Mortgage acceleration without extra payments?

The average American keeps their mortgage for a maximum of 5 - 7 years. The banks know this. As a result, 30 year loan amortization is structured so that the majority of what you will pay on a standard 30 year fixed rate loan will be interest for those first 7 years.

It is no secret that extra payments applied towards principle significantly reduces your mortgage debt. Bi weekly payment programs help but again, this is no secret. It is simply a method that reduces debt if we are disciplined enough to do it. Most people are not, or not capable of coming up with extra cash to accelerate their mortgage pay off.

What if you could get a 15 year amortization with a 30 year payment? Now that would be tremendously helpful, wouldn’t it? You can actually envision a day that you actually pay off the house! Seems impossible right now for most of us but that is exactly what is available through specially trained and certified professionals.

We all have checking accounts that pay us little or no interest yet they see the bulk of our income flow through them. In fact, most of our money is not working for us at all. Yet imagine if you were paid the same rate for this money as what you are paying for your mortgage? Now it’s getting interesting.

Here is how the program is structured:

If you are approved for the program you are provided with a combination mortgage - checking account that allows you to deposit your monthly cash flow at the same interest rate as your mortgage. This applies to any other liquid funds that are paying you less interest than your mortgage is charging. Many of us have CD’s or Bonds etc. If they are paying you less than your mortgage rate you can shift those assets into this account.

This has tremendous dual benefits when you do this. By depositing it into the acceleration account it does 2 things:

1) It reduces your mortgage principle and the amount of interest charged on that. Interest is compounded daily so mortgage interest is reduced because your monthly cash flow is sitting in the account and each day that any of it remains in the account you are paying less interest. This has a huge effect over the course of our lives because most of our cash flow remains in the account for 3+ weeks before the necessary monthly bill takes it. In turn, any cash you put into this account is in reality paying you the same interest rate as your mortgage. It results in a lower payment due at the beginning of the next month.

2) You continue making the same payment you started with and the extra is put towards the principle. This lowers the principle even further which continues to lower the payment due.

You do not make the reduced payment, you make the same payment as you started the loan with as though it is a standard 30 year fixed payment. This accelerates the loan and can cut the amortization in half.

Many of us have $20,000+ in credit card debt, auto loans, etc at interest rates higher than our mortgage so when we shift these debts into this program and continue the payments you have now but through the program, it drastically accelerates the mortgage amortization. It is not uncommon for a family with 1 - 2 car loans, 20K in credit card debt, and a nice house payment to restructure that for full pay off in 8 years. That’s a paid off house, cars, and no credit card debt in as little as 8 years! Without changing what you are spending now. It is only changing the way your mortgage and cash flow accounts (checking , savings, etc) interact and benefit each other.

This method of banking has been in practice in Australia and the UK for the past 20 years and as a result, the average home is paid off in 13 years in Australia! Now, it is becoming available here and over the next few years we will see this become a standard option for well trained mortgage professionals. Right now, it is pretty exclusive with only a couple of lenders nationwide that have established the program.

The key difference between this and any other self induced method of acceleration is that this is 100% flexible. Anything you put into the account can be pulled back out. This is ideal for stable, self employed borrowers who have up and down months. It provides great reserves for those months. This is not possible with a standard mortgage. Anything you pay towards principle can not be pulled back out.

Now here is a chance to check out what this could do for you personally. Below are 2 links, the first is a 5 minute presentation which further explains this. The 2nd is a simulator that allows you to enter your monthly income, expense, and mortgage data to determine if this program can help you. It will not require any sensitive info to use (no names, address, phone, or email).

5 minute movie presentation

Simulator

There are so few of us that are trained right now so I suggest calling me once you have done this and I will see if you can qualify. In short, to qualify you must have decent credit (660+), and a stable income. It is perfect for those who can afford their bills but want to get ahead faster than their current schedule predicts. It can be used for purchases as well. No investment properties. Principle residence and second homes only.

I can be reached at (949) 766 5054.

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