Pay Off Your Mortgage Faster Without Refinancing!
Before I delve into a bit of a rant, let's be honest. You can do this by yourself. Simply make one extra payment a year and do it consistently or take your monthly payment, divide that 12 and pay that much extra on your mortgage consistently every month. And if you do this, presto, you will eat into your principal balance faster and pay off your mortgage in less time which is one of the more financially savvy things you can do. So, why pay to have that service implemented when you can do it yourself? It's about discipline folks. Quite frankly, discipline tends not to be a forte of the majority of us. That being said:
-Did you know that it takes almost 24 years just to pay off 50% of your home? In fact, most homeowners arent aware that it takes close to ten years to pay off the 7% real estate commission to sell their home. Conversely, it often takes almost 10 years to pay off closing costs alone. Add to this the consideration that the average family moves every 7.6 years, most Americans spend over half their lifetime paying just the closing costs and real estate commission. If it werent for inflation in this country, most homeowners would go bankrupt. Inflation is the primary factor in pushing real estate prices. NOT smart homeowners.
There are several ways to avoid this common mistake, especially if you have a strong interest rate in comparison to the market today. It is called a bi-weekly mortgage. Very simply by paying ½ your monthly payment every two weeks, you can pay off your 30 year loan in a little over 21 years. Since there are 52 weeks in a year, you make 26 payments, or 13 months worth, every year. This extra payment per year (that you didnt know about) will save you about $62,000 if you have a $100,000 loan at 8.5%.
Weve have merged with an entity to set up this Mortgage Reduction Plan at a special low price designed for former borrowers especially during the holidays. I should note that if you make one extra payment per year, you can get away with this doing this all on your own if you are disciplined and consistent in doing such. Bear in mind though that one extra payment per year usually comes during the holidays and most dont follow through with that or simply cant afford to do so. Consider the following questions:
Q.Will the Mortgage Reduction Plan work with any kind of mortgage? |
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A.The Mortgage Reduction Plan works with virtually any traditional mortgage Balloons or Buy-Downs, Fixed or Adjustable rates; and with any loan term or combination. Your lender, interest rate, and escrow, all remain the same. Its fast, simple, easy, and best of all, it works! |
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Q. Why do I need the Mortgage Reduction Plan if I can do this on my own? |
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A.While many people consider doing this themselves, few people have the financial self-discipline to accelerate a mortgage on their own. Think about it -- Do you have a Christmas or Vacation club? If you do, ask yourself, Why? According to Federal Government statistics, more than 95% of homeowners do not prepay their mortgages and of those that do, about 1% pay consistently. Our proven formula guarantees results. |
That is true, a 15 year term will save a ton of money in interest. However, most clients are afraid of the payment. There are also the instances where a client will qualify for the 15 year term payment on paper but the reality is that they can't afford it (i.e. daycare is not counted in your monthly debt but can cost up to $800 every month for one child). Bi weekly payments are a great way to help clients save a ton in interest while still being able to budget thier finances.
I think some people are never offered a 15 year mortgage by their loan rep. Not that they are misleading a client, but not educating them on their options.
It never ceases to amaze me at the number of people who get talking into paying a third party entity to divide their monthly mortgage payments by 2 and then mail in the payments for them. ;-)
Another and probably better way would be to simply add a little extra principal payment to your monthly one; you'll get your mortgage paid off even faster.
People that have no financial disciple are not very likely to bite on the "pay you to divide for them" principal either.
By committing to a bi-monthly payment plan your mortgage company automatically deducts the payments from your checking account for you, it is required. This ensures that the money arrives exactly when it is supposed to. We just love the simplicity of it!
I guess we could have divided our mortgage payment by 2 & sent in 2 payments ourselves, but they must arrive on specific dates & I think I'd make myself crazy every month trying to time 2 mortgage payments just right. The cost for setting up our 15-year bi-monthly payments was a one-time fee of $300.