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1
Learn about simulated biweekly mortgages.
Imagine
what would happen if, instead of making 12 monthly payments in a
year, the equivalent of 13 payments
were made, with the 13th payment being applied
entirely toward reducing the unpaid balance. Let's use our
same mortgage example of a 30-year, $100,000
mortgage at 8.5% interest.
Without the 13th payment, the unpaid balance would only be reduced
by about $755.92 during the
first year. By making that 13th payment
the unpaid balance will reduce by an additional
$768.91, which in turn
will reduce the amount of interest charged in subsequent months.
The bottom line is: if this example were your
mortgage, you
would save $50,650.24 in interest and pay off your mortgage in 22
years, 9 months instead of 30
years!
This is how the Mortgage Payoff Acceleration
Program works. Every two weeks, one-half of your
monthly payment is electronically transferred from your bank (depending
upon the state you live in) to either a newly established checking
account in your name at First National
Bank of Florida or a trust account held at one of
America's largest consumer banks, Tower
Administration. Once a month, one week prior to
the due date, the monthly payment is automatically sent to your
mortgage lender.
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