How To Pay Off Your Mortgage In 2 Ways For Debt Free Retirement 228
Im sure the question of how to pay off your mortgage has crossed your mind at some point. The global economic crunch has got hundreds of thousands and Americans extremely concerned about their mortgage debt.
We all want to live a debt-free life and we want to save thousands of dollars. Paying off your mortgage is an investment strategy that does not involve risks.
Because we get confused with the many strategies and methods presented to us these days, we get stuck at asking the same question and not take action.
Making sure that you are making the most logical decision is not something you should feel bad about. After all, your home is your major financial asset.
The many mortgage pay off techniques can be summed up into two specific strategies.
Strategy one: mortgage prepayment
The first method on how to pay off your mortgage is referred to as mortgage prepayment method. All this simply means is that you use extra cash from your pocket to pay off your mortgage faster. The most common ways is to contribute extra from your paycheck towards your mortgage each month, use the biweekly prepayment program or make extra payments whenever you have extra cash available to you.
You probably know about these strategies already. The mortgage prepayment strategy requires you to pay extra to pay off your mortgage. This means that you have to weigh you priorities ” that is if you should use the amount thats left from your income to pay off your mortgage faster, invest in on your 401(k), or save it for your kids college education. At certain times, this decision can be very hard to make.
Two: Mortgage Acceleration
This particular method is relatively new as it has only been around for the last 10 years. Mortgage acceleration makes use of the concept of leverage in paying off mortgage faster. Some of those who have utilized this method have paid off their mortgage without changing their financial lifestyle or spending more than what they are supposed to spend.
The way mortgage acceleration can be achieved through leverages is very simple. If you have one credit card that has an interest rate of 2% and another with a rate of 6%, how do you suppose will you be able to pay both and at the same time save thousands of dollars?
Thats right. You borrow funds from the credit card that only has an interest rate of 2% to pay off your debt from the other credit card. This will get you to save more or less 4% of interest and in the next 10 to 12 years, you will already have a considerable sum of interest savings.
The same strategy can be applied if you wish to pay off you mortgage early. If, for instance, your mortgage has an interest rate of 6%, you may open up a home equity line of credit. What you will have to do is to deposit your paycheck to the home equity line of credit at the beginning of the month and pay off your bills towards the end of the month. You will be allowed to convert your home equity line of credit to a 2% interest if and when you are able to set up everything correctly.
Now, what is left for you to do will be to loan money from your home equity line of credit and use this to pay off your mortgage.
And the end result is simple. You could slash 13 years of your mortgage and save over $63,000 of interest using this one simple financial step.
And you don’t have to change lifestyle in the process.
You’ll never have to worry about How To Pay Off Mortgage again! Visit us on the web at How To Pay Off Mortgage Strategy Guides to learn more.
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