if you can cashflow) and use your 80k to buy something cheaper.

Are you sure there are not other areas in your budget you could find the extra $ you need or a slight change in lifestyle that could help your monthly budget? A little planning and eating out less can save some of us $400 or $500 a month….

Just a few ideas with the limited info you provided

Good Luck

OBA™