If you want to get rid of your mortgage debt, you can do it by different ways. You can opt to pay off debt as quickly as possible. You can try to refinance your existing mortgage rate. Or, you can combine both processes and get your desired result. If you have credit card debt along with mortgage, you can also avail debt consolidation service.
You start your mortgage debt relief process by examining the duration of time you can afford to bear your loan term or the date you want to completely finish your mortgage payment. You may also prefer to take a short term loan and replace your existing long term one. It will give you the feasibility to pay off debt in faster time. If you are based in Minnesota, consulting a debt attorney Minnesota could assist you in finding the right option for you.
Paying off the principal amount is the best way to cut short your loan term. More than half of your payment is geared to pay off interest. Certain percentage of the remaining portion goes into Escrow for satisfying property tax. Now, the rest of the payment goes over to the principal. Thus we see that very small portion of your total monthly payment is going to cover the principal. Therefore, if you take a strategy to add some amount to your principal each month and continue to do so over the course of the term, you can reduce the time span by half of your total assigned time frame.
You may consider taking a shorter term loan. If you have a good credit paying history and regular cash flow, you may be eligible for short term option. So, you must better compare your present loan payment with 10-15 years loan term and see where you could derive most benefit.
Another wise way is to take a new mortgage loan. In order to do that you will have to gather all proper documents like income tax return, last two pay stubs, mortgage statement and bank statement. Now, you need to contact a loan officer and let him examine your credit report and then ask him to quote a rate. If you like his terms and rate, then sign up with his application form and then send the bank all your documents.
It would be wise to renovate your house before you seek for refinance option. It is because your new lender will likely to weigh and appraise your house. So, appoint a loan officer and have your home apprised.
Article courtesy of Sophie Kinsella.
She can be reached @ firstname.lastname@example.org
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