Debt

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 

PART THREE – Pay One Extra Payment Each Year

PART FOUR – Eliminate one non-essential monthly expense and put it towards the mortgage 
How much do you spend on non-essential monthly expenses? One example is cable/satellite. Let’s say that it’s $70/month ($840/year). If you’re really interested in getting rid of your mortgage quicker, cancel the cable and use that money towards the mortgage payment. Yes, this does require some sacrifice BUT just think about the end goal –> no mortgage payment! That should get you fired up!

Other items that could be reduced/eliminated include:

• Dining Out
• Clothing
• Spending money
• Grocery bill (use coupons!)
• Insurance premiums

Less payments toward these items mean more money for payments toward mortgage elimination!!

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 

PART THREE – Pay One Extra Payment Each Year
One of the most common ways that people get rid of their mortgage is by sending in one extra payment each year. This will eliminate 5 to 7 years from a 30-year fixed rate mortgage.

You can send one extra payment each year using a variety of methods:

• Send in one extra payment when you receive a tax refund or profitability bonus
  • Since this money is extra and not part of the normal budget, it’s easier to put this money immediately towards the mortgage.
• Set up 1/2 payments to be made every two weeks
  • Since there are 26 two-week periods in a year, this means that 13 full payments will be made each year. Presto! An extra payment!
• Send in 1/12 (8.3%) extra on each monthly payment.
  • 1/12th payment/month X 12 months = 1 full payment per year

You can run the numbers for your specific mortgage by using the Early Pay-Off Calculator. This is a great tool to discover how much sooner you could be debt-free by making extra payments each month.

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 
Interested in eliminating 7 years or MORE from your 30-year fixed rate mortgage? Just add an extra 10% to your monthly payment! For instance, if your mortgage payment (including escrowed taxes and insurance) is $1,000, you would send in an extra $100 per month – $1,100/month.

Example – Let’s say you have a $150,000 – 5.5% fixed-rate mortgage with a monthly payment (include escrow) of $1,000 with $852 being applied to principal and interest each month (the other $148 being applied to taxes and insurance). If you send in $1,100 each month (extra 10%), there is now $952/month being applied to principal and interest. This will reduce a 30-year note to a 23 year 4 month note!

You can run the numbers for your specific mortgage by using the Early Pay-Off Calculator. This is a great tool to discover how much sooner you could be debt-free by making extra payments each month.

I’ll never forget the day that I signed my first home mortgage. I financed such a large amount of money that I couldn’t really comprehend the amount. That day I only knew two things: I wanted to purchase a house and the bank was willing to lend me the money. It wasn’t until after I made my first mortgage payment that I realized just how much this debt was going to cost me. As I begin to discover the enormity of this debt, I set out to find ways to eliminate my mortgage quickly so that more of my money would be applied to the principle balance instead of the interest.

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate
One key way to quickly getting rid of the mortgage is to have an excellent mortgage interest rate. Current mortgage rates are still near an all time low. CNNMoney’s has an excellent online calculator that can be used to evaluate different refinancing alternatives to see which one is best for your situation. It can be obtained HERE.

Just lowering the interest rate by 1% on a $100,000 mortgage will save nearly $1,000/year! That, my friends, will spend just like money and I would much rather apply that money toward principal reduction or funding a dream than sending it as a gift to my mortgage lender!

Another great tool is the Early Pay-Off Calculator located on our website under the Tools tab. This tool will show you how much more quickly you can pay off your loan if you obtain a lower interest rate.

This can seem very basic, but it is easy to get caught up in the day-t0-day bustle of life and miss one of the key ways to eliminate the mortgage more swiftly!

Many people look at 0% Balance Transfer Credit Card offers and wonder, “what’s the catch?” So let’s dive into this question.

QUESTION: Is the interest rate really 0%? 
The answer is, “YES!” Many of these offers do, however, have a small transfer fee – usually around 3%. 

Let’s use an example to see how this works.

Suppose you transfer a balance of $5,000 from a card that has a 21.99% interest rate. You apply for a 0% balance transfer credit card. This offer comes with a 3% balance transfer fee, but it also provides 0% for 18 months.

Upon acceptance of your application, the 3% balance transfer fee ($150) will be applied to your balance on the new credit account making your total balance owed equal $5,150 ($5,000 balance that was transferred PLUS the $150 balance transfer fee).

Now comes the good part! You now owe 0% interest for the 18 month period – as long as you make all of your payments on time, of course. Let’s see how this plays out while making $200/month payments – 21.99% credit card vs 0% balance credit card.

The I Was Broke. Now I’m Not. Team keeps a running list of 0% Balance Transfer offers HERE.

0% Balance Transfer credit card offers

Just by making one decision that takes less than 15 minutes, you can make a HUGE difference with your finances!