Question by pinkii: How do I lower mortgage interest without refinancing?
Paying $ 800 a month for my mortgage and $ 650 goes srtaight to interest. How do I reduce that?
Best answer:
Answer by Taylor099
I do not believe rates can simply be lowered on an existing loan. The loan and their rate are inseparable. When you apply for a new rate, the lender is essentially closing the old account and starting a new one.
What do you think? Answer below!
Without refinancing your only recourse is to pay more per month, aka make “principal payments”.
Sounds like you are about to consider starting to pay down your mortgage.
What you have rigth now is that “glimmer of thought” that starts the ball rolling.
You’ll look into re-financing and you will realize that closing costs will eat you up alive.
Before paying down a mortgage (to save on interest).
Make sure you have at least 6 months worth of living expenses put away in a cd or a savings account. No one should live without this emergency fund.
Then pay off any high interest, non-deductible debt.
Such as car payments, credit card debt, personal loans.
Make sure you always put at least the company match into your 401K.
Google: Mortgage extr payments calculator.
That way you can see how much you will save over the years.
You could easily pay down a home in 1/2 the time with some serious determination.
First, you need to understand the type of loan you have to understand whether the rate is fixed, fluctuating with the market conditions, or converts rates at some point in the mortgage (balloon mortgage), this can at least help you understand whether this is something that’s going to change in the future with your current loan.
Aside from that, the only way to change the terms is to refinance under a new mortgage agreement.
You cannot. You can only change your interest rate by refinancing. Or, make more principle payments which reduces the amount of interest you pay overtime but, doe snot affect the rate itself.
You agreed to pay the bank the interest rate spelled out in the loan. You must abide by that agreement or refinance to cancel that agreement.
you can’t reduce the interest portion without refinancing and early in any loan, most of your payment will be interest,
if you have extra money, just pay additional principle each month if the lender allows that – you will build equity faster and reduce future interest faster
Without refinancing the only way to lower the interest is to make extra payments. The extra payment will be applied more to the principle, and with a lower principle the amount of interest being calculated will be less.