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Mortgage interest is an expense that all
mortgage debtors must pay in exchange for
the privilege of borrowing money. But if you
are careful, you can avoid overpaying your
mortgage interest!
Mortgagors across the US were surprised to hear of a recent poll that found that 97% of domestic homeowners are overpaying millions of dollars each month in mortgage interest.
This poll was conducted to help determine how many homeowners are taking advantage of the pre-payment opportunity in our mortgage system, which eliminates costly interest overpayments.
The surprising results showed only 3% of America’s homeowner population utilize this loophole and take advantage of the valuable benefits created by it.
Sean Drover, a Chicago businessman and homeowner, was appalled when he discovered that he was overpaying $217 in mortgage interest each and every month.
“If I would have known about the pre-payment loophole when I first bought my home I could have put all that money into equity instead of my lenders pocket.”, said Drover.
The mortgage interest pre-payment loophole results from what the banking industry calls “front loading”, which is when the majority of a homeowner’s payment is applied towards the interest on the loan instead of the original loan amount.
Front loading ensures that you’ll pay over three times the original amount of the mortgage, resulting in enormous profits coming straight out of your pocket and into those of your lender.
Most mortgagors never stop and take a close look at how one-sided the system really is. Unfortunately, it’s simply the way conventional mortgages are structured here in the USA.
The average homeowner overpays $60,000 in mortgage interest. In fact, the average homeowner in America overpays $2,000 in mortgage interest each year, or $60,000 over the life of a thirty year mortgage.
“That’s an enormous amount of money” says mortgage analyst Craig Romero. “This is money that homeowners are needlessly throwing away each year. Imagine what you could do with an extra $60,000!"
While gaining back thousands of dollars from these overpayments is an enormous benefit, it’s not the only one. Shaving up to ten years from the term of a traditional mortgage is also another major advantage of pre-payment.
“I’ve been using the pre-payment loophole for several years” says Denver homeowner Curtis Landau. “I’ve actually been able to remodel my home and pocket about $25,000, all from the equity that was built up so quickly.”
Americans need to understand that this pre-payment loophole isn’t something lenders are eager to share with their customers. If they did, they would realize a huge cut in profits.
With over 50 million mortgages in force today, it’s estimated that borrowers overpay their lenders in excess of $12 billion every year. It’s no wonder the pre-payment loophole is kept secret!
Additional Resources:
Mortgage
Interest Rates
Craig Romero is a mortgage analyst and author. He is dedicated to helping homeowners make the most of their mortgage investment. Visit him at WiseMorgtgageInfo.com.
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