What Is A Mortgage and Why It Should Be Put To Death?
"He who increases his wealth by interest and usury, Gathers it for him who is gracious to the poor." – Proverbs 28:8
The Pledge Of A Slow And Painful Death!
To take on a mortgage is to take on a pledge of slow and painful death. In the word "mortgage", the "mort" – is from the Latin word for death and "gage" is from the sense of that word that means a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a death pledge. It was dead for two reasons, the property was forfeit or "dead" to the borrower if the loan wasn't repaid, and the pledge itself was dead if the loan was repaid.
Kill That Debt!
Amortization is the process and formula for paying something off. "Amortization" comes from the Latin mors, or "death." It literally means "kill off the debt." You do that by paying down the amount you owe on a loan (the principal). And with a mortgage this usually takes a very long time and most often it is never truly accomplished. One of the main reasons why is because of how the typical mortgage is calculated.
Unless you have a Home Equity Line of Credit, then your mortgage is a closed-end mortgage. That means the loan agreement does not allow a mortgagor (borrower) to borrow additional sums against the mortgaged asset or property, without paying off the current mortgage. It is also calculated using an average monthly balance.
While an open-ended mortgage (HELOC) is a mortgage in which the mortgagor (borrower) is allowed to re-borrow against principal that has been paid so far. These loans are calculated on an average daily balance.
There are four ways to pay off your mortgage faster:
- Simply add extra principle to your monthly payment each month. The best time to start this is when you first get a mortgage. Because banks front load the interest on your mortgage, the majority of your payment goes towards interest. It takes 21 years on average to break even between what is going to principle and what is going to interest.
- Make bi-weekly payments to your mortgage. Basically what this does is it forces you to make one extra payment per year towards your mortgage, reduces your overall balance and lowers the interest charge.
- Make your first mortgage a HELOC or what some call a 100% Offset Mortgage. This allows you to use your mortgage like it was a checking account. Everything you earn gets directly deposited in to your HELOC account. Everything you pay gets taken out. Paying into your mortgage lowers your average daily balance and thereby the amount of interest you are charged. Click [here] to learn more.
- Use an Equity Accelerator program also known as a Money Merge Account to pay off your existing mortgage in 1/3-1/2 the time. This option is typically the best option, providing you have equity in your home, you can secure a HELOC and you have some positive cashflow in your family budget. Click [here] to learn more.
After running numerous comparisons, I have come to the conclusion that the Money Merge Account is the best option for most homeowners. To find out if you qualify for a Money Merge Account, please contact me.
Read "A Letter From My Heart" about the Money Merge Account:
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." – James Madison