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Why are homeowners trimming their mortgages?

It has been revealed that homeowners in the UK paid off nearly £5 billion in mortgage debt in the third quarter of 2009. When you consider that mortgage rates are the lowest they have been for some time it does make you wonder why so many appear willing to increase their payments in the short term to reduce their mortgages?

In a perfect world you would look to transfer your expensive debt to your cheaper debt i.e., credit card debt to mortgage debt by literally paying off your credit card debt first. However, when you consider the vast majority of people in the UK have a credit card and will be in debt at the moment, especially after the festive period, is paying off your mortgage debt really as ill-advised as it may look on the surface?

The truth is that many people in the UK are still concerned about losing their homes and losing their jobs in 2010. There is a belief that by paying off more their mortgage in the short term, scrimping and saving every penny they can, this will give them some breathing space if economic times become harder in 2010. However, many people are now beginning to realise that mortgage companies will still expect the same minimum payment even if they have paid off more than they were obliged to over the past few months. Professional advice should be taken if you're looking to significantly increase your mortgage payments, leaving more expensive debt to build up.

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