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Avoid the bubble by not being in it! 

By Guest Author | August 21, 2015

Standing behind a solid defense shield is the best way to avoid an unfortunate financial hit. Mortgages are turning into financial nightmares for many people, and the light at the end of the tunnel seems to keep getting further away. The best shot you have is to organize yourself, build the right plan and attitude, and have the discipline to attack the mortgage head-on.

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Image credit: Alexas_Fotos via pixabay.com

Head above water

The whole world felt the consequences of the housing market collapse, and no one can really tell if it will bounce back to the way it was. Some have taken advantage of the housing recovery, while others are struggling to stay afloat. Sadly, some fail to keep their homes. There are a lot of people with underwater mortgages - those of which overshadow the worth of the house itself.

Also, in the US, the student-loan has tripled in the last decade. This impedes the ability of many to meet the debt deadlines. Their credit scores are pushed down, and they can only dream of owning a home free and clear. Debts and mortgages can be devastating to the household finances. Everyone should try to deal with them as soon as possible, even if today all seems to be sustainable from your perspective.

Sacrifice and Redemption

The basic principle is simple- add some extra money to your payments to shorten the length of the loan and mitigate the impact of interest rates. As the principal gets lower, the least amount of your money goes to covering interest expenditures. Some people tend to double up the monthly payments four times a year, but you should find a model that best suits your overall financial picture and income. The main point is that a lot of people don't even try to find a solution. Any small saving will add up over time.

One solution you can always turn to is to renegotiate the terms, and ask for a modification. One of the ways to pull this off is to switch to biweekly payments. It may not seem like much, but one extra annual payment can chop a big chunk of your mortgage in the long run. If the math gives you headaches, an online mortgage payoff calculator tool can be of great help.

In the end, it goes without saying, that people should be wiser when it comes to spending. Saving money is the best way to put some extra financial effort towards eliminating your debt. Extra earnings can also save the day, so consider extra shifts or part-time jobs. You will have to make some lifestyle adjustments in any case, and this requires a great deal of discipline.The sacrifice is more than worth it, because your future prospects are at stake here. Remember that this is only a temporary change, and the more disciplined you are the faster you will do better.

King of the Hill

After a spectacular meltdown, markets might catch up again. This will only happen if several different factors come together. This is a shaky conviction, so, I wouldn’t build my future on it...  One rule of thumb that you should consider is to not pay too much attention to the various expert advice, and more so to their guaranteed predictions that bombard you from television and other types of media.

The sluggish pace of recovery makes other tactics more prudent, especially when you are facing an uphill battle. Don’t pour money down the drain, even if it comes from a lottery ticket. Getting rid of debt is an extremely exhausting process, but there are solutions that can give it a speed boost. Owning a home and being debt/stress-free is the goal worthy of all the blood, sweat, and tears.

 

About the author: After almost a decade spent working at various assistant positions, Daniel Lenson believes he has accumulated enough experience and knowledge to start his own small business partnering with close friends. His family had its fair share of paying off credit cards and of the anxiety that comes with it. When not researching about business matters, he likes to read contemporary fantasy novels. Follow Daniel on Facebook to keep up with his work.

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