If you find your mortgage payments too high for your current income, you’re likely searching, “My mortgage is too high. What can I do?” As a trusted mortgage broker in Houston, TX, Champions Mortgage can help you understand the factors that lead to a mortgage you can’t afford and the steps you can take for relief. We’re the mortgage lenders that work on your behalf.
Reasons for Mortgage Increases
In some cases, you may have a mortgage you can’t afford because you lost some income or acted a little impulsively by applying for a high loan amount. However, the problem more often arises when your mortgage rates increase for the following reasons.
Adjustable Rate Mortgages
If you have an adjustable-rate mortgage, your monthly payments could increase significantly if interest rates go up. If you took out your mortgage when rates were still low, you’re probably dealing with much higher payments than you had a few years ago. Thankfully, mortgage rates in 2024 shouldn’t reach much higher than 7% and may actually decrease as inflation rises.
Changes to Insurance or Taxes
You likely have an escrow account that pays for your property taxes or insurance premiums. If your home insurance or property taxes increase, so do your monthly payments. However, you should receive 60 to 90 days notice if this happens.
Additional Fees
Your loan provider could have added more fees, but they should have let you know before doing so. Reach out to them to determine if this is the case and ask them for a record that they sent you a notice. If you recently changed to using a credit card to pay the mortgage, you may have tacitly agreed to additional processing fees.
Service Mistakes
In rare circumstances, even the best mortgage lenders can make mistakes. If you can’t find any other reason for your payment increase, ask your loan agent for a corrected statement and take detailed notes about your conversations.
Tips for Handling an Expensive Mortgage
My mortgage is too high; what can I do?
Refinance
When you refinance, you replace your old mortgage with a new one, which allows you to change the loan term, lower your interest rate, or both. Several factors determine whether you could benefit from refinancing including:
- Current interest rates
- The age of your mortgage
- How long you intend to stay in your home
- Potential penalties for pre-payment
Champions Mortgage can help you determine if this is your best course of action.
Change Insurance
If you put less than 20% down on your home, your lender requires you to have mortgage insurance. If you’ve paid enough to earn at least 20% equity in your home, you can apply to cancel your insurance. You could also shop around for better mortgage insurance rates.
Adjust Your Loan
If your inability to pay your mortgage qualifies as financial distress, you can apply for government loan modification programs. This can have the same effect as refinancing, but you’re simply adjusting your current loan.
For example, you can change the term from 30 years to 40. This means you’ll end up paying more in the long term, but you’ll have more affordable monthly payments.
Consider Forbearance
In some cases, you can apply for forbearance, which puts your payments on hold. This is a temporary solution, but it may give you time to adjust.
Champions Mortgage Can Help Lower Your Mortgage
Are you wondering, “My mortgage is too high. What can I do?” Champions Mortgage can help you understand interest rate trends and determine the best way you can obtain monthly savings. With conventional loans and more, we maintain a 100% satisfaction rate!
To learn more, speak with a loan officer by calling (281) 727-2500.
