Your mortgage payment is likely your largest monthly expense, but that doesn’t mean it should be burdensome or overwhelming.

By examining the terms of your loan and working with your mortgage banker, there is potential to lower your monthly mortgage in a variety of ways.

Refinance your mortgage

Refinancing could be a good solution for you depending on the age of your loan and the difference between your current and potential new interest rate. Home loans amortize, which means you pay mostly interest towards the beginning of the loan term and mostly principal towards the end of the term. As a result, the interest rate is most important towards the start of a term. The interest rate makes less of an impact towards the end of the term when your payments are predominantly principal, so the newer the mortgage, the stronger the argument that you should consider refinancing.

“Because refinancing turns the amortization clock back to square one, it’s an option you’ll want to take only if there’s enough of a difference between your old and new interest rates,” said Tom Boyer, Starion Bank mortgage banker manager. “We can run the numbers for you to see if refinancing is right for your situation.”

Get a longer loan

If the monthly payments of your 15- or 20-year mortgage are feeling heavy, consider extending your mortgage into a conventional 30-year term to cut your monthly payment.

“Your interest rate will rise but you can still choose to make additional payment on the mortgage as if you were paying a 15- or 20-year loan,” said Boyer. “These extra payments will help you pay off the loan more quickly without obligating you to make big payments if there's an emergency or unexpected expense.

Drop Your PMI

If you bought your home with a down payment that's less than 20%, you might be paying private mortgage insurance (PMI). After you’ve gained 20% equity in the house, contact your banker to drop your PMI. This will reduce your monthly payment, freeing up some of your funds.

Lowering your mortgage payment can be achieved several ways. Talk with aStarion mortgage banker to determine which solution best matches your situation.