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5270 House and Home
PAY YOUR MORTGAGE DOWN FASTER AND SAVE.
Pay your mortgage down faster by opening a HELOC @ 6% or more. Print out your loan amortization, add the interest for the next 5 payments and divide that by how much you paid on the principal during that time; it will probably come out to 20% or 30% or more. Better to pay 20+% or 6%?
Dick Gehring, Consultant, NY

Current Rating: 4 out of 10 based on 7 reviews

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JoeTaxpayer - 2013-01-25
Dick - An interest rate is calculated by dividing the annual interest paid over the average principal during the year. To suggest diving interest by principal 'paid' produces a meaningless number. Say my mortgage is 1%. On a $100K loan, the first payment of $322 is $83 interest and $239 principal. The fact that 83/239 is 35% is meaningless. One must divide the $83 by the $100K and see it's 1% over a year's time. I've done the math, this is it.

Dick Gehring - 2011-02-27
One of the keys to this is have all your income go directly to the HELOC and pay your bills from it.

Dick Gehring - 2011-02-25
Doubling up you payments is no where as effective as this approch. . . do the math.