How to Eliminate Your Mortgage Legally
- 1). Liquidate all of your other savings, investment and retirement accounts. This is a drastic measure, but you may be able to seriously reduce, if not completely eliminate, your mortgage balance. Before liquidating any retirement accounts, though, make sure to review the penalties involved--both tax and early withdrawal fees may apply.
- 2). Start a biweekly payment schedule. This is a long-term mortgage elimination strategy. By making biweekly payments, you'll end up making 26 half payments each year, or 13 full payments--meaning one additional full payment annually. This, over time, will cut thousands in interest payments and eliminate your mortgage several years early.
- 3). Review your mortgage to see if it is assumable. This means that another person can take over the loan without involving a refinance.
- 4). Find a new mortgagor (debtor) willing to take on the mortgage burden. Some folks in dire straits use this option and then rent out a room in their old house from the new owner. Contact your mortgage lender to verify an assumable mortgage.
- 5). File bankruptcy. In order to fully eliminate your mortgage, you need to file Chapter 7 bankruptcy. This is the Chapter in which your assets will be sold to recoup losses on debts. Any remaining debts not covered by assets will be charged off--including your mortgage. Bankruptcy will remain on your credit for at least seven years.
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