The Game Plan For Paying Off Your Home Early

"What you do for others, God will do for you". Ephesians 6:8

This article as all others is a seed. This seed will be planted into your life. You are responsible for nurturing and giving this seed life.

Your biggest debt right now is probably your mortgage. I am going to show you how to pay off your mortgage early, and how to save thousands of dollars and its all legal. It is moral, noble and worthy to pay off your debts. The principle that I will teach you regarding paying off your home early can be applied to any debt that you have.

You have been simply conditioned to think that it takes 30 years to pay off a mortgage. This is not true! You can pay off your mortgage early and it is moral, noble and worthy to do so. Lets examine.

Your total monthly payment is made of two parts called the Principle and the Interest. The Principle payment goes towards your home and reduces the amount that you owe on the home. The Interest payment goes to pay the bank and reduces the your interest ONLY. It is in no way connected to reducing the amount you own on your home. It is the bankers profit.

Your monthly payment is divided each month, with a certain amount going towards the Principle and a certain amount going towards the Interest. Don't assume that the greater amount goes towards the Principle or the actual amount you owe on the house because the opposite is true. The greater amount of your payment goes to pay off the Interest first or the bank's profit.

For the first 15 years of the term of your loan, the greater part of your monthly payment goes to pay off the interest! At the half way point of the term of your loan, then and then only do your payments become evenly distributed between the Principle and the Interest. After the halfway point the greater part of your payment will thenstart to go towards the Principle.

So, for the first 15 years of your termed loan. The majority of the money that you will have paid goes towards the Interest with only a small amount going towards the amount of your Principle or the actual amount you own on your house.

Let's examine the amortization schedule below: This amortization schedule reflects a mortgage of $150,000 that is paid off over a 30 year period at an 11% interest with a fixed monthly payment of $1,153.37.

Payment~Due Date~Interest~Principle~MonthlyPayment

1.... 01/01/08..... $1,062.... $91.... $1,153.37

2.... 02/01/08..... $1,062.... $92.... $1,153.37

3.... 03/01/08..... $1,061.... $92.... $1,153.37

180.... 12/01/22..... $832.... $321.... $1,153.37

360.... 12/01/37..... $8.... $1,145..... $1,153.37

Looking above at the amortization schedule, the first monthly payment of $1,153.37 is divided into two parts with the greater part of $1,062 going towards the Interest to the bank and only $91 going towards the actual amount that you owe on your house. By the end of the first 12 months you will have paid $12,706 towards the interest and only $1,134 towards what you own on your home. At the end of the first year you still owe $148,866 on this loan!!!

At the end of the amortization schedule, meaning when you have completely paid off this termed loan, you will have paid $150,000, what you initially borrowed PLUS $265,213 in INTEREST to the bank. So, your grand total for this home is $415,213!!! According to the figures, you would have purchased this home ALMOST THREE TIMES!!! and the majority (2/3two thirds) of your monthly payments goes towards the interest or to the banker for their profits.

You are called to be a good steward to what God has given you. The term steward means one who is appointed over something. All that we have, is and are is God's. The Father watches how we handle our money and any other thing he grants us. The manner in which we manage our affairs determines what we will be trusted with in the future. "He who is faithful in what is least is faithful also in much; and he who is unjust in what is least is unjust also in much. Therefore if you have not been faithful in the unrighteous mammon, who will commit to your trust the true riches? And if you have not been faithful in what is another man's, who will give you what is your own?" (Luke 16:10-12). You are to make Profitable Use of your life. It pleases the Father when we make the most of the resources He has given to us by using them to our best advantage.

Now, lets take a look at The Solution:

Making early principle payments will reduce the amount of interest that you would otherwise pay. The way that you make early principle payments is to include an additional check with your regular scheduled monthly payment. This payment should be separate and in the memo section in the left hand corner you should write "Early Principle Payment". This early principle payment will go directly towards the reduction of your principle! Paying principle payments early saves on interest you would have paid if you kept paying according to the amortization schedule, in so doing; you reduce the amount you actually owe on your loan Now, this is good stewardship!

The "Early Principle Payments" can be made in any amount you choose, however; some banks have particular amounts for "Early Principle Payments". You should contact your bank for instructions on how to go about sending in your early principle payments along with your regularly scheduled monthly payments.

You may say..."I can barely make my monthly payments now. How will I find the extra money for the "early principle payments"? You simply choose to cut back on eating out (eat at home, it's a lot healthier), going to the movies ( read a book!), getting manicures & pedicures (do them yourself!) and etc,. There are many ways to get this money to pay off your biggest debt, you simply have to make a choice to so.

It is clear that putting this principle to work on any debt that you may have gives you the advantage and is to your best interest.

"Whatever you can do, Or dream you can, begin it. Boldness has genius, Power and magic in it."