How To Pay Off Your Mortgage For And Live A Debt Free Lifestyle 238

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Written by Dennis Tejero

Friday, 26 June 2009 04:49

by DennisTejero

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.

And you cant blame yourself. Your home is your biggest financial asset and so it is only safe that you ask the right questions first.

Mortgage pay off techniques can actually be summarized into two specific strategies.

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.

When you choose to employ the mortgage prepayment strategy, you have to set aside a certain amount for extra mortgage contribution every month. You will have to decide whether you should pay off your mortgage, or invest your savings in your 401(k), or just save your extra money for your kids college education. Making the right decision could be confusing.

Two: Mortgage Acceleration

This strategy of mortgage acceleration is fairly new and his been around for the last 10 years only. This strategy uses the concept of leverage to pay off your mortgage faster. In some cases you can end up paying off your mortgage without spending more and changing your lifestyle.

The way leverages applied with mortgage acceleration is really very simple. Let's assume for a second you had two credit cards. One credit card had an interest rate of 2% and the other has an interest rate of 6%. Now what would be the fastest way to pay off both these credit cards and save thousands of dollars in the process?

You guessed right. You would borrow money from the 2% credit card and pay off the 6% credit card. Simply doing this could save you 4% in interest. Over a period of 10 to 12 years this could mean a significant amount of interest savings.

This technique can also be used when you want to pay off your mortgage faster. If your mortgage has an interest rate of 6%, you can simply open a home equity line of credit, pay off your bills at the end of each month with the paycheck that you deposit at the beginning of the month. If you are able to set up everything accurately, you will be able to convert your home equity credit line interest to 2%.

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.

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.

Information:

If you've enjoyed all the exciting information you read here about How To Pay Off Mortgage,you'll love everything else you find at How To Pay Off Mortgage Strategy Guides

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Last Updated on Tuesday, 04 August 2009 15:51