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 instances, most of us are ok with keeping most of our money in a savings or checking account where we get a very small return. In this example, the banks are the ones is using our money to make themselves richer.
Another clear example is a home mortgage. In a regular 30 year mortgage, it's not until the 20 years and 2 months mark that the principal portion of the payment equals the interest portion.
Since most American only lives in their homes between 5 and 7 years, we barely decrease the principal in our mortgage. This is so because the way the mortgage is structured heavily favors the banks since at the beginning most of the money goes to pay 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 without having to make any additional payments toward the mortgage. It works in the following way:
1. At the beginning of each month, a software tells you the right amount to pay toward your first mortgage to make sure you are paying as little interest as possible. The funds for this payment come from an advance line of credit (HELOC.) By doing so, the debt in your mortgage is reduced an you move 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 all of your daily expenses on a credit card to allow money to sit in the HELOC for as long as possible.
4. At the end of the month, you pay off the credit card before creating any interest charges from your credit card.
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.
Even though it takes some getting us to these changes, you can think about the alternative available to you; After all, how long and how much effort would it take you to earn the money you would be saving if you knew you could pay off your home mortgage in 10 to 15 years?
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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 read information on how a mortgage accelerator works.
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