How You Can Be Mortgage-Free

Imagine tens of thousands of dollars you can save in interests if you can pay off your mortgage faster
Imagine the financial freedom that you will have if you are mortgage-free
You will know the fastest way to pay off your mortgage (and other debts)
You will know how long it will take to pay off your mortgage
We customize the analysis based on your financial situation
You are in full control in following the recommendation that we provide you with
None of these is anything new, so why haven’t other loan officers said anything to you?

Everyone knows they need to save for retirement, but many homeowners aren’t saving enough. It is our responsibility to help you understand your current savings rate and make mortgage decisions that will help you achieve your future goals. One important goal is your Freedom Point: It is the point at which you are either debt-free or your assets exceed your debts and paying off your mortgage becomes a strategic financial planning decision. Our mortgage plan shows you how you can achieve your Freedom Point as quickly as possible.

There are two ways by which you can arrive at your Freedom Point. The first option is called Term Reduction. It allows you to accelerate debt reduction by prepaying your mortgage with extra monthly or annual payments. This is a safe strategy that has a predictable return on investment.

The second option is called Asset Accumulation. It allows you to invest in an investment account that accumulates your assets. The return on investment depends on the investment vehicle that you choose. We will work with your financial advisor to determine the type of investment that is appropriate for you.

		You may be asking, “Where can I come up with the money that is needed to prepay my mortgage or to invest?” This is why Total Cost Analysis is so critical in your financial and mortgage planning: The lowest cost mortgage option provides you the savings that you need to achieve your Freedom Point faster.

Let’s see how we can help you accelerate your Freedom Point:

This is the first method that we use to help you reach your Freedom Point faster: Asset Accumulation. You may recall from the Total Cost Analysis example the 5/1 ARM option gives you a saving of $372 each month (circled in blue). In this strategy, we recommend you to invest that amount every month in an investment. You can choose the investment with your financial adviser and we will be happy to work with that person. For the sake of illustration, let’s assume the yearly rate of return is 5%, which is quite conservative. In this example, this investment grows to $25,298 after five years and $57,631 after ten years. In 17.92 years (circled blue), you will be able to pay off your mortgage and be mortgage-free.

Another advantage of the Asset Accumulation strategy is that it is especially helpful for adjustable rate mortgages. If the rate adjusts higher, the money that is available in this investment account can soften the impact of a higher monthly payment.

Here is a two-minute video that gives you an overview of Freedom Point.

The second method is called Term Reduction. Instead of investing the $372 monthly saving (circled blue), you will use it as extra payments to your mortgage. In this example, you will reach your Freedom Point in 18.92 years (circled blue) and you will save $59,980 in interest.