I will be posting excerpts on mortgage acceleration from my book REALTOR® for Life. You can watch and subscribe to the RE/MAX of Boulder podcast channel for behind the scenes content.
1. Create your own amortization schedule: to pay off the balance of a loan in the desired number of years on a $100,000 Loan at 6% you could pay the loan off according to the following schedule:
2. Bi-weekly mortgage payments program: The way that this program works is that when you make a payment every two weeks when you get a pay check, you put enough in so that it would be equivalent to making one extra payment a year. This program will usually pay off a 30-year mortgage about 7 years sooner. Some lenders offer a bi-weekly mortgage payment plan. You can call your lender to see if they offer a bi-weekly plan. Some lenders will offer the program for free. If your lender doesn’t offer a program, there are third-party companies that can set up a program for a fee.
3. One extra payment a year program: On a bi-weekly program it is about the same as making one extra payment a year. So what about just making that extra payment once a year? You can do that and accomplish about the same thing without having to pay for or set up a bi-weekly program.
4. Mortgage acceleration programs: United First Financial uses the first mortgage that is in place on a home, a home equity line of credit, and what is called money merge account software.This program utilizes a line of credit like a primary checking account. An important function of this line of credit is what is called an open-end interest calculation. By putting your monthly paycheck towards paying down the line of credit balance, it keeps the balance that interest is calculated on low. By keeping the balance lower, more of the monthly payment is attributed to principal rather than interest. The program helps you manage your money and tells you when would be the best time to make a lump sum payment toward your mortgage principal. These programs are expensive and there are claims that you can easily set up a similar system by yourself. You can find more information on this program here United First Financial
About Duane Duggan: Duane Duggan has been a REALTOR® for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: the Lifetime Achievement Award and the Circle of Legends Award. Living the life of a REALTOR and being immersed in real estate lead to the inception of his book, REALTOR® for Life.
To get in touch, email Duane at DuaneDuggan@BoulderCo.com or call 303-441-5611