Some other ways to reduce your mortgage payment

This is an updated reposting of earlier post on my other blog…

You can certainly explore the HARP/HAMP and similar Government/Lender sponsored refinacing options, but just don’t fall victim to paying a 2nd party to tell you to just split up our payments or pay an extra monthly payment once in a while.  Make sure you discuss payments with lender/servicer before you start making them and don’t assume they’ll apply the “extra payments”sooner than later.  Know if it will be applied against your current loan balance now or at the end of your loan.

First, there is always the option of making extra payments toward principal yourself.  But don’t fall for some businesses that promise results by paying them…Just make the same payment to your loan servicer and ask them to apply the extra amount immediately.

You can ask your lender if they can “recast” your loan.  In this fashion, for a small fee with your current lender/servicer, you can ask for a lower monthly payment without extra closing or appraisal costs.

Also, apparently recent changes in banking regulations have severely restricted lenders who use prepayment penalties…but ask anyway.

Source:  WSJ 10-2/3-2010, B8

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

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