Mortgage Acceleration Scams, Fallacies, and Misconceptions, Part 1 of 13

When you made the decision to purchase your home, you undoubtedly made one of the most important decisions of your life.

So how would you like to make the decision to pay off your mortgage in a fraction of the time, and save tens of thousands of dollars in the process? You'll be surprised that this may just become the most valuable decision you'll ever make.

However, there are some vultures out there who seek to exploit your desire to pay off that mortgage fast. They employ a number of half-truths, myths, and misconceptions to lead you into their high-priced, scandalous schemes.

In this series of posts, I'm going to list a number of these misconceptions and red flags. By being aware of these, you'll be better able to avoid the scams, and make better decisions about who you choose to learn the art of mortgage acceleration from.

I'm also going to list these in a countdown fashion...from the least, to the most damaging:

#13 (Fallacy): Debt = Wealth

A lot of people seem to think that because they live in an expensive home, they're wealthy. I'm sure you know that's not necessarily the case. A large mortgage often brings large debt, which obviously doesn't mean wealth, even though that person lives in an expensive home. Americans have been living in a financial fantasy world for decades, and we now must be more careful not to become over extended.

Just over a week ago, I was listening to a radio interview of a woman who understood very well that debt doesn't necessarily equal wealth. She told us how some of her co-workers secured loans well beyond their means, just to look “wealthy.” To keep a long story short, some of those people who got into large debt to look wealthy, are now in financial difficulty.

How To Shorten Your Mortgage

Just a few days ago, someone asked , "How Can I Shorten The Years of My Mortgage?"

Indeed that is a good question, and I'll try to explain. I won't dive deep into all the details, but I'll give you a quick response.

So Why Do Mortgages Last So Long In The First Place?

First, we need to address two areas: principal and interest, and how much is applied to each.

I'm sure you're familiar with these, but let me re-establish something, so you know where I'm coming from: The most difficult problem we face in any loan is the principal balance—because the interest is charged on that balance.

Having said that, have you ever studied how your monthly payments are being allocated between principal and interest?

That is, what portion of your monthly payments go toward cutting down the principal, and how much goes toward the interest?

Though I don't know your exact situation, I can wager that if you're in the US, the overwhelming majority of each payment goes toward interest, NOT principal. Whether the interest rate is high or low, it's the principal that causes the problem.

A few weeks ago, one of my friends was furious to learn that, of each payment she was making, only about $50 was going toward lowering the principal.

She was lucky, because she now has a chance to do something about it. Many Americans never realize how serious this is, because it robs us of our retirement. Banks front-load our loans, charging the majority of the interest at the beginning. The result is: we pay for our mortgages decades longer than we otherwise should.

You see, the fact that most of each of your payments go toward interest in the beginning, rather than principal, the bank is forcing you to make payments for a long, long time--much longer than you should.

Remember, we've established that the real problem is the principal, not the interest. Of course, interest is a factor, however, we must remember that the high principal is causing the higher interest allocation...

... and because the interest is calculated on the outstanding principal...

...so goes the seemingly endless cycle of unnecessary mortgage payments, because the principal doesn't get reduced fast enough.

How To Shorten The Length Of Your Mortgage

So, regarding the question of how to shorten the number of years on your mortgage, a better question might be: "How do I apply more money toward lowering the principal?"

On thing's for sure: your bank isn't going to tell you any secrets, since their goal is maximize their profit on your loan.

It's important that you find a way to make sure that a greater portion of your monthly payments apply toward your principal—not your interest. And there certainly are ways to do that!

Proven, 6-Year Old System Has Already Shown Thousands How To Pay Off
Their Mortgage In An Average Of 8.5 Years...Saving Them An Average of
$21,000 A Year On Their Mortgages...Without An Increase In Your Monthly
Expenditures! Get Your Copy Of The Mortgage Acceleration Report Now!

The Secret To An Early Mortgage Payoff

This is the simplest thing ever. Pay more into principal as quickly as you can! Find ways to increase the amount you pay on our actual loan, and therefore reduce that very expensive interest!
There are a few things you could do on your own, however there are tools that can make it very simple, and allow you to monitor every move you make along the way!

Refinancing is not often the answer; and can actually cost you much more on your loan. Keep in mind, for various reasons, the average home loan is only on the books for about 5 years...or even less. Each time you refinance, additional expenses are added to your loan...costing you a lot of extra money! It seems that most people who refinance actually use it to dig their way out of large consumer debt! Not a good way to go!

We offer a free report to help teach you how to work smarter, not harder.
For our free report, visit us at: http://mortgageaccelerationreport.com/

"Why Do I End Up Paying Twice?"

That's what one of our subscribers asked us today: "During the length of my mortgage, why is it that I end up paying twice what my property is worth?"

To answer that question, I made the amortization table below.

Can you see what 's wrong? (Not with the table itself, but the table shows that something is wrong.)

Month	Balance	Payment	Inerest	Principal	New Balance
1	$ 250,000.00	$1663.00	$1458	$205.00	$249,795.00
60	$235,618.00	$1663.00	$1374	$289.00	$235,329.00
359	$3,298.00	$1663.00	$29.00	$1,635.00	$1,654.00

To find out what's wrong, see this page that I just created this evening. (There's an audio button on it, too. Sorry for the background noise.)

The Retirement Fund Hidden In Your Mortgage

Many homeowners create their largest retirement fund in the equity on their homes. We often do an inadequate job of planning for our retirement years, and instead, rely mostly on social security. The blame isn't all ours - it's partly the result of our society, and how we're taught to spend and borrow money.

It's logical to consider that if we could pay off our mortgage in a third of the time we expect, that we will have much more time to save for retirement. Imagine paying off your 30 year mortgage in 10 years or less, without changing your lifestyle during the process. So, rather than retire just barely making it, you will enjoy life in the way you are accustomed!

The concept that the Mortgage Acceleration Report reveals to you will make all of this crystal-clear.

What Most People Don't Know About Their Mortgage, Part 1

Just by knowing what I'm about to reveal to you, you'll be way ahead of most other home buyers. Even though I don't know your exact situation, what I'm about to tell you here is true, in the case of most home loans - especially in America.

Let's first remember that only a fraction of home buyers keep a mortgage for more than a few years before we refinance or sell! I believe the average mortgage is presently 5 years. And most of the interest paid to the banks is generated in those early years! So...you're getting really hammered in those first years! The "effective interest rate" you are paying is not necessarily the 6% that they might quote; the effective rate is somewhere between 6% and a whole lot more per year, depending on how many years you keep the loan. And for the average 5-year loan duration, the effective interest paid will then be significantly higher that the APR (annual percentage rate) initially calculated. (I mean...WAY higher, as you'll see in our future updates of the Mortgage Acceleration Report.)

New Podcast: How Do I Shorten The Years of My Mortgage?

Hello Everyone:

I just recorded a podcast that answers a question on of our subscribers asked: How do I shorten the years of my mortgage?

It's only about 5 minutes long.

You can download it by right-clicking on this mortgage acceleration link and going to "Save Target As."

By clicking on it, you'll be taken to the .mp3 page. You need a .mp3 playing software, like Quicktime, to play it.

Think Your Interest Is Calculated Monthly?

If you have a mortgage in the United States, there's one thing that might annoy you. In other parts of the world, such as Canada, the interest is calculated montly.

However, in the US, your interest is calculated daily.

"No, monthy. That's why it's called monthly interest."

That's what the banks want you to believe, and this is one of the things we try to dispell in our new Mortgage Acceleration Report.

The Retirement Fund Hidden In Your Mortgage

Dear Mortgagor:

Did you know that you already have equity in your home that can be unlocked, and used to help you pay off your mortgage faster...and...

...that by paying off your mortgage faster, you can have a much better retirement fund?

If you still have a significant portion of your mortgage to pay off, and you're concerned about your retirement, I think I've got an answer for you.

No, you don't have to earn a second paycheck or refinance your home (that's what the banks would have you do, but in the long run, refinancing can actually be devastating to you).

All you have to do is understand that, of each monthly mortgage payment you make, the overwhelming majority of that payment likely goes toward the interest, NOT the principal.

This is a key idea you'll hear us repeat over and over again. It makes all the difference in whether you'll be able to pay off you mortgage now...or much later.

Our Mortgage Acceleration Report goes into more detail.

Podcast Coming Soon

I just recorded an 8-minute podcast that I want you to have, but it's not quite as good as I want it to be, so I'll answer the question: "How do I shorten the years?" tommorow.

How To Shorten Your Mortgage

Just the other day, one of our Mortgage Acceleration Report subscribers asked a question: “How Can I Shorten The Years of My Mortgage?”

Indeed that is the key issue here, and that's what I intend to briefly explain to you here. I won't dive deep into all the details (the Mortgage Acceleration Report goes into more detail about this, and has just been updated).

Why Mortgages Last So Long In The First Place

To begin to see how you can dramatically shorten the years of your mortgage, we have to look at 2 things: principal and interest.

I'm sure you know what these 2 are, but let me re-establish something here so that you know where I'm coming from: As long as there's always a remaining balance on your owing of the principal, you'll always have payments to make, no matter how low the interest rate is.

Keep that in mind.

The real problem in a mortgage is the principal.

Having said that, have you ever asked yourself how your monthly payments are being allocated toward your principal and the interest?

That is, what portion of your monthly payments go toward cutting down the principal, and which portion goes toward the interest?

Though I don't know your exact situation, I can wager that if you're in the US, what happens is the overwhelming majority of each payment goes toward your interest, NOT your prinipal.

A few weeks ago, one of my friends told me that one of his friends was furious to learn that, of each payment he was making, only about $50 was going toward lowering the principal.

My buddy's friend was lucky. Most American mortgagors never find this out. That's how we're misled into paying for our mortgages decades longer than we otherwise might.

You see, by diverting most of each of your payments toward your interest, and mostly ignoring the principal, you're being forced to continue to make payments for a long, long time--much longer than you have to.

Remember, we've established that the real problem in a mortgage is the principal, not the interest. As long as there's a balance of owing on the principal, you'll always be making payments.

Because the interest is calculated on the principal, any payment that goes toward the interest, instead of the principal, ensures that there will always be principal remaining.

And because the interest is calculated on the principal...

...so goes the seemingly endless cycle of unnnecessary mortgage payments.

How To Shorten The Length Of Your Mortgage

So the question now is, how do I put more money toward lowering the principal?

Well, I'll tell you one thing: your bank won't want to make it easy for you, if they'll even allow it.

But there are ways to do that, and that's what The Mortgage Acceleration Report explores.

So, What Is Mortgage Acceleration?

"Oh, it's just where you have to make more money each month so you pay off your mortgage faster."

Actually, no.

In our use of the term mortgage acceleration we refer to a process whereby you pay off your 30-year mortgage in an average of 8.5 years, with no increse in monthly expenses.

I know that sounds hard to believe, but it's really quite understandable once you know the crucial difference between interest and principal.

"Principal is how much it costs. Interest is how much it goes up over time."

Yes, that's true, but what most people probably don't understand is how much of their monthly payments are being diverted into the interest, instead of mostly toward the principal.

Paying the interest before paying the principal is like treating a problem, instead of fixing the cure.

Our Mortgage Acceleration Report talks more about this.

Welcome To Our Blog

Welcome to our mortgage acceleration blog. With this blog, we'll answer your questions about the ins and outs of the mortgage industry, how they cheat you, and how you can turn the tables in your favor.