What you should know about secured loans and mortgages

Owning your own home is a major milestone and a massive step towards securing yourself financially for the future. That is to say, with each payment you make towards your mortgage you are building equity. However, the ever-increasing cost of living, as well as high housing costs have home owners concerned about paying down debt. Most people spend a large portion of their income on debt obligations and therefore every cent counts. This generally translates into housing affordability complications for a great number of people. So, how do you pay down a mortgage while consolidating your debt with a secured personal loan? Here is what you should know about secured loans and mortgages.

Secured personal loans

A secured loan can be viewed as a loan facility under which you attach an asset as collateral.

Mortgage holders tend to qualify for secured lower interest personal loans with greater ease than non-mortgage holders. This is great news for home owners who have the option of taking out a secured loan for debt consolation and other emergencies. In addition, a secured loan can greatly help you break the cycle of consumer debt. The most notable example of consumer debt are credit cards. One of the principle benefits of home ownership is that it accords you collateral to access secured loans. Moreover, owning a home enables lenders to offer you lower interest rates on your secured personal loan. Finally, a personal loan that is secured against a home is typically approved quickly and with relative ease.

Mortgage payment strategies

Increase your mortgage payments

By simply increasing your mortgage payments you can greatly reduce the length of your mortgage. In addition, increasing your mortgage payments can save a significantly large sum of money in the long-run. With this in mind, consider committing more financial resources towards paying your mortgage. This will potentially help you to reduce the outstanding balance on your mortgage. Contrary to what many home owners believe, you need not increase your mortgage payments by a large amount. That is to say, even increasing your mortgage payments by a small amount, this will have a huge impact in the long-term.

Lump-sum payments

To start with, consider making lump-sum payments towards your mortgage. By making lump-sum payments towards your mortgage, over and above your regular payments then you significantly reduce the outstanding balance on your mortgage. Some people make lump-sum payments towards the conclusion of their mortgage term. Other people make lump-sum payments towards their mortgage at the end of their mortgage term. However, you can make your lump-sum mortgage payments at certain times during your mortgage contract. Be certain that your mortgage arrangement allows you make payments over your regular payment amounts.


Simply put, refinancing refers to the process of replacing or exchanging your mortgage for a new one. In most instances, home owners choose to refinance their mortgage in order to pay off debt, finance home improvements, or finance other investments.

Benefits of refinancing your mortgage

Consolidate debt

Perhaps the greatest reason most home owners choose to refinance their mortgage is to consolidate debt. Similar to a secured loan, refinancing your home allows you to free up some extra money.

Lower interest rate

Secondly, you may consider refinancing your mortgage so as to take advantage of a mortgage facility with a lower interest rate. Needless to say, a mortgage with a lower interest rate will result in reduced monthly payments. Lower monthly payments towards your mortgage balance subsequently result in long-term savings.

Different mortgage type

Lastly, you may choose to refinance your home as you seek to use a different mortgage type. A change in your financial position may prompt you to change your mortgage type. This scenario will ultimately result in you refinancing your mortgage.

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