Getting 1st mortgage, tips on how to bring the monthly payment down?

Obviously putting as much down as possible lowers the monthly payment. I just heard that if you have them add a point and a half or so then monthly payments are cheaper then too. I ask because we are secure with money now, but we don't know what the future will bring when considering our careers and don't want to end up house poor, which is why paying that extra for the points is worth it to us. Any other things we can do? Thank you!Getting 1st mortgage, tips on how to bring the monthly payment down?
You will get more ';bang for the buck'; in general by getting the rate down.





1) You save around $6 per $1000 in down payment.


2) It does not always cost a point to drop rate by 1/8, it varies so be sure to get various buy down options from your lender.


3) Extra down payment may make more sense if it is going to eliminate private mortgage insurance (20% down on a conforming loan)


4) If you ';buy down'; the rate then you need to do a ';break even'; analysis to see if it is worth it. For instance; if you spend $2500 to save $50/month then you need to live in the house for 50 months to ';break even';, otherwise you spent more to achieve the savings than you actually saved.


5) Explore products. For instance, a USDA loan has no mortgage insurance even at 100% LTV so that might save you too if you are eligible for itGetting 1st mortgage, tips on how to bring the monthly payment down?
To lower your mortgage you can do the following:





1. Borrow less or put more down. However, for every $10,000 you put down (or borrow less), you only save 58.00 a month (based on 30 year fixed rates). Not really a great deal.





2. get a lower interest rate. This can be done 2 ways: 1. the rates themselves are lower, or you pay discount points to pay the rate down. However, to lower the rate 1/8%, you will pay 1% of the sales price. For example: to go from 5 1/2% to 5 3/8% on a 100,000 mortgage, you would pay $1,000 up front. However, you would ONLY save 10.42 a month. Again, not a great deal.
Points on average don't pay off in savings. Most people don't keep a mortgage long enough for it to pay off. You might refinance to bring down the interest or to take money out or to extend the term of the mortgage or you might move.





A fixed rate 30 year mortgage is standard and right for many people. Your payment is fixed until it is paid off even if you make extra payments. A ARM mortgage adjust sometimes the rate goes up. It is bad for people who are bad with self control because they never expect the rate to increase. They are a way to lower your payment if you really use it right paying extra on the principal. Say you get a ARM that is fixed for 3 years then adjust each year. If in the first three years you pay down the balance with overtime, bonuses and just extra money in the budget your payment will go down even if the rate goes up. If you get a bonus and overtime and have the will to pay it down it can be a good deal. Some have a fixed rate for 7 or 10 years to start so you might have it paid off before it adjust. They aren't for most people so really understand the rate, margin and limits and decide for yourself.