(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.
(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.
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