Mortgage Accelerator: Paying Off Your Mortgage in Half the Time

by: IgorBuces
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Word Count: 488

With the present economical downturn we are experiencing, we find ourselves to ensure that we make the best use possible of the money we make. In order to do so, many of us need to shift the way we think about our finances and how we can change our financial habits to make optimal use of every dollar we make.

For example, most people are happy with having most of their money in a checking or saving account where they get little return. In this case, the bank is the one taking advantage of the use of your money.

Another typical example is the traditional mortgage. In a typical 30 year home mortgage, it's not until the 20 years and 2 months mark that we make the same amount toward our principal that we do toward the interest.

If we take into consideration that the average American stays in their home for 5 to 7 years, they hardly make a dent in the principal of their home mortgage. In other words, the structure of the mortgage greatly favors banks because almost all of your initial monthly payments go toward paying the interest portion.

For over 20 years, homeowners in Australia, the U.K. and Canada have used mortgage accelerator programs to pay off their mortgages in less than 15 years saving an average of $150,000 on their home mortgages. The good news is that this type of programs is now available to homeowners in the U.S.

A mortgage accelerator works by making sure that the bank's money works for you at all times. It works in four basic steps:

1. At the start of the month, you use a piece of software to find out the optimal amount to pay toward your first mortgage to ensure you are paying as little in interest as possible. You use an advance line of credit (HELOC) to pay for this mortgage payment. This operation decreases the debt in your first home mortgage and moves you further down the amortization schedule.

2. You deposit your income in the HELOC reducing the balance on the HELOC. By doing so, you have your money working against your debt in the HELOC.

3. You charge your daily expenses on one credit card to allow your money to sit in the HELOC for as long as possible.

4. At the end of the month, you pay the credit card off before incurring any interest charges from the credit card company.

By doing a few changes in your financial habits, you can start making the bank's money work for you and no the other way around. Using other people's money (the bank's money) is one of the surest and fastest ways to become financially independent.

Although it make take a while to get use to the changes, you can think of the other alternative; After all, how much effort and time would it take you to make the money you would save if you could pay off your home mortgage in 10 years?

About the Author

To learn more about how you can apply a mortgage accelerator program to pay off your home in 10 to 15 years and save an average of $150,000 go to our mortgage accelerator site where you can find articles on how a mortgage accelerator works.  

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