Ask The Money Coach

Q:How Can My Husband and I Lower Our House Payments? In the Past Four Years, We’ve Refinanced and Then Two Years Ago We Were Close to Foreclosure and Got a Loan Modification and Lower Rate. Even With the Modification, Our Payments are High.

A: I think you have to seriously consider whether you can afford your current home. Based on your email you’ve done three things to lower your monthly housing costs: refinanced, got a loan modification, and you also mentioned getting a new county assessment on your property. Since you stated that the new assessment found that your house was thousands less than last year, I assume that your property taxes were also reduced. All of these sounds like reasonable strategies to have a more affordable house payment. But it concerns me that even after having done these three things, you still find the house expenses to be “high.”

You certainly can try to refinance your home again. Since it sounds like your last refi happened four years ago, rates are much lower now. If you have great credit and at least 20% equity in your home, you can get a 30-year mortgage at around 5%. If you live in an expensive area, and have a jumbo mortgage (i.e. a loan above $417,000), your rate will probably be around 6%. Before you look at a refinance though, do take a good, hard, honest look at your overall financial picture. If you come to the conclusion that the house is simply too expensive given your combined incomes and your other bills, consider selling and finding less expensive housing. There’s no shame in that.

Recommended Reading

• Foreclosure Rescue Scams: How to Recognize Bogus Mortgage Help (housingwatch.com)
• Why You Should Give Reverse Mortgages Another Look (askamoneyexpert.com)