Debt Be Gone Today

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.

We ask the questions and yet we still dont take action primarily because we are bombarded with a whole lot of strategies and methods, we no longer know which one to take.

It’s not your fault, as you want to make the best decision since your home is your largest financial asset.

All of the mortgage payoff techniques can be broken down into two separate mortgage payoff strategies.

One: Mortgage Prepayment

The first strategy is called mortgage prepayment. You can do this by simply using your extra money to pay off your mortgage faster. The best way to do this is to remit extra mortgage payments by subtracting a minimal amount from your paycheck every month. You may also opt to do the biweekly prepayment program or contribute extra amounts if you have extra cash available.

You already know about these strategies. The key with the mortgage prepayment strategy is to make sure you have the extra cash to pay off your mortgage. With this strategy the key decision becomes whether you should use the extra money to pay off your mortgage faster or invest these savings in your 401(k) or save for your kids college education. This decision can become very confusing at times.

Two: Mortgage Acceleration

Mortgage acceleration basically uses the concept of leverage. It is considered a new technique in paying off mortgage debts as it has only been around for 10 years. Most people who have used this technique spent less, maintain their financial lifestyle, and are able to settle their mortgage accounts earlier.

Heres how you can use leverage for mortgage acceleration: Lets say you have two credit cards. One has an interest rate of 2%, the other 6%. How can you pay for both of these cards and save thousands of dollars at the same time?

You got that right. You would move money from the credit card that has a lower interest rate to the high interest rate card. By so doing, you get to save on interest for about 4%. In the next 10 to 12 years, you will be able to save up a significant sum in interest.

We can apply the same strategy with a credit card towards the mortgage. Let’s assume your mortgage is at 6% interest rate. We now go ahead and open up a home equity line of credit. We deposit our paycheck into the home equity line of credit at the beginning of the month and pay the bills at the end of the month. If you set this up correctly you can convert your home equity line of credit to a 2% interest.

When everything is set up, you will be free to borrow money from the home equity line of credit and use that money to pay off your mortgage debt.

In the end, you will be able to get 13 years off your mortgage balance and save more than $63,000 of interest if you follow this financial strategy.

The best part is, you never have to make significant lifestyle adjustments.