Using a Mortgage Accelerator to Pay Off Your Mortgage in 10 Years
Author: IgorBuces Total views: 5 Word Count: 479
With the present economical downturn we are experiencing, we find ourselves to ensure that we make the best use possible of the money we make. In order to do so, many of us need to shift the way we think about our finances and how we can change our financial habits to make optimal use of every dollar we make.
For example, most people are happy with having most of their money in a checking or saving account where they get little return. In this case, the bank is the one taking advantage of the use of your money.
Another typical example is the traditional mortgage. In a typical 30 year home mortgage, it's not until the 20 years and 2 months mark that we make the same amount toward our principal that we do toward the interest.
Since most American only lives in their homes between 5 and 7 years, we barely decrease the principal in our mortgage. This is so because the way the mortgage is structured heavily favors the banks since at the beginning most of the money goes to pay the interest portion.
For over twenty years, people in countries like Australia, the U.K. and Canada have used mortgage accelerator programs to pay off their homes in 10-15 years saving an average of $150,000 on their mortgages. This type of programs is now available in the U.S.
A mortgage accelerator works without having to make any additional payments toward the mortgage. It works in the following way:
1. At the beginning of the month, a piece of software will tell you the optimal amount to pay to your 1st mortgage to ensure you are paying as little interest as possible. The money for this payment will come from an advance line of credit (HELOC.) This transaction reduces the debt in the 1st mortgage and moves you further down the amortization schedule.
2. You then deposit your monthly income in the HELOC decreasing the balance on the HELOC. When you do this, you have your money working against your debt in the HELOC by saving on the interest you'll be charged.
3. You charge all of your daily expenses on a credit card to allow money to sit in the HELOC for as long as possible.
4. At the end of the month, you pay the credit card off before incurring any interest charges from the credit card company.
By doing a few changes in your financial habits, you can start making the bank's money work for you and no the other way around. Using other people's money (the bank's money) is one of the surest and fastest ways to become financially independent.
Although it make take a while to get use to the changes, you can think of the other alternative; After all, how much effort and time would it take you to make the money you would save if you could pay off your home mortgage in 10 years?
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To find out more about how you can use a mortgage accelerator program to pay off your home in 10 to 15 years and save an average of $150,000 visit our mortgage accelerator site where you can find information on how a mortgage accelerator works.
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