Mortgage is one of the scariest words in everyone’s dictionary. Everyone wants to get rid of debt as soon as possible and for as long as possible. There is nothing pleasing about being in debt, especially if you are in long-term debt. In that case you will spend most of your time in calculating the number of years it would take for you to become debt free. When you have a long term mortgage, paying it off early may seem almost impossible. However, paying it off early will not only make you debt free earlier, but will also reduce the interests accrued on your loan, thus reducing your overall debt.

Pay Extra

Instead of paying a fixed amount once a month, make it twice a month. Though it may complicate your financial situation further, it will definitely help you get debt free in half the expected time. Not only will the debt period reduce, the interest amount to be paid will also decrease. This is because the outstanding loan amount reduces twice as fast and hence lower interest to be paid.

Adhoc Payments

If paying extra on a monthly basis does not work for you, make adhoc payments. Pay more once in a few months or alternate months, etc. This will help reduce your mortgage faster than regular monthly payments. Also, when you have the adhoc payment in mind, you will save more to make the payment. Though such random payments may not reduce your overall interest rate steadily, it will definitely reduce your outstanding amount.

Lump Payments

There are many venues from which you can get extra cash. You may get some interest on your investments, inheritance, wedding or birthday gift checks, or you may even win the lottery. Whatever be the source of extra cash, pay that amount to your lender instead of spending. You may want to spend the extra money on yourself or buy something expensive. Instead, use the money to pay off a big portion of your mortgage. Parting with the unexpected income is easier than parting with your regular income. So use it wisely and get debt free quicker.

Consider Refinancing

When you are in a long term debt, you have enough time to build up a good credit score. Make timely payments on your small debts and ensure your credit score does not get negatively affected. When you credit score is good, apply for a refinance.

Refinance your existing mortgage with a shorter term mortgage instead of a long term mortgage with lower payments. The aim here is not to reduce your monthly payments but to reduce your mortgage period. If you are not in a position to make big payments every month, take a mortgage with a slight increase in your monthly payments and lower interest rate on the principal.

Downsize Your Assets

The major reason for your long term mortgage is to own or increase your assets. If the mortgage is too high and too long, it can financially and mentally drain you. Instead of retaining the house bought with the loan, sell it off. You can buy a smaller house that fits within your budget and reduces your monthly financial burden. Once you sell the asset, you can buy a more affordable house and pay lesser mortgage on a monthly basis. This will reduce your debt as well as the financial pressure.

The right mortgage for you isn’t necessarily the one that offers the lowest rate, but rather a complete package of terms, conditions, rates and fees that fit your specific short- and long-term financial goals. Avon Financial specialist will strive to understand your needs and explore options that are relevant to you.

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