You Can't Refinance: Now What?

Many people across Arizona are caught between a rock and a hard place. Because property values have declined in the last few years, many people owe more on their mortgage than their home is now worth.

Sometimes, much, much more.

If you owe up to 125% of your home’s value, there may be a program that will allow you to refinance and take advantage of lower rates. What if you owe more than 125% of your home’s value? Even surety companies are becoming more reluctant to issue bonds.

It is time to get creative on how to save money each month on your mortgage payment.

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Back in April, we went over how your mortgage payment is made up of PITI – or Principal, Interest, Taxes and Insurance.  If you are in a situation where you can’t refinance, that means that reducing your Principal and Interest are “out” for now — but what about Taxes and Insurance?

The good news is that you can still save money on your taxes and insurance.

Taxes – Your taxes are set by the government for the community you live in. This number is easily found at the Maricopa County Assessors office and can also be disputed if you think the assessed value of your home is too high.

Insurance – Not only should you shop around for homeowners insurance quotes from companies that you know and trust, but you should also takes steps like combining your car insurance and homeowners insurance into one policy, install one of the best home alarm systems available and make sure you are maximizing every available discount.

Just by shopping around a little, you might be surprised at how much you can save on insurance alone.

Even though you are currently in a situation where you cannot refinance and save money on your principal and interest, don’t let it deter you from trying to save money on your overall mortgage payment each month — which is really your ultimate goal.

Especially in these tough times.

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