Eliminate Mortgages

The way to eliminate mortgages quickly and rather painlessly is not as difficult as most lenders would lead you to believe. Many homeowners eliminate mortgages in half the time of their neighbors, by paying only slightly more each time a payment is made. You may eliminate mortgages in 15 years, rather than 30, even if you original loan was established on a 30 year term.

How eliminate mortgages safely

When you eliminate mortgage payments through pre-payment, you would be well advised to follow a few simple steps to insure proper accounting. Lenders don't want you to eliminate mortgages ahead of schedule. Toward this end, they may apply excess payments to prepayment of interest, rather than principal. This little trick is designed to preserve the principal balance owed, and maintain full interest charges until the prepayment exceeds the total balance. See? Each time you make a payment, send a form letter explaining you require the excess payment (based on a 15 year schedule) to be applied to the principal balance. This way, if you miss a month, or choose to revert to the 30 year schedule to eliminate mortgages, you do not need lender permission or incur refinance charges.

The magic of compounding interest

To eliminate mortgages ahead of schedule also results in a corresponding reduction in interest owed on the total balance. To merely eliminate mortgages interest through prepayment does not reduce principal, and the full interest charge remains unaffected. In the later case, you would not be earning interest on the amount interest prepaid, and the lender would be merely holding your money interest free until it comes due in 30 years. The letter suggested is essential to insure you eliminate mortgages with rights of recourse preserved.