Several techniques have been developed by planners and bankers to get rid off your debt quickly. Nobody likes to keep an unpaid balance on their credit cards at the end of the month. Therefore, I will present another way of paying your debts faster. By using the equity lying in your property, you might have an interesting solution.
The very first reason why you should use your property to pay off your other debts is the interest rate. In fact, you can borrow for as low as 5-6% in a form of a mortgage instead of paying 10,15 and even 25% on your credit cards and other loan. A mortgage is a large and secured debt. In addition to that, it is a highly competitive industry. Therefore, banks and other financial institutions will offer the greatest interest rate and borrowing conditions to keep your business within their branch.
Over time, your mortgage is decreasing along with your monthly payment and your property is increasing in value. We just had a great boom and it might be the perfect timing to refinance your mortgage. You can then benefit from the equity in your house. Mortgages are complex products and can offer many features such as the creation of sub-accounts.
With this new feature, you will be able to leave your original mortgage on the previous term and amortization in your first sub-account and create a new one to pay off your other debts. This sub-account can be set over 5 years or less in order to pay off your debts as fast as possible. By
consolidating all your debts into one payment, you will free up cash flow and pay less interest. These are two reasons why you will pay off your debts much faster than keeping them on your credit cards and lines of credit.
Refinancing your mortgage to pay off your debt is an effective and productive way of saving money and getting you back on a solid financial plan. As mentioned in life after consolidation, you must establish a budget and a financial plan after consolidating your debt. The last thing you want is to be forced to refinance your property again in 3 years for the same reason. Also, banks might not want to renegotiate your mortgage for a second and third time if they realize your spending habits.
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