More consumers pay off mortgage ahead of schedule
12/14/2010
By Credit.com Staff
Many consumers are now using some of their extra income to more quickly reduce the amount they owe on their mortgages in an effort to get out of debt, according to a report from the Financial Times. While this trend is not likely to help the economy in the near future, Freddie Mac chief economist Frank Nothaft told the news source that it will certainly aid recovery down the road.
Americans may be attempting to reduce their home loans for another reason, however. The housing market no longer offers them the guarantee that their homes will increase in value, and many have instead found their property underwater, the report said.
Most consumers are saving money by making smaller payments every two weeks rather than once a month, the report said. That amounts to one extra monthly payment a year, which can save thousands in interest charges.
Many consumers have also saved money on their mortgage by getting a refinance, and in doing so saving hundreds or thousands a month on their payments.
