Little Known Secret: Eliminate your Mortgage in 23 years or less!
?>
Download eBooks and Software
 Fully Verified Winning System Since 1999 & Vip Club Picks!
Winning Sports Picks & Predictions By Zcodesystem.com - Nhl, Nfl, Mlb And Nba Predictions And Picks From The Best Experts In The Industry + Fully Automated System Proven Since 1999 Awesome Conversion 5.26% And Recurring 60% Commission!
The Lotto Black Book
This Radical Approach To An Online Sales Letter Converts In The 3-5%... We've Never Seen Something Like This Since The Early Days Of 2004-2005 And I'm Sure You Haven't Either... We Convert More Than Our Competition And We Pay Out More... Try It!
Paleo Recipe Book - Brand New Paleo Cookbook
Brand New Paleo Diet Cookbook With Over 370 Recipes. Pays 70% Commission On This High-quality, Easy To Sell Product. Get Banners And Promotional Material At Http://paleorecipebook.com/affiliates.html
Articles > Business and FinanceLittle Known Secret: Eliminate your Mortgage in 23 years or less!
by: Tom Levine Wanna know a little secret? There is an ingenious method you can use, to pay off your 30 year fixed rate loan, in 23 years or less. It’s straightforward, simple, and easy to understand. In this article, we’re going to explore this little known secret, and we’ll provide several examples of how it works, a few methods on how to implement, along with some information on where to go and how to get started. 1. Accelerated Payments: By accelerating the payment structure on your loan, the life of the loan is reduced: - In a normal 30 year fixed rate loan situation, your monthly payment is applied towards principle and interest. It is amortized over the course of 30 years.
- So any money above and beyond your normal payment is applied solely towards the principle of the loan.
- By reducing the principle of the loan, you are reducing the total amount of interest that must be paid, and that equates to an early loan payoff.
2. An Illustration: - You bake a cake (principle), and put it in the oven. Once the cake is out of the oven, you’ll need to frost it with icing (interest). Let’s say your cake is 12 inches in diameter, and let’s say you need 3 jars of icing.
- But you’re hungry, so you eat half the cake early. Now, the cake is only 6 inches in diameter. Because of this, you only need 1 jar of icing.
- By reducing the cake (principle), you’ve reduced how much icing (interest) you need.
- Furthermore, it takes less time to frost 1 jar of icing.
- So, by paying a little more in principle, you reduce the interest owed. That reduces the life of the loan.
3. Methods: Think of it this way: All you have to do is make 1 extra monthly house payment a year. Do that and you reduce the life of your fixed rate loan by about 7 years! You can be as creative as you want to accomplish this, but here are 3 known methods: - Bi-Weekly Payments: Normally, you make your house payment once a month, or 12 times a year. But with a Bi-Weekly payment structure, you take your normal house payment, and divide it by two. This is the amount paid every two weeks, instead of once a month. By doing this, you basically make 1 extra (monthly) payment a year.
- Double Payments: Double Payments simply means an extra house payment. Once a year, you write out a check for twice the amount. So, if your house payment is normally $1,000 a month, then on December 1st, for example, you’d write out a check for $2,000. This, in essence, accomplishes the same thing that Bi-Weekly Payments accomplish. You make 1 extra payment a year.
- 1/12 increase in payment: Increase your monthly mortgage payment by 1/12, and you accomplish the same thing. Let’s say your house payment is normally $1000. 1/12 of your house payment is $83. So, you start making payments for $1,083. Guess what? Your loan is paid off in about 23 years instead of 30.
Sidenote: A “Bi-Monthly” payment is not necessarily the same thing as a Bi-Weekly payment. It may just mean that you are paying ˝ your monthly payment on the 15th and ˝ is paid on the 30th. The key is this: Are you paying a little more each year, such as 1 extra house payment? If you are, then early payoff is your ripe reward! 4. Here’s an Example: Bob has a $300,000 loan at 7% interest, and his monthly mortgage payment is currently $1995.91. Each year, Bob pays $23,950.92. - Bob calls his lender, and his payment schedule is restructured as a bi-weekly payment. Every two weeks, Bob writes a check out for $997.96. Because of the two extra payments this year, Bob will have paid $25,946.83. His loan is reduced by about 7 years.
- Or, on December 1st, Bob writes out a check for $3,991.82. Because of this 1 extra payment, Bob will have paid $25,946.83. His loan is reduced by about 7 years.
- Or, Bob pulls out his calculator, and adds 1/12 to his monthly payments, which equates to $166.33. Bob now writes out a check each month for $2,162.24. At the end of the year, Bob will have paid $25,946.83, and his loan is reduced by about 7 years.
5. The Next Step: - How disciplined are you? Because, if you’re not disciplined at all (like myself), then what are the chances of you sticking with the program? Call your lender, and set up the bi-weekly payment. This way, you are totally hands off and it will all become automatic and habitual. You can always change it back if times get rough, but at least there’s no temptation to revert back to cheaper payment.
- Or, do you have online bill-pay with automatic payments? If so, go into your bank online, and add 1/12 to your monthly payment.
- Can you afford to accelerate your payments even further? Adding 2 extra monthly payments a year, for example, reduces your loan by about 10 years. Of course, now it might be time to consider examining a new secret strategy, the 15 year fixed-rate loan!
We’ve enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense. Copyright 2004, by LoanResources.Net Publisher’s Directions: This article may be freely distributed so long as the copyright, author’s information, disclaimer, and an active link (where possible) are included. Disclaimer: Statements and opinions expressed in the articles, reviews and other materials herein are those of the authors. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. The author will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site. About The Author
Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services. You can check out Tom's website here: http://loanresources.net, or you can email Tom at info@loanresources.net. |
?>
News on Business and Finance
Expert Opinions on Investing in Africa, Africa's Largest Consumer Market, and KONY 2012, in African Business Review
NORWICH, England, May 23, 2012 /PRNewswire/ --This month's issue of digital magazine African Business Review free to view onlineGetting the expert's view is always important when it comes to finance and ... The Business Finance Store Discusses Small Business Debt Collection
The Business Finance Store discusses some strategies for small business debt collection.Santa Ana, CA (PRWEB) May 23, 2012 Wonga, a high profile UK-based short-term lender, is being criticized by the British Office of Fair Trading for its debt collection practices, the BBC reported. One such debt collection tactic included suggestion that the debtor committed fraud and would be reported to the ... The Business Finance Store Discusses the Effects of Business Credit on Personal Credit
The Business Finance Store discusses some of the potential repercussions of business credit on a business owner’s personal credit.Santa Ana, CA (PRWEB) May 22, 2012 A recent study by Pepperdine University and Dun & Bradstreet Credibility Corp. showed that most small businesses tend to get funding through traditional channels, the Washington Post reported. Seventy-one percent of small business ... 3gnewsroom.com
Immediate Approval of $7000. Finance Computers, Office Equipment, Business Travel and More. Plus, receive FREE small business credit builder - build your business score with D & B Today!! Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
WASHINGTON--(BUSINESS WIRE)--The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for April was $6.1 billion, up 20 percent from volume of $5.1 billion in the same period in 2011. Volume was down 10 percent from the previous month. Year ...
|
