Little Known Secret: Eliminate your Mortgage in 23 years or less!

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 ½ your monthly payment on the 15th and ½ 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.

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.

---

Google News Updated : Wed, 09 Jul 2008 13:08:20 GMT Polygamist sect leader swaps jail for hospital - MSNBC KVAL Polygamist sect leader swaps jail for hospital MSNBC - 2 hours ago Warren Jeffs, the head of the Fundamentalist Church of Jesus Christ of Latter Day Saints, has been hospitalized. Douglas C. Pizac / Pool via Getty Images FILE July 2: Michael Sean Winters, author of "Left at the Altar," joins the "Morning Joe" crew to ... Jeffs was taken to the Sunrise Hospital and Medical Center in Las ... CNN Warren Jeffs Remains In Local Hospital KXNT Salt Lake Tribune - The Associated Press - Deseret News - Las Vegas Review - Journal all 309 news articles Publ.Date : Wed, 09 Jul 2008 10:48:40 GMT Google adds third dimension to online social relationships - NetworkWorld.com Siliconrepublic.com Google adds third dimension to online social relationships NetworkWorld.com - 2 hours ago By Mikael Ricknäs , IDG News Service , 07/09/2008 Google has entered yet another space with the launch of Lively, a tool for creating 3D social spaces on Web sites, which is now available in a public beta test. Virtual world tipping point: Is there an enterprise use? ZDNet Google Introduces a Cartoonlike Method for Talking in Chat Rooms New York Times Reuters - The Tech Herald - eFluxMedia - Wall Street Journal all 263 news articles Publ.Date : Wed, 09 Jul 2008 11:04:08 GMT US MBA's Mortgage Applications Index Increased 7.5% Last Week - Bloomberg 100 Mortgages US MBA's Mortgage Applications Index Increased 7.5% Last Week Bloomberg - 1 hour ago By Shobhana Chandra July 9 (Bloomberg) -- Mortgage applications in the US rose for a second straight week, a sign that falling home prices are attracting some buyers. Mortgage applications up 7.5% last week: MBA MarketWatch US mortgage applications increased last week-MBA Reuters CNN - Forbes - RTT News - 100 Mortgages all 15 news articles Publ.Date : Wed, 09 Jul 2008 11:38:08 GMT German shares up midday as financials rebound - Forbes ABC News German shares up midday as financials rebound Forbes - 1 hour ago FRANKFURT (Thomson Financial) - German shares were higher midday, led by financials, which rebounded from Tuesday's strong losses, and helped by soothing words from US Federal Reserve Chairman Ben Bernanke and easing oil prices. Fed ready to aid investment banks BBC News Fed Sees Turmoil Persisting Deep Into Next Year New York Times International Herald Tribune - Reuters - Financial Times - CNNMoney.com all 1,484 news articles Publ.Date : Wed, 09 Jul 2008 11:46:08 GMT Coalition to lobby for US health-care reform - Reuters KULR-TV Coalition to lobby for US health-care reform Reuters - 17 hours ago WASHINGTON, July 8 (Reuters) - A coalition of unions, think tanks and other groups launched an advertising campaign on Tuesday saying they want to ensure that health-care reform tops the US political agenda after the November elections. Coalition begins universal health care campaign Great Falls Tribune Coalition launches push for health care reform Milwaukee Journal Sentinel Rapid City Journal - Tampa Tribune - Beyond Chron - Washington Post all 291 news articles Publ.Date : Tue, 08 Jul 2008 19:09:32 GMT Iraq Wants Withdrawal Timetable In US Pact - Washington Post ABC News Iraq Wants Withdrawal Timetable In US Pact Washington Post - 8 hours ago By Ernesto Londoño and Dan Eggen BAGHDAD, July 8 -- Iraq's national security adviser said Tuesday that his government would not sign an agreement governing the future role of US troops in Iraq unless it includes a timetable for their withdrawal. Maliki's Withdrawal Card Wall Street Journal Iraqi Officials Still Insisting on Timetable to Withdraw New York Times istockAnalyst.com - AFP - CNN - Xinhua all 1,578 news articles Publ.Date : Wed, 09 Jul 2008 04:41:08 GMT G-8 Conference Tackles Global Warming Treaty - Washington Post BBC News G-8 Conference Tackles Global Warming Treaty Washington Post - 1 hour ago By Michael Abramowitz RUSUTSU, Japan, July 9-- The leaders of the countries most responsible for greenhouse gas emissions pledged Wednesday a shared effort to combat global warming, but developing countries like China and India continued to balk at the ... Bush: 'Significant progress' on climate change The Associated Press Emerging Nations Join G-8 on Climate New York Times Aljazeera.net - CNN International - Bloomberg - Telegraph.co.uk all 2,035 news articles Publ.Date : Wed, 09 Jul 2008 11:20:59 GMT Clickbank Content Work From Home

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Some Mortgage Loans are Available with Absolutely no Money Needed From You

Today, FHA will loan up to 97 percent of the... Read More

Getting The Best Home Equity Loan

Owing to the popularity of home equity loans, there are... Read More

How to Get Your Home Mortgage Loan

If you are thinking of purchasing a new home soon... Read More

Home Equity Lines of Credit - the Basics

A Home equity line of credit is a loan which... Read More

The Best Way To Get The Right Mortgage

Are you thinking of buying a home? If so, then... Read More

Ten Things a Mortgage Processor Must Know to be Effective

From time to time, we hear a story about a... Read More

Credit Problems? With a Subprime Mortgage Lender, Poor Credit is Not a Problem

Have you been turned down for a home loan recently... Read More

Do Your Homework - Find the Mortgage That Fits Your Lifestyle and Your Budget

You've been looking at houses for months, and finally you've... Read More

Jumbo Mortgage Loans - Getting Approved for a Jumbo Mortgage Loan Online

Getting approved for a jumbo mortgage loan online is similar... Read More

A Guide to Quick Homeowner Loans

The search for quick homeowner loans can seem futile at... Read More

Where To Find The Best Rates For Your Mortgage?

As with all of my articles this will be based... Read More

Advantages Of Mortgage Pre-Approval

There are several advantages to getting mortgage pre-approval before looking... Read More

Kings Bay Saint Marys & Kingsland Georgia Real Estate - Getting a Home Loan with Damaged Credit

So, you have made the decision that you would like... Read More

Home Buying ? What Can You Afford?

Okay, you've decided to buy a home and are trying... Read More

The Top 5 Things You Must Know Before Applying for a Mortgage

You've been thinking about buying your own home for quite... Read More

5 Home Buying Essentials

Purchasing a home involves certain important, even essential, steps that... Read More

13 Extra Costs to be Aware of Before Buying a Home

Whether you're looking to buy your first home, or trading... Read More

Self Employed Mortgage Loans - A Survival Guide

When you're self employed you have numerous advantages. As you... Read More

Mortgage Advice To Make Mortgages A Really Smooth Ride

Mortgages are easy as long as you understand them well.... Read More

Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime Mortgages

Sub-prime mortgages are not that much different from average mortgages.... Read More

Applying Online For A Home Loan Can Give You an Instant Approval

"Instant Approval For Home Loans" is a common refrain for... Read More

Refinancing After Bankruptcy

Refinancing after a bankruptcy can seem like an especially difficult... Read More

Choosing a Real Estate Agent

Before you go looking at houses, you'll need to find... Read More

Home Equity Can Create a Never-ending Money Cycle

What could you do with $10,000? Well, you can have... Read More

Homeowners? insurance: The mortgage connection

A home owners' insurance is the cover for the house... Read More