Mortgage Education

Educating the general public on the use of their mortgage, and getting the right mortgage, is a momentous task because of the way the majority of us have been brought us to understand money and mortgages.

There are not a lot of people who are talking about this new idea of getting an interest only loan or a power option mortgage to start using that principal to make it work for them. The way changes come about are when people start asking questions and not just taking for granted what has been taught in the past. As time goes by, new way of doing things will come up. However, the only way to bring about the new change is to question the current mantra.

This is what Ric Edelman has done. He has questioned the reasoning why homeowners pay off their mortgage--or want to pay it off in a hurry. For one thing, I'm glad he asked the questions to begin a thoughtful dialogue that has brought this new way to look at mortgages about.

What is currently happening is people are getting the education that will enable them to fully utilize their mortgage to make money. That education begins with knowing the new rules of money. Follow this link to the site to begin your education.

The Power Of Compound Interest

You can save as much as 35% in taxes on every dollar you pay in interest. In other words, your mortgage is tax deductible at your top tax bracket.

Using a house as part of business will certainly help, but you can only use part of the house as a business expense--the portion that you use as part of your business.

Paying off your mortgage completely will not necessarily give you the biggest tax advantage when use your business as part of the deductions.

I'm not a CPA so I must ask that you seek their counsel for the definitive answer.

Also, check out Ric Edelman's book, "Ordinary People, Extraordinary Wealth"

To accelerate is a matter of personal opinion.

I certainly agree that it’s a personal opinion whether or not someone should accelerate paying off their mortgage.

However, it also comes down to education and the majority of the population is not versed in either option.

As previously mentioned, Ric Edelman is the expert on this and has done the study on this and now a lot of other financial planners and advisors are coming around to the facts presented in his argument. Plus, he's Oprah's personal financial planner--if it's good for her, it's certainly good for me and a lot of other people out there.

My biggest argument about carrying a long-term mortgage and not doing the accelerated pay-off is the money that you’re investing benefits from the power of compounding interest.

If you were to use the pay off accelerator, yeah you would pay off your mortgage in 22-25yrs, but during that time you would not be investing and taking advantage of compounding interest.

22-25 years of just paying off the mortgage is a lot of time to miss out in earning interest on your money. Think about that for a minute.

Check out the brother A and brother B scenario in the video on my site: http://ezleadcapture.com/member/wlg.htm
It clearly shows the power of compounding interest and how quickly it can create wealth for you.

Why You Should Stop Using Mortgage Accelerator Programs

I received a not the other day from a gentlemen who does the mortgage accelerator program as a business. He asked me if the harnessing your mortgage program was similar to the mortgage accelerator program. He also mentioned how great it was to help people pay off their mortgage quickly and make a profit at the same time for each new person he helps.

This individual, let's call him Mike, does not understand the power of the mortgage and how you can use it to your advantage to create wealth. The first question I asked was, why would you want to pay off your mortgage quickly and lose the biggest tax break a homeowner has? He still has not written me back with an answer.

I suggested he visit my site, http://ezleadcapture.com/member/wlg.htm, to learn about the new rule of money and specifically how the mortgage relates to the home and why people should be thinking differently about their mortgage.

The new rules of money states, briefly, that you should carry a big long term mortgage--whether you plan on living there for 5 or 30 yrs. This does not mean that you get a big expensive house, however.

A big long term mortgage gives you the biggest tax break. The way to do that is to get an interest only mortgage. The principal part of the mortgage you were paying can now be invested--as well as any extra payments you were making.

Even if you are in year 25 of your mortgage payment, you should refinance so you can take advantage of the tax deductibility you get on the interest payment of your new mortgage.

Let's say you don't refinance and pay off your mortgage, what tax break will you receive with a clear and free home? As previously mentioned, this is the biggest personal tax break you'll ever get, so why would you not refinance to make that happen?

Learn more about the rules of money and harnessing your mortgage to create wealth and residual income at http://ezleadcapture.com/member/wlg.htm

Discover How To Use Your Mortgage To Create Wealth

Most people who buy homes get mortgages where they pay principal, interest, taxes, and insurance. They are taught that they must pay down the debt and have their equity--their investment--in the house.

Now, let's think about this for a moment. On a 30 yr mortgage with a fixed interest, most of your payment will go towards paying the interest with very little towards the principal. You don't start making a major dent on the principal until year 20 or so.

Second, having the money in the home, is it working for you and making you more money? The answer is no! What happens if you need some of that equity for an emergency? You have to either get an equity line of credit, get another mortgage, or refinance to get cash. That money, your money, that you're borrowing, you will have to pay interest on it. You're already paying interest on your mortgage but now you're going to pay payment to borrow your money?

Does that sound right?

What's the solution you ask?

Here it is: You get an interest only loan and never pay it off--never pay off the principal.

You get the money out of the house. By not paying the principal, you use that principal payment--money you would have paid in a regular 30 yr mortgage--and invest it in a mutual fund that's earning you 8-10%. Your money then is working for you making you money.

Your money now becomes more liquid--you can access it easier and you don't have to pay interest on it when you want to use it, unlike a HELOC or a second mortgage. In essence, you're using the bank's money to create wealth for yourself.

You're probably wondering, how do I build equity? Do you know that the mortgage has very little bearing on whether or not your home will appreciate? Your home will appreciate regardless whether you pay down the debt or not. The thing to remember is that you'll use your mortgage to build wealth. However, the key aspect to creating wealth is to invest regularly and consistently.

If you have not been thinking about harnessing your mortgage to create wealth, then this is your introduction to it. But first, learn about the new rules of money and how it affects your mortgage. More information will be forthcoming.

Let me know what you thought about this article.