Top 6 Reasons For Not Paying Off Your Mortgage Quickly

reasons for not paying off your mortgage quickly. Homebuyer paying off mortgage loan amount.

(4) High Interest Debt

It is one of the most popular reasons for not paying off your mortgage debt too early. Generally, mortgages are provided at low interest rate as compared to other debt instruments.

It will be much better decision to first pay off debts associated with high interest rate such as credit card debt, personal loan, and other lines of credits instead of paying mortgage debts.

This debt reduction measure will also help you in boosting your credit score. Once you have completely paid off your unsecured loans with high interest rate then you can focus on prepaying of your mortgage.

[Read Also: 5 Steps To Clean Up Negative Items From Your Credit Report]

(5) Prepayment Penalty

It is one of the most important reasons for not paying off your mortgage quickly. Suppose, you are willing to pay out your mortgage debts before time, usually within 5 years of taking the loan.

In such a case, you may be asked for prepayment penalties, or early termination fee, or exit fee. It is usually charged in order to discourage you for early loan payments.

Although, an exit fees on all new loans were banned on 1 July 2011 but loans taken prior to this date may still incur such penalties.

You should carefully read your paperwork to learn whether your mortgage has a provision of prepayment penalties.

Image Source: Shutterstock

Recommended Posts

About Editing Staff
At GetUpWise, we are a team of professional writers from different areas of subjects. We are conducting thorough research on each & every topic from highly reputed sources before writing any piece of article. Once research is done, we try our best efforts to provide informative piece of articles in an easy to understand manner. It is something that is extremely essential to meet our goal while reaching & offcourse building a strong online community. We do update our articles from time to time in order to provide the most latest information quickly. Thus, our articles can be used as a "way to gain smartness".

Leave a comment

Your email address will not be published.


*


*

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get Instant Access To GetUpWise Posts

Subscribe Us

Please do verify your email address by clicking a link sent to your email.

Secured By miniOrange
More in Real Estate & Mortgage
factors to know before applying for mortgage.
10 Key Factors To Know Before Applying For Mortgage

(4) Down Payment Down Payment, also known as Money Down, on any real estate purchase is one of the key...

Close