Mortgage debt can be one of the biggest financial burdens. Right now, people owe over 7 trillion dollars in mortgage debt. While the debt problem is steadily waning as we slowly climb out of the last economic crash, there are still millions of people flailing to get out of the deep end. For many, there is no end in sight as to when they will be pulled out. The government is trying to come up with relief efforts to alleviate people’s debt as a result of the housing bubble, but most financial analysts are saying it is up to individuals to do their best to minimize their own debt.
Here are 5 tips for minimizing mortgage debt:
Remortgage. When you apply for a loan with a lender and get approved for a mortgage, you are usually set up with an introductory rate, which usually has much lower interest rates. However, most people don’t realize that around the one-year mark your lender automatically reverts your mortgage to the standard rate, which means higher interest rates and thus a bigger mortgage debt. If this happens or you expect it to happen, see if you can negotiate with your lender on a more agreeable rate – they might even lower it.
Find another lender, pay back more capital, and build more equity in your property. According to a recent article in a lending expert blog, more and more people are finding it easier to shop around for another lender that has more agreeable rates. One of the reasons why people’s mortgage debts are so high is because the interest rates are making it harder and harder to pay back their loans. However, if you find another lender with lower rates, you can effectively be paying more of your loan off and swimming further and further out of debt.
