Need Help Paying Your Mortgage? Consider Refinancing for a Longer Term

If you are having trouble making your mortgage payments each month, refinancing your home may be the best option to help you stay in your home.

Have you been having problems paying your mortgage bill each month? If so, have you considered refinancing? Refinancing might seem like a weird decision when you can’t afford your payments, but if you can refinance your mortgage loan into a longer term, the monthly payments would be less than what you are paying right now.

Extending the term of your loan has one major benefit: It can free up some cash each month that you can use to pay other bills. If you don’t have any other bills, at least your monthly house payment is lower and you can apply some of that extra money you have left over to your mortgage. If you are trying to save for retirement or some other important life event, you can use the leftover money for that as well.

While this benefit may be something that will help you right now, it is also important to consider the drawbacks to extending the life of your mortgage term. The biggest drawback is that you will be paying on the loan longer than you normally would. While your monthly payments would be reduced, the interest you pay over the term of the loan would increase. This means that over the extended period of your loan, you could be paying thousands more than originally planned. Of course, you can always opt for an extended mortgage loan in a refinance and then pay it off earlier if your financial situation improves.

Another drawback is that you will lose equity in your home if you plan on selling it in a few years. With the closing costs and other fees involved in a refinance, you will not be able to recoup those costs unless you stay in your home for at least five more years and rebuild the equity.

According to many people in the mortgage industry, an extended mortgage is the answer to many money troubles. Whether you have just been laid off from your job, need some money to make some major repairs on your car or if you have incurred a sizeable medical bill, refinancing into a longer term can help you dig out of the hole you are in and get back on track. It is better to opt for a longer mortgage and pay a little more in the long run than to lose your home because you can no longer make the payments on it. And doing it sooner rather than later will help you get better mortgage rates before those missed payments ding up your credit score.

For many homeowners who find themselves having trouble paying their mortgage payment, the thought of selling their home or paying extra over the course of an extended mortgage term is the least of their worries. Their current situation is what needs to be taken care of immediately and a refinance into a longer term mortgage is the answer that can help them out. Are you in a situation where you are barely able to make your mortgage payments? Refinancing into a longer mortgage term may just be the answer for you.

View current refinance mortgage rates.

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