What To Do When Your Mortgage Is Too High

You might discover that your mortgage payment is too high to be comfortable for a few reasons. Perhaps you have lost a job or income source that you were using to cover mortgage payments. Maybe you've had an illness or accident that requires long-term, expensive medical care. In any case where you can't afford your mortgage payments, don't worry; there are at least four tried and true ways to reduce the burden of mortgage payments.

Extend the Term of Your Loan

Sometimes, reducing your mortgage payments is as simple as extending the term of your loan. If you were initially ambitious about choosing a 15- or 20-year loan, an extension to a 30-year loan will be possible to do with your existing mortgage carrier. Just be aware that the other terms of your loan will change too, sand you'll probably end up paying more interest in the long run by extending the time frame.

Consider Refinancing the Loan

Refinancing may be a good idea, depending on your current payments and your credit. It's worth at least speaking with a mortgage lender to see what options exist for you. Get help in comparing all of the terms, including the new payments and interest rates, to see whether you could save money in the short and long run by refinancing your mortgage. Financial planning specialists are a great third-party source to consult about loan terms and budgeting for home payments.

Ditch Your PMI Coverage

Your PMI coverage is required as additional insurance coverage when you make a down payment that is less than 20% of the value of the home. But once you have paid enough of your mortgage to have a 20% or greater share of equity in your home, those rules no longer apply. The trick is that your mortgage company won't automatically take away your PMI payments. You need to request to start the process of reducing or dropping PMI coverage to get the ball rolling.

Take on a Renter

And finally, you can reduce the amount of your mortgage payments that comes out of your pocket by taking on a renter. They could rent out a single room or even a basement. Some people may be interested in renting a garage or storage space only. The bottom line is that you might be able to be more conservative about space and reduce your mortgage payments in this way.