Imagine paying your mortgage off in 15 years! Think of all
the great things you could do with that extra money. What
would you do? Retire early? Buy an R.V.? Travel around
the world? If you could eliminate your mortgage in half the
time, then your options would be wide open.

Let’s take a look at 3 benefits and 3 considerations when
evaluating whether or not the 15 year fixed rate mortgage,
is right for you:

1. Lower Interest Rate
2. Huge Savings on Interest Paid
3. Mortgage Paid in 15 Years
4. Affordability
5. Expendable Income
6. The 15 Year Loan as an Investment

1. Lower Interest Rate:

The 15 year amortized fixed rate loan carries a lower
interest rate.

The interest rate is usually about ½ % the rate of a 30 year
term.

For example, as of today’s date, the average 30 year fixed
is going for about 5.67%, while the average 15 year fixed is
going for about 5.10%.

That’s a savings of .57%!

2. Huge savings on Interest Paid:

Do you want to save a ton of money? A 15 year fixed will
accomplish this for you.

Let’s look at a $300,000 loan. Over the course of 30 years,
at 6% interest, you will pay the bank $347,514 in interest.
(Yes that’s right. You’re paying the bank 115% of the loan
value, over the course of 30 years).

However, with a 15 year fixed rate loan, at 5.5%, you will
only pay $141,225 in interest (Wholly smoke! That’s a
savings of $206,289!).

What would YOU do with $206,289?

3. Mortgage Paid in 15 years:

Because the loan is amortized for 15 years, instead of 30
years, your commitment to the bank is cut in half.

This is an enormous advantage. After 15 years, money
normally applied to a house payment can be applied to
investments.

Or, you can begin considering alternative careers,
retirement, or home improvements.

Or you can just spend that extra money on fun stuff and
goodies.

Any way you look at it, cutting your commitment down to 15
years affords you many more options in life.

So we’ve established that a 15 year loan clearly has some
amazing benefits. But, is the 15 year loan right for you?
Let’s take a look at some important considerations:

4. Affordability:

Even though the 15 year fixed rate loan enjoys a ½% savings
in interest, there is still the question of affordability.

For example, a $300,000 mortgage, amortized over 30 years at
6%, equates to a monthly house payment of $1798.

But the same loan amortized over 15 years at 5.5%, equates
to a monthly house payment of $2,451.

That’s an extra $653 per month, or a payment that’s 36%
higher than a 30 year fixed.

Can you afford the long-term commitment of a 15 year fixed
rate loan?

5. Expendable Income

The 15 year fixed rate loan is an important consideration if
you have extra income and you are looking to apply it
somewhere. Ask these important questions:

Are all your bills getting paid?

Do you have low debt?

Are you spending too much each month on luxuries?

Are you spending too little each month on productive
investments and savings?

If money’s got you down, and things are tight, and if there
are other financial areas for you to explore first (such as
paying off credit cards), then perhaps the 15 year loan may
not be right for you, at least not right now.

Start by completing a budget analysis, and figure out a plan
to get you from point A to point B.

6. The 15 Year Loan As An Investment:

This is really, the most important consideration. A 15 year
fixed rate loan is more of an investment then anything else.

The financial benefits of a 15 year fixed rate RIVALS the
benefits of a 401k, Roth IRA, and Mutual Fund performance.

You need to compare the money saved (in our example, that’s
$206,289) to the performance of your other investments in
your portfolio. Remember to calculate in the extra money
you are paying for the 15 year loan (in our example, that’s
$653 per month), so that you can determine a net profit.

If you are exploring ways to build wealth, and apply your
money in a productive way, then you need to seriously sit
down, and figure out how to get a 15 year loan incorporated
into your plan.

Remember, money saved, is money earned!

We’ve enjoyed providing this information to you, and we wish
you the best of luck in your pursuits. Remember to always
seek out good advice from those you trust, and never turn
your back on your own common sense.

————————————————
Copyright 2004, by href="http://www.loanresources.net">LoanResources.Net
Tom Levine provides a solid, common sense approach to
solving problems and answering questions relating to
consumer loan products. His website seeks to provide free
online resources for the consumer, including rate-watch,
tips and articles, financial communication, news, and links
to products and services. You can check out Tom’s website
here: href="http://www.loanresources.net">http://loanresources.net
, or you can email Tom at href="mailto:info@loanresources.net">info@loanresources.net<
/a> .

Wanna know a little secret? There is an ingenious method
you can use, to pay off your 30 year fixed rate loan, in 23
years or less. It’s straightforward, simple, and easy to
understand. In this article, we’re going to explore this
little known secret, and we’ll provide several examples of
how it works, a few methods on how to implement, along with
some information on where to go and how to get started.

1. Accelerated Payments:

By accelerating the payment structure on your loan, the life
of the loan is reduced:

In a normal 30 year fixed rate loan situation, your monthly
payment is applied towards principle and interest. It is
amortized over the course of 30 years.

So any money above and beyond your normal payment is applied
solely towards the principle of the loan.

By reducing the principle of the loan, you are reducing the
total amount of interest that must be paid, and that equates
to an early loan payoff.

2. An Illustration:

You bake a cake (principle), and put it in the oven. Once
the cake is out of the oven, you’ll need to frost it with
icing (interest). Let’s say your cake is 12 inches in
diameter, and let’s say you need 3 jars of icing.

But you’re hungry, so you eat half the cake early. Now,
the cake is only 6 inches in diameter. Because of this, you
only need 1 jar of icing.

By reducing the cake (principle), you’ve reduced how much
icing (interest) you need.

Furthermore, it takes less time to frost 1 jar of icing.

So, by paying a little more in principle, you reduce the
interest owed. That reduces the life of the loan.

3. Methods:

Think of it this way: All you have to do is make 1 extra
monthly house payment a year. Do that and you reduce the
life of your fixed rate loan by about 7 years! You can be
as creative as you want to accomplish this, but here are 3
known methods:

Bi-Weekly Payments: Normally, you make your house payment
once a month, or 12 times a year. But with a Bi-Weekly
payment structure, you take your normal house payment, and
divide it by two. This is the amount paid every two weeks,
instead of once a month. By doing this, you basically make
1 extra (monthly) payment a year.

Double Payments: Double Payments simply means an extra
house payment. Once a year, you write out a check for twice
the amount. So, if your house payment is normally $1,000 a
month, then on December 1st, for example, you’d write out a
check for $2,000. This, in essence, accomplishes the same
thing that Bi-Weekly Payments accomplish. You make 1 extra
payment a year.

1/12 increase in payment: Increase your monthly mortgage
payment by 1/12, and you accomplish the same thing. Let’s
say your house payment is normally $1000. 1/12 of your
house payment is $83. So, you start making payments for
$1,083. Guess what? Your loan is paid off in about 23
years instead of 30.

Sidenote: A “Bi-Monthly” payment is not necessarily the
same thing as a Bi-Weekly payment. It may just mean that
you are paying ½ your monthly payment on the 15th and ½ is
paid on the 30th. The key is this: Are you paying a little
more each year, such as 1 extra house payment? If you are,
then early payoff is your ripe reward!

4. Here’s an Example:

Bob has a $300,000 loan at 7% interest, and his monthly
mortgage payment is currently $1995.91. Each year, Bob
pays $23,950.92.

Bob calls his lender, and his payment schedule is
restructured as a bi-weekly payment. Every two weeks, Bob
writes a check out for $997.96. Because of the two extra
payments this year, Bob will have paid $25,946.83. His loan
is reduced by about 7 years.

Or, on December 1st, Bob writes out a check for $3,991.82.
Because of this 1 extra payment, Bob will have paid
$25,946.83. His loan is reduced by about 7 years.

Or, Bob pulls out his calculator, and adds 1/12 to his
monthly payments, which equates to $166.33. Bob now writes
out a check each month for $2,162.24. At the end of the
year, Bob will have paid $25,946.83, and his loan is reduced
by about 7 years.

5. The Next Step:

How disciplined are you? Because, if you’re not disciplined
at all (like myself), then what are the chances of you
sticking with the program? Call your lender, and set up the
bi-weekly payment. This way, you are totally hands off and
it will all become automatic and habitual. You can always
change it back if times get rough, but at least there’s no
temptation to revert back to cheaper payment.

Or, do you have online bill-pay with automatic payments? If
so, go into your bank online, and add 1/12 to your monthly
payment.

Can you afford to accelerate your payments even further?
Adding 2 extra monthly payments a year, for example, reduces
your loan by about 10 years. Of course, now it might be
time to consider examining a new secret strategy, the 15
year fixed-rate loan!

We’ve enjoyed providing this information to you, and we wish
you the best of luck in your pursuits. Remember to always
seek out good advice from those you trust, and never turn
your back on your own common sense.

—————————————————-
Copyright 2004, by
LoanResources.Net
Tom Levine provides a solid, common sense approach to
solving problems and answering questions relating to
consumer loan products. His website seeks to provide free
online resources for the consumer, including rate-watch,
tips and articles, financial communication, news, and links
to products and services. You can check out Tom’s website
here:
http://loanresources.net , or you can email Tom at
info@loanresources.net .

No, this is not some futures or commodities trading
strategy. You don’t have to join a cult or an MLM. And you
can do this for years.

The only qualification is that you have a mortgage or home
equity loan.

You can achieve more than 100% returns on your money simply
by paying extra money on your mortgage each month or as
often as you like.

Here’s how it works: If you have a 30 year mortgage at 7%,
for each $100 of your loan amount you will end up paying as
much as $209 in interest. So within the 30 years of paying
off your mortgage, you will repay that $100 that you
borrowed PLUS you will pay up to an additional $209 in
interest.

So if you “invest” an extra $100 along with your first
mortgage payment, you will end up saving $209.42. That’s a
return on your “investment” of 109%! And it’s guaranteed.

Plus you have just lowered the amount you are in debt and
reduced the time it will take for you to pay off your
mortgage. How many cold-calling investment brokers can
offer you a deal like that?

So you could look at it as investing the $100 in your
mortgage means that there is $309.42 you won’t have to pay
out in the future. You could even argue that this is a
return of 209%.

But what if you are several years into your mortgage. Well,
even if you are 10 years into your mortgage (and the average
mortgage only lasts about 7 years these days), you can still
save $139.42 in interest by paying an extra $100. Or if you
are 20 years into your mortgage you will still save $69.42
by paying an extra $100.

So what have you got to lose but your mortgage debt?

So why don’t more people do this?

Probably because the conventional “wisdom” says that if you
can earn a better rate with an investment than what you are
paying on your mortgage you should invest instead. If you
are paying 7% on your mortgage and you can earn 11% in the
stock market, it seems a no-brainer that you should invest
in the stock market.

There are two problems with this philosophy: first, the 11%
stock market figure that is widely quoted is an average over
the past 30 years. Returns in the stock market have
averaged on a yearly basis both higher and lower than the
11% rate. How do you know when you are investing in a year
with negative returns? Unless you are in the financial
industry you are probably taking as big a gamble as you
would in Las Vegas playing the Roulette Wheel.

The other problem is that both inflation and taxes will eat
away at your 11% return. Taxes can eat up to 2% of it and
inflation can take another 3%, leaving you with only 6%,
which is less than your mortgage. And that’s assuming you
actually get the 11% return that year. Also remember that
years in which high returns in stocks are enjoyed are also
often accompanied by higher than normal inflation rates.

But some people will not be persuaded and will insist on
investing in the stock market before paying off their
mortgage and that is understandable. We all want to build
some sort of retirement nest egg or have an emergency fund
that is growing by more than the dismal rates offered by
bank savings accounts or money market accounts.

But if paying down your mortgage makes sense at 7%, how much
more sense does paying down your higher interest rate debts.
If you have a credit card charging you as much as 24%, it
makes way more sense to pay this off before investing any
money in the stock market.

Some people would argue that it is good to invest always
even if you have debt. But that is contrary to the overall
goal of increasing your assets and wealth. For example,
let’s say you owe $1058 on a 24% credit card and you have an
extra $100 each month. You decide to make your minimum
payments while investing the rest into the stock market.

If your stock market investment gives you a 12% rate of
return you will have about $996 at the end of the year ($100
- min pmt x 12 months + “interest”). But you will still owe
$1079 (more than you started with) on your credit card.

Viewed another way; you paid a total of $1200. Adding
together the negative credit card balance and the positive
investment value gives you have a net value of $-83.

Instead, if you use the full $100 to pay off your debt, you
will be debt free at the end of the year. You won’t have an
investment but overall you will not still be negative. The
next year, you could invest the full $100 into the stock
market. But if you still had your debt, you could only
invest $78.50 while still making your minimum credit card
payment ($100 – min pmt: $21.50 = $78.50).

Now if you take this scenario and play it out over 5, 10, 15
even 20 years you can see how paying your debts off now can
save you $1000s in interest and help you pay off your debts
sooner. Once your debts are paid off you can use ALL of the
extra money to invest.

Numerically it is much better to pay off your debts first.
But since your stockbroker makes his money off your
investing what do you think his advice will be?

————————————
David Berky is president of Simple Joe, Inc. makers of the
popular Debt Eraser PC software, which helps people create a
rapid debt reduction plan to get themselves out of debt much
sooner and save $1000s in interest payments. Visit href="http://www.simplejoe.com/debteraser/index.htm">
http://www.simplejoe.com/debteraser/ for more information.

How much do YOU owe on your credit cards?

The average American family is now over $7000 in debt just
on their credit cards. That debt generates an interest
charge of over $105 each month if your card charges the
average 18%. If you have missed a payment or made a late
payment (even by one day!), you may be paying up to 27%
interest or over $157 each month.

Most credit card companies require a modest payment towards
the card balance. Modest meaning from $10 to $20 a month.
To pay off a $7000 debt at $20 a month you will not pay off
this debt for 29 years.

And what about those interest charges? Paying off a $7000
credit card debt charging an interest rate of 18% and paying
$20 a month towards the debt, you will pay over $18,400,
more than TWICE the original debt, just in interest.

What if you have more than one card? What if your debt is
over $7000? What can you do? How can you get out of this
hole?

There are some techniques that can help you pay off your
debt and do not require expensive loans, invasive credit
checks, or expensive financial planners and accountants.
You can also save on interest charges by paying off your
debts in a certain order.

The most effective technique is sometimes called the
“snowball” method. The snowball method suggests that when
you pay off one debt you apply that payment amount to the
next debt. Thus the amount you pay on a debt grows like a
snowball rolling down a hill.

For example, you have three credit cards with debts of
$5000, $4000, and $3000 which are charging you 18%, 27%, and
12%, respectively, and you are paying $150, $125 and $100
each month. By paying these required monthly amounts you
will pay off your $3000 credit card first.

Now that the $3000 card is paid off you have an extra $100 a
month. Put that extra $100 toward paying off your next
credit card debt. Now you are paying $225 a month on the
$4000 card and the $150 on the $5000 card. With this
accelerated payment on the $4000 card you will pay off the
card earlier and save some money on interest charges.

Then apply the $225 payment to the $5000 card for a monthly
payment total of $375. Soon this card will be paid off and
you will have $375 extra each month to pay off other debts
or better yet, INVEST!

So, which debts should get paid off first?

Generally, you want to pay off the debts that are charging
you the highest interest rates first. In the above example
you could have added the $100 payment to the $5000 credit
card rather than the $4000 credit card. But the $4000
credit card is charging you 27% where the $5000 credit card
is charging 18%. By paying off the card charging the higher
interest rate first, you will save some money on interest
charges.

If this sounds too confusing, you can enlist your computer.
You can search the Internet for the keywords “debt reduction
calculator” or you can visit href="http://www.simplejoe.com/debteraser/index2.htm">http:/
/www.simplejoe.com/debteraser/index2.htm and review a
product named Simple Joe’s Debt Eraser.

Simple Joe’s Debt Eraser helps you create a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan that is customized to your debts and
your situation. Just enter your debts and the amount you
can afford to pay each month. The software will create a
plan telling you how much to pay towards each debt each
month until they are all paid off.

You CAN pay off your debts. The trick is to stop charging
purchases to your credit cards and develop a debt reduction
plan. Your plan should include “snowballing” your payments
and prioritizing the debts by high interest rate.

************************************************************
© Simple Joe, Inc.
David Berky is president of Simple Joe,
Inc. which sells the Simple Joe’s Debt Eraser PC software.
Debt Eraser can help anyone get out of debt quickly and
inexpensively by creating a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan.

The method is simple. 1) Set a monthly amount. 2) Pay all
minimum amounts. 3) Pay extra money toward the debt with
the highest interest rate.

This method will ensure that you pay the least amount of
interest and repay your debts as soon as possible.

The trick to paying the least amount of interest possible is
to pay extra money toward the debt with the highest interest
rate. Obviously you want that debt paid off as soon as you
can. Each month it costs you the most.

The trick to paying off your debts in the least amount of
time is to set a fixed total amount to pay each month. The
trap many people fall into is that they only pay the minimum
payments. These minimum payments are designed to keep you
paying that high interest rate for as long as possible.

By paying a fixed total amount each month, as one debt is
paid off, you will have more money to pay towards another
debt. This is often called the “snow-ball” effect.

But first things first.

First, determine you ability to pay. If your total payments
are much more than you can afford, you are in trouble. You
may need to contact a non-profit credit counseling agency.
You can find them in your local phone book or online.

But be careful of companies that want an up front fee.
Check with your local Better Business Bureau for
recommendations.

Next you need to make a commitment to stop getting further
into debt. Cut up your extra credit cards or put them where
you cannot easily get them. If you are living a lifestyle
that depends on credit, you will soon dig a hole you cannot
easily climb out of.

Stop spending more than you make each month and don’t count
on future bonuses, inheritances, refunds or other
non-dependable income to bail you out. If you make $2000 a
month you can only spend $2000 a month. Look for ways to
cut back and purchases you can postpone or do without.

Now, let’s look at each step of your ultimate debt reduction
plan more closely.

First, determine how much you can afford to pay each month
toward your debts. At the minimum it should be the total of
all your minimum payments for the current month.

You may need to examine your spending for the last several
months. Find things you can eliminate or do without for a
while. Postpone purchases, cancel subscriptions. Anything
to free up more money to pay off your debts.

You may even want to postpone investing for awhile. Are
your investments beating that 18% you are paying on your
credit card? If not, a better investment would be to repay
your debts.

Once you have your monthly debt repayment amount set, you
need to write down each monthly debt you are paying. Record
the creditor’s name, the current balance, and the interest
rate. Then take a separate sheet of paper and reorder the
debts so that the debt with the highest interest rate is at
the top.

Now as each monthly bill comes in pay the minimum payment.
Subtract the minimum payment amount from your set monthly
total. After all the bills are paid for the month, take any
extra money left over and make another payment on the debt
at the top of your list.

You can make an additional payment this month or save the
money to add to next month’s bill. But don’t spend it!

As each debt is repaid, cross it off your list, but keep
paying the total monthly amount you set at the beginning.
This will accelerate your debt repayment and save you
hundreds or even thousands in interest charges.

The two keys to your ultimate debt elimination plan are to
1) stop getting further into debt and 2) set your monthly
debt repayment amount. The rest is easy. You will be debt
free before you know it!

************************************************************
© Simple Joe, Inc.
David Berky is president of Simple Joe,
Inc. which sells the Simple Joe’s Debt Eraser PC software.
Debt Eraser can help anyone get out of debt quickly and
inexpensively by creating a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan. This article may be freely
distributed as long as the copyright, author’s information
and an active link (where possible) are included.

More and more consumers today find themselves in the
uncomfortable situation of only being able to afford the
minimum payments on their credit cards. Or, even worse, not
being able to afford even the minimum payments. In today’s
world, it is often easy to get in over your head and find
yourself spending more than you make. It seems that
everything is going up but wages, and it is all too easy to
fall behind.

Many of these desperate consumers find themselves
contemplating a bankruptcy filing, but bankruptcy can carry
a legacy you will have to live with for years. A bankruptcy
filing will stay on your record for a minimum of seven
years, and you may find it difficult or impossible to obtain
necessary credit in the interim.

Fortunately, there are alternatives to filing bankruptcy,
even for consumers who owe thousands or even tens of
thousands of dollars to various banks, credit cards and
other creditors. Many people ask whether it is best to go
with a debt reduction program or enroll in a credit
counseling program. While there are some similarities
between these two types of programs, there are some
important differences to consider as well. Let us consider
the five most important differences between debt reduction
and credit counseling.

1. Did you know that most credit counseling programs will
require that you close all of your credit accounts? The few
exceptions to this requirement include accounts that are
required for business needs, accounts with very small
balances and accounts on which services, on the other hand,
do not require that all credit accounts be closed. This can
make it much easier to keep a credit card for emergency and
convenience purposes.

2. Credit counseling services typically take longer to
complete than debt reduction services. The average length
of time to liquidate debt through a credit counseling
service is 5 years. Unlike credit counseling, debt
reduction programs can often allow consumers to retire their
debts in less than a year.

3. Cost savings in the form of reduced payments is another
important advantage of debt reduction programs. While
credit counseling programs typically require that the entire
amount of the debt be repaid, debt reduction programs can be
negotiated to allow the consumer to repay only a portion of
what is owed. Most creditors are willing to work with
consumers enrolled in debt reduction programs and that
includes accepting a lower repayment amount. Settlement
amounts can range anywhere from 20% to 60% of the amount
owed, with the industry average being around 50%.

4. Your credit score is also affected in different ways by
credit counseling programs versus debt reduction programs.
Generally, credit-reporting agencies will re-age the
accounts of consumers enrolled in credit counseling services
after three payments have been made. With a debt reduction
settlement, the status of the account does not change.
If the account is current, it will remain current. If it is
past due, it will remain so. It is also good to remember
that with a debt reduction agreement the creditor will
report that the account has been “settled in full” or
similar wording, at the conclusion of the debt reduction
program.

5. The final difference between debt reduction programs and
credit counseling is the bargaining power enjoyed by the
consumer. Credit counseling programs rely on the submission
of a debt repayment proposal which the creditors are free to
accept or reject as they see fit. With a debt reduction
program, however, all creditors are contacted immediately to
inform them of the hardship situation and the desire to
resolve it through a negotiated debt reduction agreement.

—————————————————–
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We were happy to see that the program helps you learn how to take control of your financial situation. It’s too easy to gloss right over setting yourself up the right way financially. Debt Busters System can really help you in that department.

In addition to step by step methods, you’ll also find some clear explanations of the way certain things work in the credit industry. It was good to see sections covering whether or not debt consolidation is right for you, as well as the benefits of paying off your mortgage early.

Where we thought this book really shined through were the included letter templates that help you contact those creditors who just won’t seem to leave you alone. The relief you’ll get from these form letters are worth far more than the purchase price alone.

Another incredibly important section is where it talks about whether or not to use credit counseling services. There are far too many people out there who fall into the trap of using these services, only to find that it actually got them further into trouble. Remember, these people profit off of your debt alone! This is a good wake up call for many people out there.

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