You hear it from everyone: “My monthly mortgage payment is too high.” You should take a look t this list of the 5 factors that have the biggest impact on the size of your monthly payment. If you are currently shopping around for a mortgage, this list can help you make some financially responsible decisions. It can help you at any time in the mortgage process, whether you are shopping for your first, or you are a seasoned veteran.

We look at which of the following will affect the size of your monthly mortgage payment.

Size of the Term

Most mortgages have a repayment term between fifteen and thirty years. Choosing a mortgage with a shorter repayment time means you are clear of the debt sooner than expected, but it also means that your monthly payments are much higher. With a shorter repayment time period, you also will pay much less in interest as the principal balance will be paid down sooner.

You Did Not Refinance Your Mortgage

At any time, you have the option to refinance your mortgage, or take out another loan to pay of your existing one. When it is a ‘buyer’s’ market, you can do this to take advantage of lower interest rates, and sometimes lower monthly payments. Being able to correctly predict market trends can help you out in other parts of your life, as well. Not taking advantage of a dip in interest rates can definitely affect how much you are paying every month.

Put a Bigger Amount Down

If you do not yet have a mortgage, but want the lowest monthly payments right out of the gate, consider putting larger down payment in on a house. The average amount that people put down is 20% of the price, and you can do that. However, if it is not essential that you get it right now, you might consider saving a bit more and putting a larger amount down. It does make for a larger expense right up front, but with the lower monthly payments and possible sooner end time, you will be glad that you did this.

The Mortgage Insurance

If you put less than 20% for your house, you could be paying mortgage insurance, which could add thousands of dollars to your overall mortgage bill. These fees are added on to your monthly bill, which will make it higher. If you are looking to pay less per month, consider getting the insurance removed. However, it might be a good idea to leave it in place as protection if you are having some financial difficulties.

Go With an Interest Only Loan

This is mainly for people shopping around for their first mortgage, but as a short term solution to financial struggles, choosing an interest only mortgage can be a good first step. In this repayment structure, the first phase starts with you just paying the interest on your monthly payments. The principal balance is saved for the second phase, which generally will start five years after the initial loan was created. By choosing an interest only repayment method, you get lower payments for five years and your lender can ease you into paying off the principal balance by setting the monthly payments higher bit by bit.

Getting a lower monthly mortgage payment can happen before you even get the loan, by choosing options that will have a beneficial effect on the size of your monthly payments. Some of these details may be altered at any time in the mortgage process, but it is easier to get a better deal when you are starting out with a blank slate. The choice of mortgage that you make will have, by far, the biggest impact on your monthly payments.