Society has designed the system so that you will be in debt for most of your life – all of it if you plan right. The mortgage industry has developed loans that will allow people to borrow more – which have pushed up the price of houses, requiring people to pay more for less house.
It seems like an endless cycle – but you can get out now!
A traditional mortgage will cost you three times what you agreed the house was worth – if you pay off in the full amount of time allotted. If you make one extra payment per year, the number of years decreases. Now pay on the principle each month, and you could decrease your mortgage term to as little as seven years. That means you will be debt free AND you will have paid thousands less in interest.
There are mortgages that are beginning to make their way into the United States that are designed to help you pay off the loan faster. Basically, you put money into an account to pay your mortgage. At the end of the month, everything that is left over (after paying your monthly payment) is rolled over to principle. If you don’t have a mortgage already, this could be the path for you.
If you are already locked into a mortgage, you don’t want to go to the expense of moving to a new lender. It is possible to use the same concept – if you will just be disciplined about it. Set aside ¼ of your normally monthly payment. At the end of the month, if you haven’t HAD to use the money, then pay it on your principle.
It’s really just one simple step that will buck the system and have you debt free before your children can even spell the word.