Over the past decade, student loan debt has been soaring, both in terms of delinquent borrowers and the total amount of outstanding debt amount. In between 2005 and 2015, reports suggest that outstanding student loan debt rose from $365 billion to $1.3 trillion and this has had a great impact on people who also owe money to their mortgage lenders. Among all other debts, soon after student loan debt, the next debt which is perturbing the borrowers a lot is the mortgage debt. Apart from this, the sharp rise in student loan debt has also raised concerns about the fact whether or not the student loans will get mortgages with reasonable interest rates. So what does the mortgage owe generation do about their debt?
Paying off your mortgage loan way before the actual time is ‘in’. Refinancing in order to take money out of your home loan is an old-school process. As more and more people live through the crisis of foreclosure, an increasingly large number of people want the security and benefit of owning their home right away. Mortgage debt is something which remains on your shoulders till you pay it off in entirety. Therefore, don’t you think that knowing some ways in which you can pay off your mortgage earlier can help you out? Read on the concerns of the article to know more on the ways of repaying your mortgage before the actual time.
- Just keep paying more: In case you wish to see some kind of magic, you should start playing with mortgage calculators and keep checking how adding a little bit of payment to the monthly mortgage installments can reduce the total outstanding amount and also the length of the loan. If you pay a little more towards the principal amount, you can get a bonus. The lower the principal gets, the more will be the payment which will be applied to the principal amount. Hence, keep paying a little bit of payment whenever you can.
- Opt for a refinance with a short term mortgage: You can even refinance into a new mortgage with a shorter term for 10, 15 or 20 years but the 15 year mortgages are the most common among them. However, make sure that your payments will be higher on a 15 year term loan. The only advantage is that you will be committed to higher payments and hence there will be no wondering about whether or not you can pay extra every month.
- Opt for biweekly payments: When you make biweekly payments, you can take advantage of the 52 weeks that are there in a year and the 12 months. If you pay half of your actual mortgage payment every alternative week, you will have made 26 half payments which is equivalent to 13 full monthly payments by the end of the year. Why should you pay the extra fees when you can accomplish the same aim otherwise?
- Use money merge accounts: Mortgages can be set up like home equity lines of credit or HELOCs. These are known as merge accounts as they double as checking account. When you get paid, you give your check into the account and as you spend the money, you take it back again. This method can be used to pay off your mortgage early.
Apart from the above mentioned points, you can also take out prosper loans and use the proceeds of the loan to repay your mortgage loan. However, ensure that you have a good credit score for taking out such loans.