[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: Here is the Excel file http://groups.yahoo.com/group/FairfieldLife/files/Local% 20Services/ --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. I never heard the term front loaded before so I thought you were using it to mean what we're talking about, that the interest on a 30 year fixed home loan is calculated by the banks on purpose to be paid at the beginning of the loan as you've shown on your excel sheet. This is an arbitrary arrangement by the banks. The interest could have been arranged so the principle so that both could be paid together over the 30 years by simply adding the principle and interest together and dividing the amount over 30 years. The reason the banks do this, is to collect the interest first. That way, if the borrower should decide to pay off the entire loan early, let's say after 10 years, they will end up paying almost the entire amount of principle. Look at your excel sheet and you'll see that after 10 years, the accumulative interest is over $60,000 and the accumulative principle is only $17,000. The pay off would be around $100,000. This is what I'm talking about, banks purposely collecting almost all of the interest up front. In my opinion, this is a scam. Mark * In that case, you can scam the banks right back: http://www.nytimes.com/2007/06/10/magazine/10wwln-freakonomics-t.html
[FairfieldLife] Re: Home Loan Alternative
new morning wrote: You still don't get the most fundamental concept of finance: the time value of money. This is amazing! You're saying that some people take out home loans and without understanding the most fundamental concept of finance? That must be why a lot of folks took out A.R.M.s. I'm not a very smart person but I took Business Math two years ago at my school and learned all about an amortization table. This is not rocket science by any means. But what is amazing to me is that this is the first thread on a TM newsforum that I've read, in seven years, where a TMer even suggested that they were a homeowner. Here we've got Uncle Tantra renting shacks over in France and Spain, and folks up in Fairfield renting trailer houses, but nobody seems to have progressed to a point where they can afford to own their own home? What's wrong with this picture? Doesn't anyone on these groups have a retirement plan or at least a savings plan? Apparently, Barry doesn't even pay into U.S. Social Security anymore. Shemp seems to be in a good place financialy and Steve Perino claimed to have purchaed a house out in Cedar Park - I'm sure there are a few others, so I may be talking out my ass here. Go figure. From what I've read, the faculty at MUM get paid only a few thousand dallars a year, with Bevan making the lowest salary of just about any college president in the U.S. I wouldn't be surprised if not a single MUM faculty own their own home. The retirement plan for MUM faculty, if there is one, would problabe pay them all of $300 a month after working there for 20 years. One thing that I've noticed about TMers from the first few years of my involvement with the TMO is that a lot of TMers just aren't very interested in making any money, except to charge poor students and then sending the money to the Marshy's relatives in India. It must be pretty scary for some people when they realize that after believing they would get enlightened in 5-7 years, that all they'll get is a bed at a government nursing home, after living in a trailer house for ten years, just so they could enjoy the good vibes in Fairfield. Call me a materialist if you want to, but I just feel better knowing that I have a few bucks in the bank to fall back on in my old age. My question is: what is it about the TM program that makes it so that so many people are so broke after having practiced the program for so many years? Wouldn't it have been more sensible to have continued school, graduated, got a good job, saved some money and THEN spend 6 months at a TTC, or a few years working for the TMO? I guess I just don't get it. I guess my point is: why is it that people like the Marshy and Mukta and Sai and Osho and Trungpa make all these millions of dollars, but most of their followers are mere paupers? I must be screwed up! I'll probably die without reaching enlightenment and my grand kids will get all my money and spend it on games and TV sets or give it all to some spiritual teacher like the Sogyal. Money has a cost. Its like you are renting money. the rent on 120,000 at 6% interest = (6% /12)* 120,000 = $600 / month. that is not arbitrary. Its the monthly cost on the money you loaned. You can pay as much byond that as you like to pay down the principal. You can pay back as much principal as you want AFTER you pay the rent (aka interest)due on the loan each month. If you want to pay the principal down -- and reduce subsequent interest payments, pay 2600 each month. $600 which you owe for renting $120,000 and 2000 principal pay down. After a year of doing that, you would have 96,000 principal due, and your interest would fall to .5% x 96,000 = $480. Study the spreadsheet a little. Look at column D and how the interst is calculated each month. its 6%/12 * the remaning principal each month. There is NOTHING arbitrary about this arrangment. If you want your loan structured so that interest and principal are equal, then (for a 30 year loan) you would have an interst deficit each month. Just like past rent due, you eventually have to pay it. How is that done? The unpaid interest is added to your principal. So you reduce interest by say $400 each mnth by paying equal principal and you now owe $400 in past interest due. That will be added to your principal. You ahve gained nothing except some extra paper work. If you don't like how banks structure their loans, if you really feel its a rip off -- why be ripped off (even ifs only all in your mind). Why not just rent? You either rent property, or you rent money to buy property. And in the first case, your landlord rents the money for the property. And part of your rent is paying him back for his rent on the money to buy the house you rent.
[FairfieldLife] Re: Home Loan Alternative
In Colorado it's easy to buy a home. Homes are cheap and there are more mortgage companies willing to give you money than money itself. It's true that Colorado has the second highest foreclosure rate in the US but this is because money is easy to get. You do have to be careful because a good number of mortgage companies are crooked with fraudulent appraisers giving phony values on homes in order for the mortgage companies to shell out more money. Most people are not financial wizards and many get stuck with the wrong loan, i.e., ARM, interest only, etc. Most people do NOT read the docs they sign in the excitement of getting through the front door of a home just purchased. If you stick with reputable mortgage companies or banks such as Wells Fargo or Countrywide Home Loan, you'll be ok and will not get ripped off with closing costs. Interest rates are still low, around 6% so a fixed 30 year loan is a good way to go. There are homes here for as little as $150,000. The market is saturated with homes. It's a buyers market. You can even get into a home with no down payment if you've got any kind of credit history. For the price of the Vastu homes in Fairfield, you can have a beautiful home here in Fort Collins, Colorado. I had multiple mortgage companies running after me to give me money for a home. I first went with Countrywide Home Loan but when I ended up with Wells Fargo, Countrywide ran after me to match Wells Fargo closing costs and interest rates. The only home loan doc I read was how much the closing costs were. The rest of the docs are in my closet somewhere, a home loan with a good rate, 5.875%. By the way, everything new.morning said about interest payments is correct and I wanted to say thanks for the explanation. Mark --- In FairfieldLife@yahoogroups.com, Richard J. Williams [EMAIL PROTECTED] wrote: new morning wrote: You still don't get the most fundamental concept of finance: the time value of money. This is amazing! You're saying that some people take out home loans and without understanding the most fundamental concept of finance? That must be why a lot of folks took out A.R.M.s. I'm not a very smart person but I took Business Math two years ago at my school and learned all about an amortization table. This is not rocket science by any means. But what is amazing to me is that this is the first thread on a TM newsforum that I've read, in seven years, where a TMer even suggested that they were a homeowner. Here we've got Uncle Tantra renting shacks over in France and Spain, and folks up in Fairfield renting trailer houses, but nobody seems to have progressed to a point where they can afford to own their own home? What's wrong with this picture? Doesn't anyone on these groups have a retirement plan or at least a savings plan? Apparently, Barry doesn't even pay into U.S. Social Security anymore. Shemp seems to be in a good place financialy and Steve Perino claimed to have purchaed a house out in Cedar Park - I'm sure there are a few others, so I may be talking out my ass here. Go figure. From what I've read, the faculty at MUM get paid only a few thousand dallars a year, with Bevan making the lowest salary of just about any college president in the U.S. I wouldn't be surprised if not a single MUM faculty own their own home. The retirement plan for MUM faculty, if there is one, would problabe pay them all of $300 a month after working there for 20 years. One thing that I've noticed about TMers from the first few years of my involvement with the TMO is that a lot of TMers just aren't very interested in making any money, except to charge poor students and then sending the money to the Marshy's relatives in India. It must be pretty scary for some people when they realize that after believing they would get enlightened in 5-7 years, that all they'll get is a bed at a government nursing home, after living in a trailer house for ten years, just so they could enjoy the good vibes in Fairfield. Call me a materialist if you want to, but I just feel better knowing that I have a few bucks in the bank to fall back on in my old age. My question is: what is it about the TM program that makes it so that so many people are so broke after having practiced the program for so many years? Wouldn't it have been more sensible to have continued school, graduated, got a good job, saved some money and THEN spend 6 months at a TTC, or a few years working for the TMO? I guess I just don't get it. I guess my point is: why is it that people like the Marshy and Mukta and Sai and Osho and Trungpa make all these millions of dollars, but most of their followers are mere paupers? I must be screwed up! I'll probably die without reaching enlightenment and my grand kids will get all my money and spend it on games and TV sets or give it all to some spiritual teacher like
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: Here is the Excel file http://groups.yahoo.com/group/FairfieldLife/files/Local%20Services/ --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. I never heard the term front loaded before so I thought you were using it to mean what we're talking about, that the interest on a 30 year fixed home loan is calculated by the banks on purpose to be paid at the beginning of the loan as you've shown on your excel sheet. This is an arbitrary arrangement by the banks. The interest could have been arranged so the principle so that both could be paid together over the 30 years by simply adding the principle and interest together and dividing the amount over 30 years. The reason the banks do this, is to collect the interest first. That way, if the borrower should decide to pay off the entire loan early, let's say after 10 years, they will end up paying almost the entire amount of principle. Look at your excel sheet and you'll see that after 10 years, the accumulative interest is over $60,000 and the accumulative principle is only $17,000. The pay off would be around $100,000. This is what I'm talking about, banks purposely collecting almost all of the interest up front. In my opinion, this is a scam. Mark
[FairfieldLife] Re: Home Loan Alternative
You still don't get the most fundamental concept of finance: the time value of money. Money has a cost. Its like you are renting money. the rent on 120,000 at 6% interest = (6% /12)* 120,000 = $600 / month. that is not arbitrary. Its the monthly cost on the money you loaned. You can pay as much byond that as you like to pay down the principal. You can pay back as much principal as you want AFTER you pay the rent (aka interest)due on the loan each month. If you want to pay the principal down -- and reduce subsequent interest payments, pay 2600 each month. $600 which you owe for renting $120,000 and 2000 principal pay down. After a year of doing that, you would have 96,000 principal due, and your interest would fall to .5% x 96,000 = $480. Study the spreadsheet a little. Look at column D and how the interst is calculated each month. its 6%/12 * the remaning principal each month. There is NOTHING arbitrary about this arrangment. If you want your loan structured so that interest and principal are equal, then (for a 30 year loan) you would have an interst deficit each month. Just like past rent due, you eventually have to pay it. How is that done? The unpaid interest is added to your principal. So you reduce interest by say $400 each mnth by paying equal principal and you now owe $400 in past interest due. That will be added to your principal. You ahve gained nothing except some extra paper work. If you don't like how banks structure their loans, if you really feel its a rip off -- why be ripped off (even ifs only all in your mind). Why not just rent? You either rent property, or you rent money to buy property. And in the first case, your landlord rents the money for the property. And part of your rent is paying him back for his rent on the money to buy the house you rent. have been arranged so the principle so that both could be paid together over the 30 years by simply adding the principle and interest together and dividing the amount over 30 years. This is an arbitrary arrangement by the banks. The interest could have been arranged so the principle so that both could be paid together over the 30 years by simply adding the principle and interest together and dividing the amount over 30 years. --- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ Here is the Excel file The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. I never heard the term front loaded before so I thought you were using it to mean what we're talking about, that the interest on a 30 year fixed home loan is calculated by the banks on purpose to be paid at the beginning of the loan as you've shown on your excel sheet. This is an arbitrary arrangement by the banks. The interest could have been arranged so the principle so that both could be paid together over the 30 years by simply adding the principle and interest together and dividing the amount over 30 years. The reason the banks do this, is to collect the interest first. That way, if the borrower should decide to pay off the entire loan early, let's say after 10 years, they will end up paying almost the entire amount of principle. Look at your excel sheet and you'll see that after 10 years, the accumulative interest is over $60,000 and the accumulative principle is only $17,000. The pay off would be around $100,000. This is what I'm talking about, banks purposely collecting almost all of the interest up front. In my opinion, this is a scam. Mark
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: This is totally off the topic so I expect some really, good off the topic responses. I bought a house two years ago here in beautiful Colorado and throughout that time, the more I thought about the loan, the madder I started getting, specifically, paying all the interest up front. I borrowed a little over $100K and came up with the rest. The total cost of the house was $233,000. What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. It appears on my statements that the interest IS frontloaded for example on a loan of $117,000, for two years now, I've paid $20,000 in iterest and $3000 in principle. The $900 a month I'm paying is paying off mainly interest first for the first ten years (approximately). If I were to increase the principle amount of payback, they would recalculate the interest and it's true that a higher percentage of the principle would be coveredt. Mark http://www.refinance-refinance.net/2006/04/10/mortgages-for-dummies- mortgage-term-length.html For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest.
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. It appears on my statements that the interest IS frontloaded for example on a loan of $117,000, for two years now, I've paid $20,000 in iterest and $3000 in principle. The $900 a month I'm paying is paying off mainly interest first for the first ten years (approximately). If I were to increase the principle amount of payback, they would recalculate the interest and it's true that a higher percentage of the principle would be coveredt. Mark http://www.refinance-refinance.net/2006/04/10/mortgages-for-dummies- mortgage-term-length.html For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest.
[FairfieldLife] Re: Home Loan Alternative
Here is the file link http://groups.yahoo.com/group/FairfieldLife/files/Local%20Services/ --- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. It appears on my statements that the interest IS frontloaded for example on a loan of $117,000, for two years now, I've paid $20,000 in iterest and $3000 in principle. The $900 a month I'm paying is paying off mainly interest first for the first ten years (approximately). If I were to increase the principle amount of payback, they would recalculate the interest and it's true that a higher percentage of the principle would be coveredt. Mark http://www.refinance-refinance.net/2006/04/10/mortgages-for-dummies- mortgage-term-length.html For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest.
[FairfieldLife] Re: Home Loan Alternative
Here is the Excel file http://groups.yahoo.com/group/FairfieldLife/files/Local%20Services/ --- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. It appears on my statements that the interest IS frontloaded for example on a loan of $117,000, for two years now, I've paid $20,000 in iterest and $3000 in principle. The $900 a month I'm paying is paying off mainly interest first for the first ten years (approximately). If I were to increase the principle amount of payback, they would recalculate the interest and it's true that a higher percentage of the principle would be coveredt. Mark http://www.refinance-refinance.net/2006/04/10/mortgages-for-dummies- mortgage-term-length.html For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest.
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, new.morning no_reply@ wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. This is true for short term loans only, not 30 year fixed loans. Not true. The principle is the same. If you have a teaser low interest loan for the first 5 years, or an ARM, or other more complex loan, then its a slightly different structure -- but the principle is the same -- you pay interest on the outstanding principal. You and the author of the link you gave appear to feel that because initial interest payments are more than principal in the first years of the mortgage, that it is front loaded. Thats an odd definition of front-loaded. Front loaded traditionally means paying MORE interst than is warranted by what is due on remaining principal. Create a payment and interest stream in Excel or Google SS and you will understand whats going on. I have put an excel ss that mimics your case in the FFL files Service. Actual interest does not sink to the level of principal until year 21. But that is NOT front loading in the traditional finance sense of the word. It appears on my statements that the interest IS frontloaded for example on a loan of $117,000, for two years now, I've paid $20,000 in iterest and $3000 in principle. The $900 a month I'm paying is paying off mainly interest first for the first ten years (approximately). If I were to increase the principle amount of payback, they would recalculate the interest and it's true that a higher percentage of the principle would be coveredt. Mark http://www.refinance-refinance.net/2006/04/10/mortgages-for- dummies- mortgage-term-length.html For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest. I am really astounded that anyone would get a loan without understanding the legal loan docs or having an amortization schedule. this stuff is very basic math and simple excel document stuff. Mortgage lenders are required to give you a truth in lending statement. Anyone who gets a loan, signs a slew of legal docs, promissory notes etc. If you are mature enough to sign for a loan, it seems that you should know what it means. I am kind of tired of the big wa about loans. Read before you sign. ASk questions before getting the loan. This is very very basic stuff.
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
--- In FairfieldLife@yahoogroups.com, mainstream20016 [EMAIL PROTECTED] wrote: Mark, First of all, congratulations, for living in Colorado. I hope you experience the inspirational beauty of the Rockies every day. I long ago vowed that I would live in Colorado when I got my life together. I'm not there yet, but perhaps one day I'll live NW of Boulder, perhaps in or near Ward, or Allenspark. Where in Colorado do you live? Anyway, back to your inquiry. I'm no money pro, but like so many, I regard my own opinion highly, and I'd like to offer my $.02 regarding your inquiry 'home loan alternative'. The stated concept, as I understand it, is to simplify the administration of debt service and maximize the use of your money. The stategy is accomplished by creation of an account to which all streams of income are directed and from which all debt service is paid. Such an account would be created at the same time that you create a new mortgage, specifically a Home Equity Line of Credit. ( HELOC ). Practically speaking, you'd take out a HELOC, the proceeds of which would pay off the existing mortgage completely. Additionally, you would direct all streams of income (direct deposit of paycheck, etc) into the new administrative account. Likewise, you would authorize the administrative account to make payments on the HELOC and to service non- residential debt on a regular basis. ( school loan debt, car loan debt, credit card debt, etc.) The concept is marketed to you as a means of paying principal owed on the residential debt in an earlier fashion than you understand is available to you now with your current mortgage. The administrative account would accomplish this by frequently (perhaps daily?) making additional principal payments on your residential loan from whatever excess funds remain in the administrative account after the monthly cycle of debt service has been satisfied. I find the concept laudable, and simple to administer from your side, but I would have some discomfort about the frequent transactions and the accuracy of the additional small extra principal payments. There are simpler, surer ways to accomplish your goal of accelerated principal payments. What is not clear to me is whether you realize the high degree of probability that you can already make additional principal payments to your existing mortgage. You stated that at the time that you bought the house, you borrowed $100K for the $233K purchase. That means that your down payment was $133K, right ? That is a significant down payment, and I don't understand how you must wait 10 years before being able to make any principal payments against the balance borrowed at the time of purchase, unless your mortgage requires only interest-only payments for the first 10 years. In any event, I don't think you can be penalized for pre- paying principal. Back to the concept of the loan you inquired about - What is not mentioned in the article is the nature of HELOC loans, but I would strongly suggest you think clearly before you make a HELOC loan, particularly if your commendable goals of reducing debt early are as stated, as HELOC loans are like crack cocaine to an undisciplined borrower. Their primary effect as a profitable financial product is to tempt homeowners to finance current living with long-term debt. The line of credit can increase with increases in the value of the home, and many people over the past decade have continued to draw from the HELOC as housing prices rose, again, funding current expenditures with the HELOC, which was increased with increasing equity of a booming housing market. Although long-term appreciation is a reality for real estate, I would not be surprised if the value of real estate remains flat for a decade or more, and perhaps the recent significant declines in real estate value will continue for a good part of the next decade, as well. Houses are a good place to rest, but not necessarily a good investment vehicle, particularly if one buys at the peak of a market. I would suggest avoiding the temptation of a HELOC loan by refusing to be enticed. Re-read you loan document to determine if there are any prohibitions against pre- payment of principal. I doubt it. There are safer ways to pay the principal early than a HELOC. Create an amortization schedule for your existing loan - just Google 'home-loan amortization schedule'. Type in your loan rate, and term, and you'll discover the principal payment each month for your existing loan. If you want to decrease the life of your loan by half, say, from 30 to 15 years, each month simply make an additional principal payment for the amount of principal that will be due on the next month's payment schedule. Each month, the amount will increase
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, mainstream20016 mainstream20016@ wrote: Mark, First of all, congratulations, for living in Colorado. I hope you experience the inspirational beauty of the Rockies every day. I long ago vowed that I would live in Colorado when I got my life together. I'm not there yet, but perhaps one day I'll live NW of Boulder, perhaps in or near Ward, or Allenspark. Where in Colorado do you live? Anyway, back to your inquiry. I'm no money pro, but like so many, I regard my own opinion highly, and I'd like to offer my $.02 regarding your inquiry 'home loan alternative'. The stated concept, as I understand it, is to simplify the administration of debt service and maximize the use of your money. The stategy is accomplished by creation of an account to which all streams of income are directed and from which all debt service is paid. Such an account would be created at the same time that you create a new mortgage, specifically a Home Equity Line of Credit. ( HELOC ). Practically speaking, you'd take out a HELOC, the proceeds of which would pay off the existing mortgage completely. Additionally, you would direct all streams of income (direct deposit of paycheck, etc) into the new administrative account. Likewise, you would authorize the administrative account to make payments on the HELOC and to service non- residential debt on a regular basis. ( school loan debt, car loan debt, credit card debt, etc.) The concept is marketed to you as a means of paying principal owed on the residential debt in an earlier fashion than you understand is available to you now with your current mortgage. The administrative account would accomplish this by frequently (perhaps daily?) making additional principal payments on your residential loan from whatever excess funds remain in the administrative account after the monthly cycle of debt service has been satisfied. I find the concept laudable, and simple to administer from your side, but I would have some discomfort about the frequent transactions and the accuracy of the additional small extra principal payments. There are simpler, surer ways to accomplish your goal of accelerated principal payments. What is not clear to me is whether you realize the high degree of probability that you can already make additional principal payments to your existing mortgage. You stated that at the time that you bought the house, you borrowed $100K for the $233K purchase. That means that your down payment was $133K, right ? That is a significant down payment, and I don't understand how you must wait 10 years before being able to make any principal payments against the balance borrowed at the time of purchase, unless your mortgage requires only interest-only payments for the first 10 years. In any event, I don't think you can be penalized for pre- paying principal. Back to the concept of the loan you inquired about - What is not mentioned in the article is the nature of HELOC loans, but I would strongly suggest you think clearly before you make a HELOC loan, particularly if your commendable goals of reducing debt early are as stated, as HELOC loans are like crack cocaine to an undisciplined borrower. Their primary effect as a profitable financial product is to tempt homeowners to finance current living with long-term debt. The line of credit can increase with increases in the value of the home, and many people over the past decade have continued to draw from the HELOC as housing prices rose, again, funding current expenditures with the HELOC, which was increased with increasing equity of a booming housing market. Although long-term appreciation is a reality for real estate, I would not be surprised if the value of real estate remains flat for a decade or more, and perhaps the recent significant declines in real estate value will continue for a good part of the next decade, as well. Houses are a good place to rest, but not necessarily a good investment vehicle, particularly if one buys at the peak of a market. I would suggest avoiding the temptation of a HELOC loan by refusing to be enticed. Re-read you loan document to determine if there are any prohibitions against pre- payment of principal. I doubt it. There are safer ways to pay the principal early than a HELOC. Create an amortization schedule for your existing loan - just Google 'home-loan amortization schedule'. Type in your loan rate, and term, and you'll discover the principal payment each month for your existing loan. If you want to decrease the life of your loan by half, say, from
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, mainstream20016 mainstream20016@ wrote: Mark, First of all, congratulations, for living in Colorado. I hope you experience the inspirational beauty of the Rockies every day. I long ago vowed that I would live in Colorado when I got my life together. I'm not there yet, but perhaps one day I'll live NW of Boulder, perhaps in or near Ward, or Allenspark. Where in Colorado do you live? Anyway, back to your inquiry. I'm no money pro, but like so many, I regard my own opinion highly, and I'd like to offer my $.02 regarding your inquiry 'home loan alternative'. The stated concept, as I understand it, is to simplify the administration of debt service and maximize the use of your money. The stategy is accomplished by creation of an account to which all streams of income are directed and from which all debt service is paid. Such an account would be created at the same time that you create a new mortgage, specifically a Home Equity Line of Credit. ( HELOC ). Practically speaking, you'd take out a HELOC, the proceeds of which would pay off the existing mortgage completely. Additionally, you would direct all streams of income (direct deposit of paycheck, etc) into the new administrative account. Likewise, you would authorize the administrative account to make payments on the HELOC and to service non- residential debt on a regular basis. ( school loan debt, car loan debt, credit card debt, etc.) The concept is marketed to you as a means of paying principal owed on the residential debt in an earlier fashion than you understand is available to you now with your current mortgage. The administrative account would accomplish this by frequently (perhaps daily?) making additional principal payments on your residential loan from whatever excess funds remain in the administrative account after the monthly cycle of debt service has been satisfied. I find the concept laudable, and simple to administer from your side, but I would have some discomfort about the frequent transactions and the accuracy of the additional small extra principal payments. There are simpler, surer ways to accomplish your goal of accelerated principal payments. What is not clear to me is whether you realize the high degree of probability that you can already make additional principal payments to your existing mortgage. You stated that at the time that you bought the house, you borrowed $100K for the $233K purchase. That means that your down payment was $133K, right ? That is a significant down payment, and I don't understand how you must wait 10 years before being able to make any principal payments against the balance borrowed at the time of purchase, unless your mortgage requires only interest-only payments for the first 10 years. In any event, I don't think you can be penalized for pre- paying principal. Back to the concept of the loan you inquired about - What is not mentioned in the article is the nature of HELOC loans, but I would strongly suggest you think clearly before you make a HELOC loan, particularly if your commendable goals of reducing debt early are as stated, as HELOC loans are like crack cocaine to an undisciplined borrower. Their primary effect as a profitable financial product is to tempt homeowners to finance current living with long-term debt. The line of credit can increase with increases in the value of the home, and many people over the past decade have continued to draw from the HELOC as housing prices rose, again, funding current expenditures with the HELOC, which was increased with increasing equity of a booming housing market. Although long-term appreciation is a reality for real estate, I would not be surprised if the value of real estate remains flat for a decade or more, and perhaps the recent significant declines in real estate value will continue for a good part of the next decade, as well. Houses are a good place to rest, but not necessarily a good investment vehicle, particularly if one buys at the peak of a market. I would suggest avoiding the temptation of a HELOC loan by refusing to be enticed. Re-read you loan document to determine if there are any prohibitions against pre- payment of principal. I doubt it. There are safer ways to pay the principal early than a HELOC. Create an amortization schedule for your existing loan - just Google 'home-loan amortization schedule'. Type in your loan rate, and term, and you'll discover the principal payment each month for your existing loan. If you want to decrease the life of your loan by half, say, from 30 to 15 years,
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: --- In FairfieldLife@yahoogroups.com, mainstream20016 mainstream20016@ wrote: Mark, First of all, congratulations, for living in Colorado. I hope you experience the inspirational beauty of the Rockies every day. I long ago vowed that I would live in Colorado when I got my life together. I'm not there yet, but perhaps one day I'll live NW of Boulder, perhaps in or near Ward, or Allenspark. Where in Colorado do you live? Anyway, back to your inquiry. I'm no money pro, but like so many, I regard my own opinion highly, and I'd like to offer my $.02 regarding your inquiry 'home loan alternative'. The stated concept, as I understand it, is to simplify the administration of debt service and maximize the use of your money. The stategy is accomplished by creation of an account to which all streams of income are directed and from which all debt service is paid. Such an account would be created at the same time that you create a new mortgage, specifically a Home Equity Line of Credit. ( HELOC ). Practically speaking, you'd take out a HELOC, the proceeds of which would pay off the existing mortgage completely. Additionally, you would direct all streams of income (direct deposit of paycheck, etc) into the new administrative account. Likewise, you would authorize the administrative account to make payments on the HELOC and to service non- residential debt on a regular basis. ( school loan debt, car loan debt, credit card debt, etc.) The concept is marketed to you as a means of paying principal owed on the residential debt in an earlier fashion than you understand is available to you now with your current mortgage. The administrative account would accomplish this by frequently (perhaps daily?) making additional principal payments on your residential loan from whatever excess funds remain in the administrative account after the monthly cycle of debt service has been satisfied. I find the concept laudable, and simple to administer from your side, but I would have some discomfort about the frequent transactions and the accuracy of the additional small extra principal payments. There are simpler, surer ways to accomplish your goal of accelerated principal payments. What is not clear to me is whether you realize the high degree of probability that you can already make additional principal payments to your existing mortgage. You stated that at the time that you bought the house, you borrowed $100K for the $233K purchase. That means that your down payment was $133K, right ? That is a significant down payment, and I don't understand how you must wait 10 years before being able to make any principal payments against the balance borrowed at the time of purchase, unless your mortgage requires only interest-only payments for the first 10 years. In any event, I don't think you can be penalized for pre- paying principal. Back to the concept of the loan you inquired about - What is not mentioned in the article is the nature of HELOC loans, but I would strongly suggest you think clearly before you make a HELOC loan, particularly if your commendable goals of reducing debt early are as stated, as HELOC loans are like crack cocaine to an undisciplined borrower. Their primary effect as a profitable financial product is to tempt homeowners to finance current living with long-term debt. The line of credit can increase with increases in the value of the home, and many people over the past decade have continued to draw from the HELOC as housing prices rose, again, funding current expenditures with the HELOC, which was increased with increasing equity of a booming housing market. Although long-term appreciation is a reality for real estate, I would not be surprised if the value of real estate remains flat for a decade or more, and perhaps the recent significant declines in real estate value will continue for a good part of the next decade, as well. Houses are a good place to rest, but not necessarily a good investment vehicle, particularly if one buys at the peak of a market. I would suggest avoiding the temptation of a HELOC loan by refusing to be enticed. Re-read you loan document to determine if there are any prohibitions against pre- payment of principal. I doubt it. There are safer ways to pay the principal early than a HELOC. Create an amortization schedule for your existing loan - just Google 'home-loan amortization
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
Mark, Thank you for the compliment, re: great info. With no pre-payment penalties, you can pre-pay the principle each month routinely. To make the sacrifice more palatable, review the amortization schedule. Look for next month's entry. The principle amount that will be due next month will be clearly stated. On the same line will appear the interest amount that will be due next month. For every pre- paid principle amount you make, you automatically save the amount listed as interest for that same month ! By viewing each month's extra principle payment and the interest saved, one can gain satisfaction from the process. I suggest writing a separate check for the extra- principle payment, and clearly stating on the check that it is to be applied only to the principle balance. If you send a coupon with your regular mortgage payment, write the extra- principle payment amount in the appropriate box on the coupon, and send both checks and the coupon together. That way you prevent the mortgage administrator from erroneously applying your extra principle payment incorrectly, (such as to your escrow account, where it will not give you the effect you seek). You might want to check out 'The Banker's Secret', by Mark Eisenson, Villard publishers. It gives motivation to pre-pay mortgage interest. Your monthly statement might reflect your pre-payment actions. If not, Every couple of years, you can request a payment history to give you comfort that your actions are recorded properly by the mortgage administrator. mainstream Again thanks for this. I'll go ahead and do as you suggested regarding how the payments are posted. I'm using an automatic payment from a checking account but will make sure the payments are applied to the principle. I'm not taking any tax deductions at this time because I have no taxable income. Take care, Mark
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, suziezuzie [EMAIL PROTECTED] wrote: This is totally off the topic so I expect some really, good off the topic responses. I bought a house two years ago here in beautiful Colorado and throughout that time, the more I thought about the loan, the madder I started getting, specifically, paying all the interest up front. I borrowed a little over $100K and came up with the rest. The total cost of the house was $233,000. What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest.
[FairfieldLife] Re: Home Loan Alternative
--- In FairfieldLife@yahoogroups.com, new.morning [EMAIL PROTECTED] wrote: --- In FairfieldLife@yahoogroups.com, suziezuzie msilver1951@ wrote: This is totally off the topic so I expect some really, good off the topic responses. I bought a house two years ago here in beautiful Colorado and throughout that time, the more I thought about the loan, the madder I started getting, specifically, paying all the interest up front. I borrowed a little over $100K and came up with the rest. The total cost of the house was $233,000. What these banks do is charge you all the interest up front. The banks are not front-loading interest. They are charging interest on a pay-as-you-go basis. That is, they are charging interest on the outstanding principal. No more, no less. As the principal declines, so does the interest on the remaining principal. For example, in the last boom phase of the real estate market, interest only loans were prevalent --- at least they were interest only for the first 5 years or so of the loan. Thus, for a $100,000 principal, $6,000 of interst would be paid (assuming annual payments -- a simplification for this example.) For five years, no principal is paid off. On the other had, a 30 year loan requires / allows the payment of the same interest as above, plus some repyament of principal, structured so that the full principal is paid off in 30 years. Again following the same principle, that interest is charged on the outstanding principal in each payment period. A 15 year loan pays back more principal each payment period. A 5 year loan even more so. If you want to pay less interest, simply pre-pay down your principal each month. If the mortgage payment is $1000, pay that, plus $500/ month principal paydown. You will end up shortening the term of the loan -- and end up paying less interest. Your loan payment goes up, your principal goes down and your taxes go up, you chose.
[FairfieldLife] Re: Home Loan Alternative - my $.02 - long
Mark, First of all, congratulations, for living in Colorado. I hope you experience the inspirational beauty of the Rockies every day. I long ago vowed that I would live in Colorado when I got my life together. I'm not there yet, but perhaps one day I'll live NW of Boulder, perhaps in or near Ward, or Allenspark. Where in Colorado do you live? Anyway, back to your inquiry. I'm no money pro, but like so many, I regard my own opinion highly, and I'd like to offer my $.02 regarding your inquiry 'home loan alternative'. The stated concept, as I understand it, is to simplify the administration of debt service and maximize the use of your money. The stategy is accomplished by creation of an account to which all streams of income are directed and from which all debt service is paid. Such an account would be created at the same time that you create a new mortgage, specifically a Home Equity Line of Credit. ( HELOC ). Practically speaking, you'd take out a HELOC, the proceeds of which would pay off the existing mortgage completely. Additionally, you would direct all streams of income (direct deposit of paycheck, etc) into the new administrative account. Likewise, you would authorize the administrative account to make payments on the HELOC and to service non- residential debt on a regular basis. ( school loan debt, car loan debt, credit card debt, etc.) The concept is marketed to you as a means of paying principal owed on the residential debt in an earlier fashion than you understand is available to you now with your current mortgage. The administrative account would accomplish this by frequently (perhaps daily?) making additional principal payments on your residential loan from whatever excess funds remain in the administrative account after the monthly cycle of debt service has been satisfied. I find the concept laudable, and simple to administer from your side, but I would have some discomfort about the frequent transactions and the accuracy of the additional small extra principal payments. There are simpler, surer ways to accomplish your goal of accelerated principal payments. What is not clear to me is whether you realize the high degree of probability that you can already make additional principal payments to your existing mortgage. You stated that at the time that you bought the house, you borrowed $100K for the $233K purchase. That means that your down payment was $133K, right ? That is a significant down payment, and I don't understand how you must wait 10 years before being able to make any principal payments against the balance borrowed at the time of purchase, unless your mortgage requires only interest-only payments for the first 10 years. In any event, I don't think you can be penalized for pre-paying principal. Back to the concept of the loan you inquired about - What is not mentioned in the article is the nature of HELOC loans, but I would strongly suggest you think clearly before you make a HELOC loan, particularly if your commendable goals of reducing debt early are as stated, as HELOC loans are like crack cocaine to an undisciplined borrower. Their primary effect as a profitable financial product is to tempt homeowners to finance current living with long-term debt. The line of credit can increase with increases in the value of the home, and many people over the past decade have continued to draw from the HELOC as housing prices rose, again, funding current expenditures with the HELOC, which was increased with increasing equity of a booming housing market. Although long-term appreciation is a reality for real estate, I would not be surprised if the value of real estate remains flat for a decade or more, and perhaps the recent significant declines in real estate value will continue for a good part of the next decade, as well. Houses are a good place to rest, but not necessarily a good investment vehicle, particularly if one buys at the peak of a market. I would suggest avoiding the temptation of a HELOC loan by refusing to be enticed. Re-read you loan document to determine if there are any prohibitions against pre- payment of principal. I doubt it. There are safer ways to pay the principal early than a HELOC. Create an amortization schedule for your existing loan - just Google 'home-loan amortization schedule'. Type in your loan rate, and term, and you'll discover the principal payment each month for your existing loan. If you want to decrease the life of your loan by half, say, from 30 to 15 years, each month simply make an additional principal payment for the amount of principal that will be due on the next month's payment schedule. Each month, the amount will increase slightly, but the earlier in the life of the loan you start, the greater impact your additional principal payment. By making additional