One of the most effective ways to reduce monthly debt payments is a home loan extension. This involves contacting your home loan provider and changing the terms of your loan. A 20 year mortgage can be extended to a 30 year mortgage, thereby drastically reducing monthly instalments. Although the amount paid off on the house will total more in the end, and the interest will be higher, it will free up more money on a monthly basis that can be used to pay off smaller debts faster or enhance your living standards.
Another option is to take out a second mortgage or refinancing your home. By using an existing home loan, or property to obtain more credit, that money can then be used to consolidate other debts. This will depend on the value of your property and the payment history on the mortgage.
A home is one of the biggest investments a consumer will make, and hanging onto it is important. Debt counselling will make provision for a home loan, and make sure that the consumer doesn’t lose their house. It is also pertinent that a consumer makes their home work for them in a debt crisis, and this can be done through extensions and refinancing.
A home loan extension can only be beneficial to a consumer facing insurmountable debts. It is a vital step to take before considering debt review, as debt counselling is not a way to avoid paying debts, but a way to pay them with ease.
Article written by: Andrea van Tonder 02-2013