Home Equity Line | Amortization Plan

Mortgage Amortization Schedule – Why it is Cleverly Set Up to Work Against You

I get this question all the time. If I have a good mortgage and pay bills on time, why should I even care about taking any further action with my mortgage?
Good question.

The way the bank charges you interest is sophisticated. You may not even realize you are paying more than you have to and this is not your fault.

Banks set up their system so that you end up spending more on your monthly mortgage repayment towards interest rather than principal in the early years. For example, if you have a $1,200 monthly repayment, it common to spend $1,100 in interest and $100 in principal.

You can go directly to bankrate.com and use their mortgage calculator to see how much you are paying in principal and interest each month.

However, did you know you can and have the right to change the situation in your favor each month?

You could end up spending $900 in interest and $300 to principal should you choose to with a little more applied towards your principal payment every other month.

Even an eagle-eye read-through of your bills and your mortgage statement each month will not catch this method.

There is a simple method that will allow you to allocate more of your mortgage principal to you mortgage balance rather than interest. The key is to use the mortgage acceleration method.

You set up a Home Equity Line Of Credit (HELOC) account and draw down just the right amount from your HELOC to pay off your mortgage. Once the mortgage balance is paid down to a certain limit the bank reallocates more of your monthly payment to principal rather than interest.

This may sound confusing but you can search Google on this and learn more about the mortgage acceleration programs

Staying on top of your mortgage finances can sometimes feel like a full-time job.

And most of us already have a lot to deal with. In times like this, it is easy to get tempted by promises to find quick fix solutions that will help you take control of your situation.

By: Neil Venketramen

Tags: Acceleration Method, Amortization, Eagle Eye, Equity Line Of Credit, Full Time Job, Good Question, Google, Home Equity Line, Home Equity Line Of Credit, Mortgage Acceleration, Mortgage Amortization Schedule, Mortgage Balance, Mortgage Calculator, Mortgage Finances, Mortgage Repayment, Mortgage Statement, Principal And Interest, Principal Payment, Search Google, Staying On Top
Posted in Real Estate · July 22nd, 2010 · Comments (0)

Florida Second Mortgages

If your home is currently on mortgage, you have been paying amortization for a couple of years, and find yourself low in cash at the moment, you may want to consider taking out a second mortgage.

Second mortgages used to be regarded as evidence that the borrower is suffering from financial hardship and that it was disgraceful. Because of this, lenders and banks came out with stringent guidelines and limited loan amounts that discouraged borrowers from getting a second mortgage. Today, however, it is already a widely accepted loan program and is easier to get. In fact, a wide selection of options for second mortgages in Florida is available to cater to different needs of homeowners.

First vs. second mortgage

How does a second mortgage work? Let us say you have an existing mortgage and you have been paying amortization for years now. If you are having difficulty in paying off your amortization, then you can apply for a second mortgage. You will get approval based on your credit standing. An appraisal on your property will be conducted and your second mortgage loan will be the difference between the equity on your property based on Loan to Value and the amount you owe it from your first mortgage.

Interest rates

Usually, the interest rate for your second mortgage is higher than your first mortgage, but it is possible to get a good deal because of the fierce competition in the mortgage market of Florida. In other cases, you can get an interest rate that is way below the prime lending rate. It is also possible to convert your equity or right of ownership into a line of credit allowing you to borrow against your property at anytime.

Types of second mortgages

There are usually three types of second mortgage you can choose from. There is the traditional mortgage, a home equity loan and a home equity line of credit where you are allowed to have an open-ended line of credit where you can draw money against it at anytime.

By: Ken Marlborough

Tags: Borrowers, Existing Mortgage, Financial Hardship, Home Equity Line, Home Equity Loan, Interest Rate, Mortgage Interest Rates, Traditional Mortgage
Posted in Finance · July 10th, 2008 · Comments (0)

Amortization Plan

Mortgage Amortization Schedule – Why it is Cleverly Set Up to Work Against You

Florida Second Mortgages

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