If your mortgage payment is putting more pressure on your monthly budget due to unexpected expenses or an increased interest rate in a flexible rate loan, you may need to make financial adjustments. Here are four tips to consider in making your mortgage more manageable.
Trim Your Budget
Take a close look at your monthly budget and annual expenses to see what can be trimmed. For example, if you have been taking two luxurious vacations per year, scale back to one until your mortgage is paid down to a certain level. Try reducing the number of times you eat out or visit the coffee shop per week. Set Your utilities to a modest but comfortable level. Even lowering the air conditioner by two or three degrees could make an appreciable difference in your monthly budget. Shop for grocery and clothing discounts. Compare insurance rates. Your savings will soon mount to ease the mortgage payment.
Pay Off Consumer Debt
Use extra funds from a second job or delayed purchases to pay down your credit card balances. As you pay them off in full, your budget will become less rigid, and your mortgage payment will be less of a strain. If you can’t afford to make extra credit card payments, try to include a few dollars more on principal payments to reduce the balance more quickly. If you bought some things that you’re not using, you may want to return them within the vendor’s designated timeframe. You can also sell things you’ve recently bought that aren’t being used and apply those funds toward the credit balance.
Avoid Unnecessary Purchases
Make a list of the major purchases you were planning to buy over the next year. Decide which ones can wait and postpone them. For the others, see if you can find good quality used appliances, clothing, or other items that will cost less than buying new. In a year or two, your income may increase due to job raises or promotions as well as paying off consumer debt or education loans.
Refinance Your Mortgage
In a favorable economic climate, you might be able to make loan modifications that will reduce your monthly mortgage payment. With a lower interest rate or a longer payment plan, your payments will be easier to manage. Make sure your credit score is in good condition and that you are paying bills on time when you apply for a loan refinance or modification.
You don’t have to struggle with a tight mortgage loan indefinitely. Follow steps like these to make your monthly payments easier to live with.