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Want To Own Your Home Quicker? Here's How(Simple Math)

By Michael Jacobs

Industry Observer CalDRE #01165532

April 16, 2011 06:04 AM

Want To Own Your Home Quicker? Here's How(Simple Math)

12 + 1 = 23

Say, what?

Try This...

12(months) +1(one extra payment--principal only)

equals

30(year original loan) - 7(number in years of savings)

HUH?

Did you know that there is a way to save a lot of $$$ on your mortgage?

Did you know that if you make just one extra payment a year

(of course this is a principal payment solely)

you will cut seven years off your mortgage---instead of a typical 30 year mortgage,

you could own your home outright in just 23 years!

No mathematicians were harmed in this example although they may be shaking their heads.

Always check with the appropriate professionals to verify how this will effect your individual financial situation.

Imagine, what would happen if you applied this to your 15 year mortgage?

Michael Jacobs is a Realtor serving the San Gabriel Valley and the northeast foothill communties within the city of Los Angeles. He can be reached at 818.516.4393 cell or michaeljacobs@coldwellbanker.com. Always check with the appropriate professionals for financial or tax advice.

Want To Own Your Home Quicker? Here's How(Simple Math)

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Belinda Spillman

Aspen Lane Real Estate Colorful Colorado - Aurora, CO

Colorado Living!

Michael. This is such great information that hardly any of the general public know about. It is such a no-brainer. Thanks for posting.

Apr 16, 2011 06:10 AM

Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Belinda --- another great example of keeping it simple. It's one of my favorite things to tell first time buyers.

Apr 16, 2011 06:25 AM

Michael HassanPour

Beverly Hills-Coldwell Banker Beverly Hills North - Beverly Hills, CA

Esq. Beverly Hills Properties, Brentwood, Bel Air

Thank you michael. Once again a great subject for discussion.

As you mentioned one must check with their lenders since they all have different process' in applying extra (additional) payments to the principal. But when they get it right, it works like a charm.

Have a great day.

Apr 16, 2011 07:02 AM

You are right, Michael - check and re-check with your lender and watch how the extra payment is being applied. It needs to be monitored to ensure accuracy. Hope you are enjoying the nice weather today.

Apr 16, 2011 07:13 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

I love that math. I wonder what two extra payments a year would do? Would that math be linear? Could you knock 14 years off your mortgage?

Apr 16, 2011 10:29 AM

Chris Ann - I went to Dave Ramsey's website and the mortgage calculator there shows a bit different scenario with one extra payment paying off the mortgage in 25 years, 4 months and one extra payment multiplied by two months paying off the mortgage in 22 years. Again, I'm not a CPA nor a financial advisor and the information from various sites has not been verified and is not guaranteed. How's that for a disclosure? Anyway, I'm in the camp that thinks paying off a mortgage is not only great for your psyche but for the power it will bring you.

Apr 16, 2011 11:40 AM

Judy Klem

Transition Stage LLC - Shelton, CT

Home Staging, Senior Move Management, Fairfield/New Haven counties

HI Michael - This is a great post, and a really great way to empower yourself by reducing that huge debt a lot earlier. I hit Suggest.

Apr 16, 2011 11:43 AM

Judy - it certainly is empowering to first know and then act upon eliminating your mortgage payment. Imagine where all of that money could be invested versus paying interest. Thanks for suggesting.

Apr 16, 2011 12:11 PM

Suzanne McLaughlin

Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN

Sabinske & Associates, Realtor

The first year we owned our home I made 13 payments in that year....the second year I made 14 and every year since then, we made at least 13 payments and never refinanced except once to get a better rate, and didn't take cash out...guess where we are? Sitting pretty.

Apr 23, 2011 02:15 AM

Suzanne --- now that's a formula that certainly calculates. Nicely done.

Apr 23, 2011 03:47 AM

Want To Own Your Home Quicker? Here's How(Simple Math)

Comments(10)

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