How can I lower my mortgage payment?

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I feel like my mortgage payment is too high, and it’s keeping us from doing other things such as repairs to the house. I don’t doubt that we got in over our heads when we purchased the house, and some unexpected things (such as family illness which effected household income) occurred a few years ago.

We’re over 5 years into a 30-year fixed mortgage (right at 6% interest) for a $ 160,000 loan. Our payment is over $ 1,200. Most mortgage calculators have it much less than that. I realize that our insurance is added in and so on, but should it really be that high?

We filed bankruptcy over 2 years ago, but that was mainly due to some medical issues. We didn’t include our mortgage or some other bills. We’ve made our payments every month since we’ve lived there. We haven’t had it appraised in the last five years, but I would guess it would appraise at around $ 180,000.

Our mortgage was through CitiMortgage (which sold to Fannie Mae).

Is there anything we can do?

Thanks in advance.

  1. Reply
    Bostonian In MO
    January 31, 2011 at 4:44 am

    You might be able to re-fi to get the rate down but be advised that the closing costs on the re-fi may result in a situation where you won’t recoup the closing costs for a number of years. Some lenders may let you roll the closing costs into the re-fi but that could negate any benefit from the re-fi.

  2. Reply
    January 31, 2011 at 4:46 am

    Your real estate tax is also part of your mortgage payment, but isn’t included in the calculator’s amount. If your taxes are $ 3600 a year, that would add $ 300 a month to the payment. And unless you put 20%+ down, you’re probably paying PMI also. Your lender should be able to give you a breakdown of your payment, or you can very possibly look at your account online.

    The PMI is the only thing you might be able to get rid of, if you now have enough equity in the house – doesn’t hurt to ask the lender.

    Refinancing would probably cost you more than it might save.

  3. Reply
    January 31, 2011 at 5:23 am

    You may be able to refinance at a lower interest rate, or for a forty year mortgage (with this option your payments will be less, but over the life of the loan you will pay a ton to interest). Did you put 20% down on the house? Make sure you realize the cost of refinancing, you may not recoup your money for many, many years. Plus, I’m not sure if they would consider you since you’ve filed bankruptcy recently. If not, you are probably still paying PMI. You will have to get the house appraised to see if you have enough equity built up in the house. PMI is the only thing that could get removed from your mortgage.

  4. Reply
    Doctor Deth
    January 31, 2011 at 5:52 am

    you are not going to get much lower of a rate than 6% and you will have to pay several $ 1000 in refi fees, so it will take tears until you even break even on those fees

    You are dreaiming if you think you house is worth 20,000 more than it was 5 yrs ago – the average house nationwide has DECREASED 20-30% just since 2006.

    You probably owe more than the house is worth and no bank will let you refinance more that 80% of it’s value, so you probably won’t be able to refi even if you have the money for teh fees

    your 1200 a month payment is probably not even paying 200 a month towards the principle – my mortgage isn’t much less than yours, and mine principle amount each month is well below $ 200 – your mortgage balance probably isn’t even down to $ 150,000 yet and the house is probably worth less than that – maybe as low as $ 130-140,000. I’ve only owned mine 3-1/2 yrs and I figure I’m at least 20,000 into negative equity ( I bought it with zero down), but I have no plans on moving for over 10 yrs, so it doesn’t matter to me right now

    your property taxes are also probably included in your payment and maybe PMI insurance if you put less than 20% down payment- my pmt is just over $ 1200 including homeowners insur and prop taxes – I have no PMI – I was lucky and my rate is 7%, so your payment sounds about right – my mtg was about $ 152k, it;s down to about $ 146k – I pay a little extra each month

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