When you first moved into your home it seemed like the best financial move.
A home is the best gift and investment any family can have.
But as you earn your paycheck each month, you quickly realize that sometimes approximately 40% of your monthly hard earned paycheck goes towards paying off your mortgage and it feels worse as most of that is just for the mortgage interest payments.
This seems acceptable however…
…Do you realize that your hard earned paycheck is applied towards mortgage interest making the bank rich?
If you decide to refinance or move to another home your 30 year mortgage automatically now becomes a 40 year mortgage. For most of us it could take up to four decades to pay off the mortgage.
And let’s assume you are approaching retirement.
Your mortgage could last longer than your retirement and then your kids get to inherit your home. But wait they will inherit the mortgage on your home and will be burdened with this as well.
Their much anticipated inheritance could well turn out to be debt.
You have managed your debt so that expenses will be minimal at retirement.
Is there anything else you could do to get rid of the mortgage burden before retirement or send your kids to college without changing your current lifestyle?
Well I am excited to show you a new approach to this below.
We will make an assumption that your largest monthly bill is…
Your monthly mortgage repayment
You now can eliminate the significant amount of the interest payable on the mortgage debt.
Using the method of mortgage acceleration , you could save thousands in interest and pay off your mortgage at least 13 earlier, without spending more or refinancing.
A leading financial magazine has conducted a survey on debt. It shows that almost 83% of American homeowners are in debt with the mortgage their biggest debt.
Less than 5% of Americans are able to actually retire financially independent.
And the best way to become financially bullet-proof is to retire without any debt.
Mortgage Acceleration is the quickest way to eliminate mortgage debt without you changing your lifestyle.
By definition, mortgage acceleration is the practice off accelerating the pay down of your mortgage in record time and changing the time it takes to pay off your mortgage principal.
The fastest way to pay off your mortgage early and reverse the payment of interest is to apply extra payments each month to your mortgage.
Most of us don’t have the ability to make extra payments and have little wiggle room in our budgets each month. So this is where the mortgage acceleration steps in. Without spending more you can eliminate your mortgage payment.
It allocates your monthly repayment more towards principal and less towards interest costs.
And the biggest benefits of all, your mortgage could be paid off in less than 10 years. Imagine saving thousands.
This is how mortgage acceleration can be applied to your situation and change your financial life.
With this extra cash, you would be able to put your kids/grandkids through college, or purchase a second property for investment purposes or just have the extra cash to enjoy during retirement.
Here is a question I would consider when starting off:
Have you asked your broker or banker how much you are scheduled to repay on your mortgage over the entire 30 year term?
Here’s why you should be asking that first question.
Everyone knows that interest is the bulk of your monthly payment the first few years, which is in favor of the lien holder. And no one disputes it. It is considered normal business procedure. But if you have crunched the numbers on the average mortgage, you would be amazed, and probably quite upset.
Situation 1: You Are in Your 20’s and Have at least 40 Years to Retirement:
You bought your first home for $300,000. Based on your credit and earnings, you qualified for a 6% interest rate for your first home. Your total repayments over a 30 year period, for interest only, will be approximately $347,514.
You guessed right, the repayments are more than you borrowed on the home.
By using the mortgage accelerator , this same mortgage can be paid off in half the time saving you $60,000 in interest.
Instead of being in your 50's when your home is paid off, you will only be around 40.
You can use the equity in your existing home to fund the down payment on an investment condo.
Once your mortgage is paid off, that could represent financial independence and could be the starting point for an early retirement.
The thought of enjoying the benefit of everything you worked long and hard for, in your later years will make you healthier in the long run by being stress free.
And remember, you haven't changed your current lifestyle at all.
What If You Are Already In Your 40’s?
Let’s assume you want your kids to have a debt free college experience and you planned on paying for your kids’ college fees.
Imagine your kids stuck in a corporate job spending 10 -15 years of their life paying off college debts. That financial legacy will continue to perpetuate itself to their kids and so on.
Using the debt payoff accelerator system , you can build equity in your home and use this equity to pay for college fees. You don’t have to worry whether they may qualify for loans or your investments will be enough to cover the student tuition.
Imagine the gift of a debt free college experience at graduation.
Using the same example as the $300,000 mortgage above, with the mortgage accelerator, you will still be able to have your home paid off by the time you are ready for retirement.
And let’s assume there is a medical emergency. Building equity in your home allows you to use this as an emergency fund for your family.
What if You are In Retirement Or Close To Retiring
Do you know what is the biggest threat to your retirement? It’s actually paying off debt with your retirement savings.
Let’s take a look at the last year. The stock market fell. And as a result this has caused some pressure on your retirement investments.
Now if your retirement savings are worth less, then you need more money in retirement to pay debt and live off your retirement savings.
And you can not completely rely on social security. You may need to cut back spending time with the family and figure out ways to supplement your retirement income.
You may be in a position where you don’t have to worry about making the debt payments. But imagine what you could do if you did not have the debt going into retirement. You could change someone’s life and help out your family.
Depending on how close or far away from you are from retirement, you could use the mortgage accelerator in different ways to compliment your investment goals. Be sure to examine your options closely. Accelerate your mortgage as fast as financially possible.
So How Does This Work And What Is The True Cost Of The Mortgage Accelerator?
What’s Required For Mortgage Accelerator Program
- Real Estate has to be in your own name
- Have an existing Home Equity Line of Credit or you can qualify for a Home Equity Line of Credit
- You have to have a more income to debt or don’t spend more than you earn each month.
A mortgage acceleration program works with a Home Equity Line Of Credit (HELOC). Your paycheck is deposited into the HELOC and typically all your bill payments are made from the HELOC. This HELOC acts as a new checking account to accelerate the payoff of your mortgage.
The average daily balance allows you to pay off the home loan much faster than a traditional mortgage. This reduces the principal balance on your mortgage at a rapid rate. You also benefit if you have any extra cash that can be applied daily to the principal on the loan.
Would I Only Be Able To Accelerate My Fixed Rate Mortgage?
A mortgage acceleration program can work for most types of mortgages for example ARM and an interest only mortgage.
We all know that a fixed rate mortgage adjusts after a period of time. So let’s assume you have a seven year adjustment on your ARM. Now let’s say you refinance to a 30 year mortgage. So it will take you 37 years to pay off your mortgage assuming you don’t move or apply for a new ARM. With the mortgage acceleration program you could end up paying off that mortgage in 15 years instead of 37 years. Imagine the saving for yourself.
And the benefits are the same for an interest only mortgage. Imagine the ability to pay off an interest only loan in under 30 years.
And if you run out of money in retirement, you could end up taking out a reverse mortgage to finance your retirement. But here is the catch to qualify for a reverse mortgage. You need to have equity in your home. A mortgage accelerator program gives you the advantage to build equity so you have the option of taking out a reverse mortgage in the event you ever need the extra finances.
When using the mortgage accelerator program there is no need to pay excessive fees for financial advisors to explain this to you. Most of the check and bill payment features are included in the mortgage accelerator and you get the benefit of using a fairly simple system, eliminating the need for consultations.
What is The Best Starting Point For The Mortgage Acceleration Program?
STEP 1: Where to Begin
A personal plan is always the starting point for the mortgage acceleration system. You can figure out how to slash you mortgage debt and what it would take for you to accomplish this goal. You can create one yourself or you can seek some guidance. Any acceleration plan should take into account your income, bills and mortgage information.
Having a plan is also one of the best ways to know you are on track to eliminate your mortgage debt, and if you ever fall off track you can always get back on target easily.
STEP 2: Decide On The End Goal – When You Want to Be Mortgage Free:
The best way to eliminate your mortgage is to first set a date you want your mortgage fully paid off. Once you have this in mind, enter your information in a mortgage accelerator calculator and a mortgage acceleration plan will automatically be calculated for you. In this way you can decide whether the plan meets your goals or you want to use other means to accelerate the payoff of your mortgage.
An ongoing commitment to a mortgage accelerator program is extremely important. While the mortgage accelerator system itself can help you pay off your mortgage faster without spending more of your own funds or changing your lifestyle, there are other ways you could consider to accelerate the pay down of your mortgage.
Different Ways To Pay Off Your Mortgage
1.Biweekly Mortgage Payoff System
A Biweekly mortgage payoff plan has been around for over 13 years and is a widely accepted method of paying of making mortgage payments bi-weekly instead of monthly. In this way you end up with one extra mortgage payment each year.
NOTE: Sometimes a mortgage holder or private lien holder will not accept partial payments. Instead, put your half payments in a separate account. Make your monthly payment as usual out of this account. Then, either every 6 months, when you have the half payment available, send it to your mortgage company or wait until the end of the year when you will have a full payment to send in. Keep in mind, with a bi-weekly mortgage program instead of having interest reduced on a daily basis, unlike the mortgage accelerator system ; you will be making 1 extra payment a year.
2. Pay Extra Towards Your Mortgage Each Month
The second method of paying off your mortgage is to pay extra to rapidly reduce your mortgage principal. One way to do this is to have a budget in place to save extra money each month to spend towards your mortgage. Other ways typically include using overtime funds, bonus or your paycheck from a second job.
Types of Mortgage Acceleration Programs
Mortgage acceleration can sometimes seem confusing and can be referred to by different names. Some names that are used are Equity Excelerator programs, fast equity, money merge account, fast mortgage reduction.
When evaluating the various choices of mortgage acceleration programs for your situation, you will come across various pieces of technology to help you with the mortgage acceleration system. I would caution you at this point to consider any mortgage acceleration program based purely on the software to help you pay off your mortgage early. Software is a critical component, but if your HELOC is not set up correctly and you chose the wrong HELOC account balance for your situation, then you may have a challenging time paying off your mortgage on time. The set-up is more critical than the software itself.
There are some mortgage accelerator software programs that take care of this for you without any of the detailed entry and input. You don’t need to enter a lot of data each month. Acceleration calculators can also give you a detail of how much money can be saved by pointing out what areas you can curb spending in. If used on a yearly basis, mortgage accelerator programs and/or software tools, will enable you to achieve a financial freedom you might not otherwise attain with a traditional way of paying your mortgage.
Does This Sound Too Good To Be True
Has the thought ever crossed your mind that this method of paying off your mortgage faster without changing your lifestyle or paying extra sounds too good to be true? The concept of paying your mortgage off early has always been around. It started off ten years ago in Australia and New Zealand and the concept has been around for a long time. It is only recently gained acceptance and awareness in the U.S.
The best way to validate whether this may work for your situation or not, is to enter your numbers in a mortgage accelerator calculator. Take a moment, use the mortgage accelerator calculator that can be found on line, input your particular information, and you will see how this will benefit you in the long run. By saving on your interest payments and applying more money to the principal, you will be affectively accelerating your mortgage.
For example, let's use the same example as above but this time you have a $200,000, 30 year mortgage, with a 6% interest rate. If you can afford the fee of $397 to set up the mortgage accelerator program you can save over $64,000 in interest. You can get over a 460% return on your investment. Ask your financial advisor to run the numbers and you can judge for yourself whether this works or not. Who wouldn't like to accumulate money at this fast pace? And, you are not changing your current lifestyle, but are helping your kids or grandkids go to college and imagine what you can do with the additional savings.
Let’s Find Out How The Mortgage Acceleration System Can Benefit Us By Taking A Closer Look At The Following Example
Assume you plan to move in the first 5 years. As you know than in the first years, your mortgage company charges you almost five times more in mortgage principal rather than interest. So if you decide to move in 5 years or refinance very little progress is made toward your mortgage balance.
Let’s take a specific example to explain the situation above. Do you know if you have a $200,000 mortgage at 6% interest rate, you would end up spending almost 5 times more on interest than principal in the first 5 years? In this case you would spend $58,054 in mortgage interest and $13,892 in mortgage principal.
And now that you refinance or move the entire process repeats itself again. So a 30 year mortgage now becomes 35 years because after the first 5 years you start all over again. In 10 years you end up spending $166,000 in interest and $28,000 in mortgage principal. Almost no progress is made and now you are really working for your bank spending all your hard earned money on interest.
It’s time to take back control with the mortgage acceleration system
Banks have created the mortgage amortization schedule to work in their favor. They front end load interest payments that gives them the highest return on their investment. Using a mortgage accelerator calculator you can input your numbers and see first-hand how to plan to take back control.
What About The Home Equity Line of Credit (HELOC)
One of the key steps behind the mortgage accelerator program is that you need to have a HELOC to make this system work. A HELOC now replaces your existing checking account and is used as a means to pay off your mortgage early. When using the HELOC you are not borrowing any more money to pay off your mortgage. You are just using this as a means to deposit your funds, withdraw your bills and pay off your mortgage early.
Let’s examine some of the advantages of using a HELOC
You can set the limit on your HELOC. Usually only a small balance is required for mortgage acceleration and interest is calculated on a daily balance
- A line of credit may last for 10 to 15 years.
- Some HELOC are available with no transaction fees to deposit your income and make bill payments.
- You can avoid the payment of HELOC interest where your salary deposited into the HELOC is more than your bill payments.
-Also, you don’t have to start paying interest on money until it is actually spent. When compared to conventional credit cards, HELOC’s usually have lower interest rates but higher spending limits.
- Mortgage and HELOC interest paid money is tax deductible, in contrast to the traditional taxable savings account. Let's say you are in a 25% tax bracket and have a HELOC which is tied to prime + 1 (=6%), the interest you pay is 4.5%. But, if you are earning 4%, you will get a 1.5% return on your HELOC. This is where using the mortgage accelerator calculator will be beneficial to your situation. Please check your state to see if a HELOC is accepted there. Texas does not recognize HELOC.
- A HELOC can also be used as an emergency fund. This is where you can reserve your extra cash for day to day spending or for emergencies, as state briefly above.
So what are the disadvantages of a Mortgage Accelerator Program:
1.Your line of credit or HELOC may get frozen by the bank.
Due to the credit problem in the market banks may automatically value your home and freeze your HELOC limit. This is automatically done by the banks computer system. If your HELOC is automatically frozen you get an appraiser to revalue your home and ask for a second valuation. In this way you can get your HELOC unfrozen. As an alternative you could use a credit card to pay off your mortgage faster.
2.Your Mortgage Broker May Tell You, You Have To Refinance Your Mortgage
You may be requested by your bank or lender to borrow more than your need for the mortgage acceleration program. Though this may serve your lender interest it is not in your best interest. The best is to make sure you only use the HELOC solely for the purposes of paying off your mortgage, not to fund other purchases.
How Can You Apply The Mortgage Accelerator To Manage Your Finances Other Than Your Mortgage
Here are some ways you can use the mortgage acceleration program in addition to slashing your mortgage earlier.
1.Pay off Car Loans
Assume you have a car payment for 7 years. Instead of paying off the minimum each month you can use the HELOC and the mortgage acceleration system to pay off your car in about 4 years without changing your lifestyle and saving thousands. The mortgage acceleration system works the same way you are scheduled to pay off your mortgage and only substitutes your mortgage for your car payment. Imagine having a freehold car with no payment.
2.Credit Card Loans
Using the mortgage accelerator you could completely eliminate your credit card debt using the same methods to pay off your mortgage faster. This will put an end to high interest charges on your monthly credit card bills.
There are numerous ways in which the mortgage accelerator can work for you. We have just listed a few ideas above and once you begin to apply the mortgage acceleration program you will begin to see how this system can be applied to other areas of debt management. Not only will it eliminate debt but save you thousands.
The mortgage accelerator is the ultimate retirement planner. You can set your retirement date and use this system to figure out when you would like to retire debt free or without a mortgage. You are in control. Your retirement can be set for any age and you don’t have to work for the rest of your life to pay for that huge mortgage debt.
