What the book actually used that example for was to show that the tax deduction for mortgage interest paid alone is not worth maintaining a large balance on your mortgage. The tax deduction will help ease the pain, but it will never make up for the money you spent paying interest. A house is definitely a great investment but why pay more more money in interest than you have to? Home equity loans
This is a revolutionary book. In fact, it’s already revolutionized the Australian banking industry.
I’ve implemented this system already. I opened a new HELOC account (no application fee or closing costs required). I have not cut down on my expenses or factored in any increases in my income, nor am I refinancing my current mortgage.
All told, my investment to make this work was the $25 for the book and that was it.
How much will I be saving? $236,445
___________________
The traditional way
Interest rate: 6.250%
Time left on mortgage: 28 years
My current mortgage amount: $285,000
Total cost of interest: $323,996
Total cost of the mortgage: $609,318
______________________
Using Harj’s System
Interest rate (same): 6.250%
Time to pay off: 11 years, 5 months
Total cost of interest: $88,943
Total cost of the mortgage: $371,480
________________________________
Total Time Saved: 19 years 7 months
Total Interest Saved : $236,445
My only caveat is if you are going to use this system, you need to be disciplined enough to track your expenses monthly and stick to that. If you can do that, you too can easily save thousands of bucks on your mortgage!
More information at How to Own Your Home Years Sooner – without making extra interest payments
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