pay off my mortgage in 10 years

pay off my mortgage in 10 years
Whether you rent a house, apartment, condo, row house or even a mobile home, except it offers accommodation, rent payment is like money out the window of the month. There are many reasons to own your own house is clearly cheaper than rent, if you rarely hear or see the concepts presented in this report.

Apart from the obvious benefits of owning a piece of the American dream, you: 1) a place of their own to do as you wish, 2) achieve equity in real estate with the goal of eventual own it free and clear, and 3) never a landlord choose when you have to admit the premises. Also have a home can have huge financial benefits, the rent can never achieve.

Real Estate is the best way to get rich in this country. And, owning a home is the first step to a millionaire. Your home mortgage is a wonderful tool to assist in the creation of wealth for themselves, and the right mortgage strategy is as important as anything else.

Let's take a brief look at some financial benefits of owning a house, before we dive into a complex - but effective - strategy of using a mortgage as an important tool in your wealth building strategy. Here are some key benefits you'll enjoy if the payment of your mortgage over a Mietavalen:

• mortgage interest tax deduction;
• Historically consistent payments;
• Recognition in the largest investment;
• ability to build on the house of justice and access to large sums of money, if necessary, and
• Tax-free profits from the sale of primary residences (talk to your accountant or CPA for specific features).

We want now to give an example, a better demonstration of what a mortgage can do for you. For this scenario, we assume that we are renting a Townhomes for $ 1200 per month and the rent increases to 5% per year. We compare these against the purchase of a $ 250,000 home with 100% financing at an interest rate of 6.875% for 30 years. In our example, we have the comparison of the actual mortgage payment compared to the actual rent payments, net of taxes, so an accurate "apples to apples" comparison.

With our mortgage of $ 250,000, we have before taxes in the amount of $ 1642nd If you are in the 28% tax bracket, your true interest rate is not 6.875%. It really is 4.95% because of the tax deductibility of mortgage interest. Your monthly mortgage payment is really $ 1182 - is technically less than the rent payment! Out of your monthly payment of $ 1642, $ 210 is in the direction of the principal of your loan (ie the creation of capital for you), so that the $ 1432 tax deductible as mortgage interest. (Note that in the course of time, more of your payment is made to the principal and less interest).

With mortgage interest payments totaling approximately $ 17,184 per year, and with your 28% tax deduction, Uncle Sam will give you more than $ 4800 on your taxes! Try some of your Mietavalen back every year! This deduction is over $ 400 per month for real money. Well, here's where the strategic part is in: While many people with their mortgages as a tax savings and be forced to consume that money each year on vacation, new clothes, jet-ski or other cash flow issues, you should think that reinvest the money back into your mortgage.

Their annual mortgage tax refund and its application to your mortgage is the same as sending in about $ 400 extra dollars per month for your mortgage principal. However, since the amount of capital, the interest paid over time increases, you get less and less of tax depreciation over the years.

Although the benefits are still huge and the concept still works, and because of your refund time, we will assume that you have only $ 3960 per year ($ 330 per month) (even if your income increases, if You can find yourself in a higher tax bracket.) Through the use of an additional $ 3960 per year on your $ 250,000 mortgage, you have it paid off in just 18 years! You no longer have a mortgage or rent payments, and you own your home free and clear! A different view of things like this: Uncle Sam paid for 12 years of the original 30-year mortgage. Talk about a great performance!

Ok, so what's next? You already have a monthly mortgage of $ 1642, to the mortgage company, and even though the house is paid for, you continue to say that the payment - but this time for themselves. If you were able to earn a modest return of 6% per year to invest the money in the last 12 years, you would accumulate a nest egg of about $ 333,000. Conversely, after the year 18, the renter is not closer to, as his home as he was when he started, and his rent payment is about $ 3000 per month!

Your $ 250,000 home was earning a very modest 3.5% appreciation per year, is now worth about $ 701,000 by the end of the 30th year This number, and your investment account nest egg of $ 333,000, you will receive a net worth over $ 1034000!

I sincerely hope that these tips and ideas are of value for you. For more information about mortgages, or if there is any way I can be of service, please do not hesitate to call me. I think it is a privilege, as a service for you!

Yours sincerely

Lew Corcoran

Sr. Mortgage Consultant