Over the years, I’ve met many loyal customers who don’t want to refinance but really can’t afford their interest rates anymore. This can happen with a variety of causes, such as a fluctuating economy that can take more of your money than it did ten years prior, or a newfound liability like hospital bills or rising insurance with age, or maybe you’re just tired of paying the same rate you have for years and you want more of your hard-earned money today. I’ve heard it all, and thankfully, I’m here to tell you that refinancing is far from the only way to lower interest rate. In fact, there are five definite ways you can start lowering your interest rates today. The first solution is as old as time: barter with your lender.
- Barter a Lower Rate with Your Lender
Bartering may seem old-school or out of the way, but you’d be surprised at just how many people have called their lender, sat down, and received a lower-rate on the spot. A lot goes on behind the scenes of mortgaging, that’s true, but if your lender is truly a mortgaging professional like we are at Choice Mortgage Bank, Inc., they can get you a lower rate that works for you, the lender, and your future. This, of course, doesn’t work in every situation, you’ll never know how low of a rate you can get if you don’t ask. So, if you haven’t already, talk to your lender about lowering your interest rate without necessarily refinancing.
- See if you Qualify for a Loan Settlement
If you’re ever caught up in a financial mishap, whether that’s with a big bank or a small-town lender, you’re likely to know whether you’ve been granted a loan settlement, but have you ever checked to see if you qualify for a settlement itself? Many times, there are customers who have no idea they qualify for a legacy claim or settlement and don’t take advantage of the rewards they give – such as lowered interest rates, sometimes as low as 2%. Talk to your lender to see if you qualify.
- Consider Streamline Refinancing
Streamline refinancing is the quicker, simpler way to refinance home with the main intent of lowering your interest rate. If you don’t want to go through what can be the tedious process of refinancing, but you want the lower interest rate guaranteed to you, talk with your mortgage professional to see if your lender can get you started on your streamline refinancing. Here, at Choice Mortgage Bank, Inc., we deal with quite a few streamlined refinances and would happy to start yours as well.
- Consider a Loan Recast
Loan Recasting can lower your monthly payments, without taking out an additional loan or extending your loan term. Instead, it adjusts your amortization schedule of the loan, allowing you to pay less as you go through your loan payment schedule. This is a lesser known route, but it’s no less effective or costly. Talk to your lender today, to see if you can apply for a loan recast.
- Look into an ARM
Lastly, we have ARMS, which are “adjustable-rate mortgages”, which are heavily susceptible to the rise and fall of the economy. This was a common alternative to refinancing, prior to the 2008 housing crisis, and while it has notably fallen to the wayside since, it is not out of the race. While this option may seem riskier, considering rising rates, it does offer great rewards to those brave enough to try. If you’re interested in lowering your interest-rate with an ARM take to your mortgage professional.