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How To Pay Off Your Mortgage Loan In Half The Time Or Less And Save Thousands Of Dollar$

The process is extremely easy, and yet a revelation to most home buyers, particularly when they realize they can save more interest than 75% of the total loan amount.

Simply, it is merely adding the next months 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 principle amount each month.

It must be noted however, that this process does not eliminate the necessity of making the next months regular payment, but merely moves your next payment down the amortization schedule, one more line closer to the final payment.

In order to accurately follow the progress of your mortgage loan, you will need an amortization schedule.  This is a form indicating the monthly payment breakdown of the interest and principal of each payment and the remaining mortgage balance.

As an example, an amortizations schedule for a $250,000 mortgage loan @ 10% interest for 30 years, with an interest and principal payment of $2,193.93 would look like this:

You will note that with each payment the principal increases slowly, while the interest proportionately decreases.  Towards the final payments, the procedure will gradually reverse and the principal will exceed the interest payments. 

By using the sample chart above, the typical application would be to pay the regular payment on line #1 amounting to $2,193.93(plus the required taxes and insurance, if you are required to pay them into an escrow account), and then also add the principal payment on line #2  which will also be applied to your principal balance.  In effect by doing this, you have actually saved the interest payment on line #2 in the amount of $2,082.41.  The next payment that you will make will be the one on line #3, NOT #2.

If you choose to pay several additional principal payments instead of only one, the savings will compound dramatically.  As an example, with three additional payments being made, you will pay the regular payment on line #1 amounting to $2,193.93 then adding principal on line #2, line #3, and line #4.  (Again I stress that these additional payments do not permit you to miss any regular monthly payment).  However, you will have saved $6,244.44 in interest from lines 2 through 4 and have shortened your mortgage by year.

If there is more than one income in the family, this program can be accomplished with little financial strain.  Many couples apply their entire secondary income to the loan each month and payoff their home in just a few years.

Keeping an accurate record of your progress is a must, plus the fact that it gives you a great feeling of accomplishment as you see your monthly savings.  Each regular and additional payment should be registered every month, and of equal importance you should advise your mortgage lender to exactly what you are doing each month. 

The best way to accomplish this is to attach a letter with each payment, outlining the breakdown of the payment as follows:

If you choose to send in more than one principle payment, your breakdown would change accordingly.

Using this method as a regular monthly habit, your mortgage loan will be paid in 15 years instead of the 30 which gives you a savings of $269,370.45 on a mortgage of $250,000 @ 10% interest.  You may be shocked to know that the interest for a full term 30 year mortgage of $250,000 @ 10% interest is $539,796.28. 

Free Over-The-Phone Market Analysis...........If you are thinking of selling your home or just want to know the value in today's market just give me a call at : 1-609-408-3679. 

 Whatever your real estate needs, I look forward to a chance of working with you!