A New, Fast Mortgage Payment System delivers a cool $250,000.00 Retirement Benefit, at least. This sum could reach up to and beyond the half a million dollar mark, $500,000.00 or so if a savings program is involved. This new system is threatening to revolutionize the Mortgage Business in both Canada and the United States.
We did the calculations. Previously, the total bill to repay a $200,000.00 Mortgage at 5.0% interest is at least $700,000.00 to use rounded numbers. You earn the $200,000.00 to pay off the loan. Another $280,000.00 is the interest paid on the mortgage loan. Then you must pay government taxes on your earnings of another $220,000.00, assuming you are in the 40% tax bracket. Since this is not a math class. These figures are close and meaningful approximations.
Faster Mortgage Payments: Now, an expanding group of Financial Advisors are quietly advising their Clients to turn those mortgage payment numbers around to create their own wealth. The Advisor’s’ Plan works something like this. Since you must earn the $700,000.00 to pay the Mortgage, Why not keep Interest and taxes to a low of $ 200,000.00 total. Then you the Home Owner could pocket the difference –$500,000.00. Two Hundred Thousand Dollars ($200,000.00) pay the mortgage loan on the home and $300,000.00 you keep from Tax savings and interest savings because you followed the fast mortgage early repayment plan or SMERP.
This new approach to Household Budget and finance involves a series of fancy financial footwork that effectively pays off the mortgage principal faster. Now you could be free of a mortgage in one half to one third the time it previously took. If a 30-Year mortgage gets paid off in 15 or 20 years in the United States…. Or, if in Canada, a 25- year mortgage gets paid in 15 or even 10 years, then the fortunate Consumer just freed her Home Budget from 10 or 15 YEARS of Mortgage Payments. That simple maneuver accounts for the core savings in these new techniques. In our example, at Monthly Payments of $ 1163.03, 10 years of payments saved, alone, would create almost $140,000.00 of cash savings. Fifteen years would produce raw savings above $209,000.00. When we add other realities such as a positive return on those dollars over 10 to 15 years,, then these dollars begin to be counted seriously in fractions of a million dollar range. http://www.rateconnect.ca