Here's How To Pay Off Your Mortgage Loan In One Half Time or Less And Save Thousands of Dollars
The process is extremely easy, and yet a revelation to most home buyers, particularly when they realize that they may be able to save more interest than 75% of the total loan amount. Simply, it is merely adding the next month's principal payment to this month's regular payment, which in effect does two things to your mortgage loan:
#1 - Reduces the term by one month each time you add an extra principal payment, and
#2 - Ultimately saves an amount equal to the interest that you would have had to pay with the next regular payment, which in the early years of the mortgage may be eight times greater than the principal amount each month.
Note: Even if you can't make that much of a payment, you will still save money if you even make partial extra payments or periodic extra payments.
If you would like a detailed explanation and gain a more thorough understanding of the process and how to properly implement it with your lending institution, click here for my corresponding article.
Visit my web site for additional resources and services: http://www.LawrenceYerkes.com
and visit BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)
Copyright 2006 by Timon, Inc. All Rights Reserved.
Matthews Capital Markets - Tampa, FL
858-699-4590
Lawrence:
This is informative but I wonder why someone would want to payoff their mortgage when the after-tax cost is less than 4%.
Wouldn't it make more sense to carry a big mortgage and get the maximun write-off so you can invest in: more properties, your 401-k, an IRA, stocks and bonds??
Ric Edelman talk about why you should carry a big mortgage and never pay it off.
Aug 29, 2006 06:27 PM
RE/MAX Preferred - Medford Township, NJ
Broker Associate, Southern New Jersey Real Estate Services
The most honest reply that I can give to you is that "it depends". That %4 may or may not be valid, depending on the scenario. Everyone's situation is unique and they have different levels of risk to which they are willing to be exposed.
My purpose was not to address all financial investment options in one article (although I do have plans to cover more of that in future articles), but to focus specifically on a simple method to save on the total money expended on your mortgage to pay interest and indirectly help build equity that is a fairly easy, relatively risk-free for the appropriate people and allows you to start small and work your way up over time.
I know that Ric thinks that the bigger and longer the mortgage, the better... never pay it off, just keep using the money to reinvest at higher rates and take advantage of the tax write-offs and higher investment rates of returns. It may be appropriate for those with higher risk thresholds, but depending on what you invest in, the timing and period length, you also have major risks of loosing money in an investment.
Again, my article is not an overall financial consult, it's an isolated focus on how you can pay off a current long-term mortgage early, if you so desire, and save a lot of money you would be paying out to interest.
Of course any decision should be done from within the context of your overall desires, goals, situation, environment and projected future conditions and, hopefully, with the input of an experience financial advisor who knows you, how disciplined you are and understands the level of risk you can handle and are willing to accept.
There are many scenarios where having the mortgage (for example, on a second home that you only live in a short time each year, you will not sell, is strictly for pleasure and you don't rent out) has minimal tax advantages. It also assumes that remortgaging is not a better option for you.
If you prefer or have made a decision to being debt free, if your need is to shorten the length of time you will be paying a mortgage, then this is a way to do it, particularly if, for whatever reason, you are not able to remortgage. This is a low risk method with significant cost savings, thereby increasing your ability to build equity.
Visit my web site for additional resources and services: http://www.LawrenceYerkes.com
and visit BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)
Copyright 2006 by Timon, Inc. All Rights Reserved.
My purpose was not to address all financial investment options in one article (although I do have plans to cover more of that in future articles), but to focus specifically on a simple method to save on the total money expended on your mortgage to pay interest and indirectly help build equity that is a fairly easy, relatively risk-free for the appropriate people and allows you to start small and work your way up over time.
I know that Ric thinks that the bigger and longer the mortgage, the better... never pay it off, just keep using the money to reinvest at higher rates and take advantage of the tax write-offs and higher investment rates of returns. It may be appropriate for those with higher risk thresholds, but depending on what you invest in, the timing and period length, you also have major risks of loosing money in an investment.
Again, my article is not an overall financial consult, it's an isolated focus on how you can pay off a current long-term mortgage early, if you so desire, and save a lot of money you would be paying out to interest.
Of course any decision should be done from within the context of your overall desires, goals, situation, environment and projected future conditions and, hopefully, with the input of an experience financial advisor who knows you, how disciplined you are and understands the level of risk you can handle and are willing to accept.
There are many scenarios where having the mortgage (for example, on a second home that you only live in a short time each year, you will not sell, is strictly for pleasure and you don't rent out) has minimal tax advantages. It also assumes that remortgaging is not a better option for you.
If you prefer or have made a decision to being debt free, if your need is to shorten the length of time you will be paying a mortgage, then this is a way to do it, particularly if, for whatever reason, you are not able to remortgage. This is a low risk method with significant cost savings, thereby increasing your ability to build equity.
Visit my web site for additional resources and services: http://www.LawrenceYerkes.com
and visit BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)
Copyright 2006 by Timon, Inc. All Rights Reserved.
Aug 30, 2006 02:56 AM
Rainer
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Lawrence Yerkes
Broker Associate, Southern New Jersey Real Estate Services
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