| Paying off your mortgage sounds like a statement | | | | And in no way will the bank tell you to forget about it. |
| from the Sopranos. It feels like you paying off the mob | | | | You are responsible to pay almost double in interest |
| every month to leave you alone and live with peace | | | | than what you borrowed over the life of your |
| of mind. | | | | mortgage. |
| But in this case, the mob is your bank. And why would | | | | Paying off mortgage is one of the safest financial |
| I make such a statement. | | | | investments you can make in yourself especially in |
| Obviously getting a home is one of the best financial | | | | these uncertain financial times. The reason is simple, |
| decisions you can make. And paying off mortgage | | | | irrespective of whether the market is going up or |
| could save you thousands of dollars in the long run. But | | | | down or inflation increases or decreases or the value |
| for some reason the banks have turned into mobsters. | | | | of the dollar drops, once your debt this fully paid off |
| They lend you the money to finance your home but | | | | you don't owe any more money and none of these |
| you'd end up spending almost double in what you | | | | economic changes will impact you. |
| borrow to pay off your home. | | | | Now the reason why most of us cannot pay off our |
| Let's say you bought a home for $200,000 at 6% | | | | mortgage is that the whole system is designed to |
| interest. If you've moved after five years and taken a | | | | work against us. Think about it. You have to pay |
| new mortgage for $200,000 you could end up | | | | mortgage interest for 30 years. So the banks have |
| spending close to $470,000 over the life of mortgage. | | | | set the mortgage amortization schedule to work |
| More than double than what you borrow to pay for | | | | against us. |
| your home. | | | | In the early years of monthly mortgage repayments |
| And when your home drops in value like now, and you | | | | are set heavily towards mortgage interest. Only after |
| plan to sell your home you may have to take a huge | | | | 10 years you make some headway in applying the |
| loss on your home. And what happens when you | | | | principal towards your mortgage. |
| have no option but to move because of your job or | | | | And what if you move to a new home in the first five |
| your family is growing and you need a bigger place. | | | | years? |
| Selling now could put you into serious financial trouble. | | | | The mortgage interest cycle starts all over again and |
| Not only will you suffer financial loss, but you still have | | | | you're back to square one. Your mortgage will take |
| to make the mortgage payments including the | | | | you 35 years to pay off instead of 30 years. |
| excessive mortgage interest payments on your new | | | | There are some smart accelerated techniques in |
| home. | | | | paying off mortgage. You could be paying extra |
| Most of us are unable to get hundred percent | | | | towards your mortgage each month or using |
| financing. So we may end up with 80% mortgage and | | | | accelerated biweekly mortgage program. Both these |
| figure out ways to borrow 20% as a second line of | | | | methods require you to spend more towards paying |
| credit or as a personal loan. So even though your first | | | | off your mortgage. |
| mortgage could be a fixed interest rate, the second | | | | There is great method call mortgage acceleration. This |
| mortgage is variable and as the market moves up and | | | | technique enables you to slash at least 13 years of the |
| down, you could end up spending even more money | | | | mortgage and save thousands all without changing |
| over the mortgage life. | | | | your lifestyle or spending more. |
| And guess to whom that money belongs to? | | | | |