4 Plans To Become Debt Free Quicker
You biggest loan is probably your mortgage. Right? Most of us have a 30 year mortgage. What if you could afford to pay it off faster? I think many families can accomplish this with some proper planning.
Did you know that on a typical 30 year home mortgage loan you will pay more in interest payments than you even borrowed in the first place? That's right! On a normal 30 year loan of $300,000 for example, you will pay back over $600,000 in total, including principal and interest.
If that does not convince you that part of a sound financial plan should include a system to eliminate your mortgage faster, I don't know what will.
I'd like to show you 4 effective ways to make that happen.
Plan #1) Refinance your loan. You can refinance to a lower rate or even to a shorter term, if you can afford the bigger payment.
As an example, a 15 or 20 year mortgage can usually get you a lower interest rate and many times the payment will not be too much more each month.
Plan #2) Institute a Monthly Principal Reduction Plan. What I mean here is that you can send extra money each month, in addition to your regular principal and interest payment and instruct your bank to apply it to the principal loan amount to reduce the pay off amount.
This amount can be $100 or $1,000 or more. You'd be surprised. Every little bit you send to reduce the loan, will reduce the amount you have to give to the bank in interest by a lot.
Plan #3) Set Up A Bi-Weekly Payment Plan. If your mortgage company can't do this, there our banks that will arrange to do it for a small fee, simply do an internet search.
This plan simply means that you divide your monthly payment by 2 and pay that amount every 2 weeks. So, instead of making one payment each month, you are making 2, but in half the amount.
If you add it up, you will end up making one full additional monthly payment at the end of the year. This will reduce the number of years it will take to pay off your loan and the total pay off amount in a big way.
Plan #4) Use A Software Program Married With A Home Equity Line to quickly chip away at that loan. There are several of them out there. This is a strategy that is becoming very popular in America and has been used in Australia and Europe for years.
All of the plans listed above can help you to effectively pay off your debt much faster. I personally recommend Plan #4. Home owners can be mortgage free in 1/3rd the time in many cases and not even change their monthly spending.
That means that a 30 year mortgage can be paid off in 10 years in many cases. This is huge, especially considering the 100s of thousands of dollars saved in interest.
I think this method of eliminating debt and reducing interest paid out to the banks and mortgage companies is so important to a family's financial plan that I dedicated a whole chapter to it in my best-selling book 3 Secrets Of Millionaires.
Don't wait for 30 years to pay off your mortgage. Keep that money for your family, instead of making the banks rich.
Mike Koller is an entrepreneur and author with over 27 years of experience in his field. He has sold over 200,000 books teaching people how to get rich in the comfort of their homes
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