1. Ask your lender for a lower rate

Smiling millennial woman talking on the phone at home, happy young girl holds cellphone making answering call, attractive teenager having pleasant conversation chatting by mobile with friend
fizkes / Shutterstock

Many mortgage lenders will give you a lower rate if you just request one.

Don't expect your loan servicer to reach out and offer you a reduced rate. Rather, it's something you’ll have to ask for, like items from the "secret" Starbucks menu. As with the "shortbread cookie Frappucino," if you know how to make your request you might be pleasantly surprised with what you get.

Mortgage interest rates remain near all-time lows, and in this case the economic uncertainty of the pandemic works in your favor: Your lender likely won't want to lose your account and could be open to lowering your rate to make your loan payments more affordable.

If your mortgage is currently in good standing with your lender and is a loan on your main residence (not a vacation home), then you could find yourself with a lower mortgage rate just for the asking.

Simply add Capital One Shopping to your browser, and shop like normal. This free tool does the work for you.

Install Capital One Shopping

2. Refinance to a cheaper loan

Refinance Mortgage Application Form Concept
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Mortgage rates have fallen so far during the COVID era that you might seriously mow down your monthly house payment by refinancing to a new loan with a lower rate.

Rates are still down substantially from where they were in late 2019, when 30-year fixed-rate mortgages were averaging around 3.75%. They're so low that 16.7 million U.S. homeowners could save an average $303 per month by refinancing, the mortgage data and technology provider Black Knight recently reported.

You're considered a good refi candidate if: you could cut your rate by at least three-quarters of a percentage point (like, from 3.75% down to 3.0%); you own at least 20% of your home, through your equity; and you've got a strong credit score. If you're not sure about your credit score, you can easily check it for free.

But refinancing isn't free. Same as when you took out your existing loan, you'll have to pay closing costs — and they can run anywhere from 2% to 5% of your loan amount, with the national average about $5,000, according to mortgage company Freddie Mac.

Some of the fees are negotiable, and this is another of those occasions when it pays not to be shy. Ask your refi lender if you can get a break on closing costs — and you might be pleasantly surprised.

3. Request a loan modification

Head shot joyful excited african american family couple giving high five, celebrating their mortgage modification
fizkes / Shutterstock

And here's one more time when being proactive and speaking up can shave some money off your mortgage costs. (You don't get anything if you just sit there quietly.)

You can lower your monthly payment by asking for a mortgage modification, which would allow you to keep the loan you already have — but with updated terms.

If your lender or servicer is agreeable, a mortgage mod could adjust one of the key components of your mortgage so you'll be able to keep making your payments. You might come away with a lower interest rate, a smaller monthly payment amount, or even a reduction in the remaining balance of your loan.

To gain a fair perspective, consider using an extra payment mortgage calculator to draw a rough estimation if deciding to pay a little extra each month.

As with refinancing, a mortgage modification comes with expenses, including filing or administrative fees. If you’re choosing between this option and refinancing, make sure you weigh the costs to determine which path makes the most financial sense for you.

Here's how to save up to $700/year off your car insurance in minutes

When was the last time you compared car insurance rates? Chances are you’re seriously overpaying with your current policy.

It’s true. You could be paying way less for the same coverage. All you need to do is look for it.

And if you look through an online marketplace called SmartFinancial you could be getting rates as low as $22 a month — and saving yourself more than $700 a year.

It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side.

So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.

About the Author

Justin Anderson

Justin Anderson

Former Reporter

Justin Anderson was formerly a reporter at MoneyWise. He has a degree in Journalism from Ryerson University and his career has seen him cover everything from business and finance to the entertainment industry to politics, with plenty in between.

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