Tag Archives: home mortgage

Live Rent Free Or Make Millions With This Idea – Seriously!

Live Free With No Rent Or House Payment?

Bank Owned - Home Sitter WantedA member of our family is losing their home soon and their situation gave me an idea. There may be a little hope for those in similar situations if my guess is right.

The Details:

Ok, real quick; they don’t make a lot of money. They haven’t made a house payment in over a year and the bank just listed their home for sale. BUT, they haven’t been officially foreclosed on or evicted yet.

The bank said they could continue to live there, without making payments, until the house sold. Even then they will have plenty of time to move out – up to six months!

Why would the bank be so generous? I am sure it’s in the bank’s best interest. I know the banks have taken it hard and dry lately with the ‘revenge’ damage and vandalism involved with evictions and vacant homes. I imagine it’s better to keep someone living there, even free, which will take care of the place. That way the house is less likely to be broken into and little things like the utilities remaining on must be a big plus for the banks.

My Idea:

It might sound farfetched but what if people in that position made a proposal to the banks that they would ‘house sit’ on foreclosed and vacant property? I don’t know if it’s been done before but it sounds like a win-win for both the family and the bank.

It would be rough moving every year, or even more often, but that’s a great trade off – living somewhere free.

Business Idea:

Could this be a huge business idea for the right person? Imagine a professional ‘house sitting’ service with a client list full of large banks? Am I crazy or just a freakin’ genius?

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Save Thousands With A Mortgage Acceleration Program

Mortgage AccelerationOne of the quickest and easiest ways to pay your home loan down fast is by using some kind of mortgage acceleration plan. Paying off your mortgage loan faster can easily save you thousands or even tens of thousands of dollars.

How Mortgage Acceleration Works:

Weekly, bi-weekly or monthly payment plans? If you can manage it, and if your mortgage company or bank allows it, I recommend you pay your home loan payment weekly. This simple debt reduction tactic can save you a lot of money over the life of the loan. Here’s how:

To simplify things, let’s say your monthly home loan payment is $100. Lucky you, right? So you are paying $1,200 a year.

$100 x 12 months = $1,200

Rather than paying $100 monthly, you start paying $25 weekly. It’s the same thing, right? Now you are sending 52 payments of $25 which adds up to $1,300 a year.

$25 x 52 weeks = $1,300

So now you have sent an extra payment every year, which goes toward the principle, simply by changing ‘when’ you pay, not how much. Actually you are paying more but you just don’t feel it. There’s something like 4.3 weeks in a month, not 4 week in a month. Mortgage acceleration lets you take advantage of that extra time.

My Personal Example:

My personal equity accelerator detailsUsing my personal example, you can see that by making weekly payments and sending a little over $350/month extra toward the principle my 30 year traditional mortgage will pay off in fifteen years (only 12 years to go). Using this tactic, I will save close to $100,000 during the life of the loan. It would take a lot of grocery store coupon clipping to save that kind of cash! 🙂

Side Note: My monthly home loan payment just dropped by $130/month because my home lost market value – Hooray! I’ll still continue with the same weekly payments and we should be completely debt free, including the house, before this blog post is eight years old. Man this stuff is FUN!

The First Step:

Check with the financial institution servicing your home loan and ask about a mortgage acceleration program. These programs go by many names but you generally have to ask. Other names include interest reduction plans, equity accelerator (for Chase Bank), or mortgage reduction programs.

Don’t Stop At Basic Mortgage Acceleration:

Now that you have the ball rolling, and once you have a REAL emergency fund established, start dumping extra principle payments into your loan (DO NOT interrupt your debt free plan to do this). It’s amazing how quickly you can pay off your home with a little planning and when you get proactive.

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Hooray, I’m $38,000 Upside Down In My Home Mortgage

upside down home loanLike many states, Michigan took a huge hit in the housing market and the mortgage industry. As of December 2010, according to my local township, I’m $38 thousand dollars upside down in my home loan. In other words, I owe that much more for the loan than the home is worth.

What To Do With Your Home Mortgage

What should I do? Nothing! Did you notice the ‘hooray’ in the blog title? I have no plans to sell or refinance the house so what’s the big deal? The big deal is that my taxes went down two times in a row over the last two years. The house still has the ‘living value’ as it always did to me.

We keep hearing about short sales and people just walking away from their homes because they’re so far in the red. Why? If the home was worth (fill in the blank) $___ each month ‘to you’ before the home value crashed, and you plan on staying there for a long while, what does it really matter?

But I’m In The Red With My Home Loan

Psychologically we tend to think, “I can buy a house twice as big for the same money”. Admittedly your net worth is taking a hit but, again, if you’re not seeking a loan what does it matter? If you simply can no longer afford the house for whatever reason, that’s one thing but we are still obligated to pay the debt even though the home decreased in value. There are no guarantees when it comes to investments and that’s what buying a home is. We’ve just been pretty spoiled with home values for years and reality is sometimes a hard pill to swallow.

The Future Housing Market?

As far as I’m concerned, I hope my home value, and taxes, continue to drop. Let the government squirm and struggle for a change. I’ll find somewhere more deserving to put that money.

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Number One New Year Resolution – Pay Down That Home Loan

2011 New Year In New YorkI’ve spent most of the day blogging around finance sites and, of course, New Year’s resolutions are at the top of the subject right now. Paying down home mortgages is a huge goal this time of year.

I’m on an accelerated payment plan right now that pays the house off in 12 more years (15 years total on a $150,000 loan).

Big Blessing: December the first I was blessed with an early Christmas present when I learned my winter property taxes dropped drastically. So much that now my payments are $130/month less.

The Plan: What to do with that savings? Hummm, you guessed it, I’m tossing that into principle payments to knock out this home mortgage even sooner.

Want More? More on the accelerated payment plan soon, you’ll be very interested in the benefits with this tactic if you are not already familiar with it.

A Year Later: What does a Pro Blogger make for his New Years Resolution