How to Reduce Mortgage Debt
Ways to Pay Off Secured Debt, Home Mortgages and Loans Early
Oct 14, 2009
The global economic crisis has made millions of families realise why it is so important to reduce mortgage debt. Until the last mortgage payment has been made, the family home can still be repossessed. Those with mortgage arrears stand to gain the most from these strategies.
Reduce Mortgage Debt
Clearing extra secured debt not only reduces the cumulative amount of interest paid, it provides a cushion against negative equity. Paying an extra sum of money each month can reduce the life of a mortgage by years. It is necessary to check the T&C's of the loan to see if a redemption penalty applies.
Easiest Ways to Save Money
Identify money saving techniques to reduce household bills as this will leave additional disposable income to reduce mortgage debt. Consider the following:
- Use an online comparison service to reduce the cost of different insurance products (car, life, home and critical illness coverage) and utility bills (gas and electricity).
- Switch from branded to generic supermarket foods. Look for bargains- 2 for the price of 1 deals and discounted perishable goods. Stock up on canned goods when they are on sale.
- Cycle or walk to work instead of taking the car. Consider forming a car pool with work colleagues- this can cut the cost of gasoline/petrol by as much as 75%.
Ways to Make Extra Cash
Although saving money is normally easier than making money, the ideas below can help someone to make extra cash to reduce mortgage debt:
- Consider renting out an unused driveway through parklet.co.uk or yourparkingspace.co.uk. This is an excellent way to make money, especially if located near a major city, public transportation, school or hospital. This can generate $100 to $300 pcm.
- Sell unwanted items on eBay or at a garage sale to raise some extra money. This can provide a quick cash injection for the purpose of paying-off secured debt.
- Create a dog walking business. Many dog walkers who are capable of walking several pets can earn as much as $10 per hour during the evening or at weekends. A great way to make an additional sum of money for reducing mortgage arrears.
- Become a freelance writer. Other than setting up a website, it is possible to make money by writing for Associated Content, Suite101, About.com or The Examiner. Those who are prepared to invest the time can earn a substantial second income.
Tackle Unsecured Debt
If a borrower's debt-to-income ratio is starting to spiral out of control, consider clearing unsecured loans and credit cards with a Debt Management Plan or debt settlement program. This will increase the amount of money available to reduce mortgage debt.
Although paying-off the entire mortgage in a short space of time is unlikely, it is possible to reduce mortgage debt at an accelerated rate. If mortgage arrears are a problem, it is important to get professional debt counseling. They will work with the debtor to identify potential savings and will discuss what debt solutions are available for a homeowner.
 |
 |
 |
 |
 |
