Christian Debt Recovery

Accelerated Debt Payoff Plan

October 21st, 2007 |

Author: Gavin

How to Pay Off Your Mortgage with Interest Cancellation methods

4 Things about Interest Cancellation you Should Know

Interest cancellation has become a rising topic of interest (pardon the pun) over the recent years, especially in light of more restrictive loan

criteria from lenders. Homeowners are looking at ways to reduce their mortgage liability, increase equity, and accelerate payoff of their

mortgage obligations without re-financing and without straining or changing the daily, weekly and monthly budget of the homeowner. The

principles that I present here are intended to give you a glimpse of how you can implement these strategies for yourself and potentially cut the

time remaining on your existing mortgage in half or greater, as well as having ability to use these principles on all the debt that you may carry.

1. Prepayment of principal

I think it goes without saying that paying additional money to the principal amount borrowed would naturally payoff a loan sooner. I believe most

people see this as a double-edged sword – kind of an approach-avoidance technique that they know works but with most people, they like to

keep the security blanket of the extra cash available “just in case” and consequently the idea and the eventual act of prepayment gets shelved in

favor of the “greed” of the day!

2. Isolating lump sums of principal

Isolating lump sums of principal goes along with the prepayment idea, only on a grander scale. Paying down a lump sum, maybe hundreds, if

not thousands of dollars at a time would have a dramatic effect on the overall duration of the timeline of the given loan. Here again, I think

people find it hard to part with the cozy feeling of having that money available rather than giving it to the bank or the lender and not having that

“nest egg” to fall back on. In the times that we live in, it is reasonable to assume that many of us would definitely like the security of money in

the bank, so with that said, we must look at budgeting and the other factors that we can consider to protect our cash flow and liquidity.

3. Using leverage

Using leverage brings us to an interesting concept in dealing with our fears of security and cash flow. As strange as it may sound or appear,

leverage is actually a way to use other people’s money to accelerate the interest cancellation of your loan. There is nothing new about this

concept – it is actually a form of arbitrage, whereby one market is used to leverage against another. By definition, it is the simultaneous purchase

and sale of what would typically be considered an asset, but in this case it would be the acquisition of a debt in order to accelerate the payoff or

interest cancellation of another. Basically, what is required here are 2 different types of loans – one being a long term, amortized loan and

another short term open-ended loan. On the surface, this appears to be a risky proposition, however, if managed correctly, is one of the strongest

methods of reducing debt ever devised.

4. Maintaining liquidity

Maintaining liquidity is the tricky part to the equation and why it is necessary when applying the principles that I’ve discussed, to study and

understand exactly how to maintain the proper balance between the use of leverage in prepaying principal on your loans before blindly

borrowing from “Peter to pay Paul” so to speak. The caution here is not to overburden your personal finances so that your plans of accelerating

your loan payoff “backfires” on you and you’re left with more loan debt not less. Here’s where the computer is a tremendous ally in working these

numbers for you. With a little study and diligence, you can easily eliminate chunks of debt and cancel huge amounts of interest that the bank

would normally be charging you should you simply pay them back at their required rate.

Paul Hanson is President and Broker of Axcess Real Estate Services in Thousand Oaks, California. In addition to his real estate activities, Paul is

also a mortgage broker and has constantly sought programs to benefit his clients with cost-cutting measures designed to help his clients realize

more equity and leverage their ability to maximize their income dollars. Through years of study and research, Paul has come to use and

recommend a program that accomplishes above-average results for himself and his clients that can be found at:

http://www.StretchTheBuck.com

About the Author

Copyright 2010 – Paul K. Hanson –
http://www.StretchTheBuck.com.
Paul Hanson is a real estate and mortgage broker who has been instrumental in adopting and implementing money-saving ideas for his clients for many years in the greater Los Angeles market. Paul lives with his family in Ventura county

where he has resided for the past 35 years. In addition to his real estate and mortgage experience, Paul has also had prior experience as a stock broker and registered representative which makes him uniquely qualified to assist the typical business and homeowner with thier mortgage and money-saving concerns.

His website is
http://www.StretchTheBuck.com