|Mortgage Savings Account|
Take control of your mortgage and gain true home ownership quickly with a simple yet powerful concept imported from Australia and Europe that now allows you too to eliminate 10, 15, even 20 years off your mortgage term.
Now that the real estate bubble has burst, how do you continue to build wealth when you can no longer count on appreciating home values?
Replace the rapid rate of appreciation of your home over the last few years with the rapid reduction of your loan balance within the next few years. This would not only help build the same type of equity in your home as before but also benefit you by making you a true home owner, mortgage free, in a much shorter amount of time.
No need to change your current spending habits. Taking advantage of a mortgage-backed checking account is all you need.
Why We Aren't Mortgage-Free
With a traditional mortgage, known as a closed-end loan, the bank will only apply a full payment to adjust your principle balance and once you make that payment, the money essentially leaves your wallet.
If you wanted to reduce your loan balance by making an additional mortgage payment the money paid could then not be tapped if an emergency were to arise. So, most people are reluctant to make any additional payments leaving their money in the bank not earning any interest, while maintaining a mortgage balance that shrinks very slowly.
How to Terminate Your Mortgage
Using a New Age Mortgage Savings Account (MSA) you can profit from reducing your loan balance at a faster pace than with a traditional mortgage.
A New Age Mortgage Savings Account is basically a Home Equity Line, an open-end loan where adjustments to the principle balance occur multiple times per month, married to your checking account since the account is used to pay all your bills.
Since the MSA account replaces your current checking account, you would deposit your paychecks into the MSA account just like you would into your current checking account, paying your bills and showing a positive balance at the end of the month. By taking advantage of that balance in the MSA along with the interest saved by paying down your mortgage in an accelerated fashion you dramatically eat away at your mortgage balance, reducing the time needed to pay off your mortgage by 10, 15 or even 20 years.
How a Mortgage Savings Account Works
MSA Sample Documents
|Use this worksheet to calculate the savings for your own personal situation. If you need any assistance or have any questions, please contact us and one of our counselors are ready to help you.|
NOTE: No username and password required.
You obtain a New Age Mortgage Savings Account (MSA) with a credit line of $20,000, at a rate of 7% amortized over 30 years and due in 10 years. For our example, monthly family income is $7,000 and monthly family expenses are $5,000 including payment on the first mortgage.
Please follow the explanation below along with the example amortization tables to the right (clicking on the links will open a new window).
Notes on first month activity
|One-time loan fee:||$3,500|
|MSA balance mid-month:||$8,500|
|MSA balance at the end of month 1:||$1,500|
The interest charged on the Mortgage Savings Account is covered with the deposit of your $7000 in paychecks, so you donít have to make any additional monthly payments on the MSA. Interest will be charged only on the $1,500 balance at the end of the month.
|MSA balance at the end of month 1:||$1,500|
|Pay down 1st mortgage:||$5,000|
|MSA balance mid-month:||$11,500|
|MSA balance at the end of month 2:||$4,500|
Your First Mortgage (also known as a first trust deed, or first TD) has the following components:
REALLY BIG SAVINGS REALIZED
|Initial Principal Balance:||$200,000|
|Interest Rate:||5% fixed|
|Term of the Loan:||30 years|
|Monthly Payments, Principal and Interest:||$1,073.64|
After paying down your first TD by $5,000 your loan balance is now reduced to $195,000
Payments over 30 years on a $200,000 loan equal to $1,073.64 x 360 = $386,510.40
Payments over 341* months on a $195,000 loan equal to $1,073.64 x 341* = $366,111.24
*341: number of months needed to pay off the loan compared to the original 360 months
With just a single $5,000 investment you have saved $20,399.16
= ($386,510.40 - $366,111.24)
You saved not only in total interest but also in the time needed to completely pay off your loan, in 341 months compared to 360 months, saving over 1.5 years in payments.
By continuing to deposit your income into the Mortgage Savings Account and leveraging your $2,000 monthly discretionary income, the balance in the MSA stands at only $500 two months later. This provides another opportunity to pay down another $5000 on your first TD during the next month using your MSA checking account.
EYE-POPPING SAVINGS BY MONTH FIVE
|MSA balance at the start of the month:||$500|
|Pay down 1st mortgage:||$5,000|
|MSA balance at the end of month 5:||$3,500|
Principal balance on first TD is now $188,725.60
Original loan of $200,000 with payments of $1,073.64 x 360 = $386,510.40
New loan balance of $188,725.60 with payments of $1,073.64 x 323* = $346,785.72
*323: number of months needed to pay off the loan compared to the original 360 months
Add the 4 months of payments already made, ($1,073.64 x 4) + $346,785.72 = $351,080.28
Total savings: $35,430.12
= ($386,510.40 - $351,080.28)
How Soon Can I Pay Off My Mortgage?
Can you appreciate the true power of a Mortgage Savings Account? Be one of the first Homeowners to grasp and take advantage of this amazing and revolutionary concept, so simple, yet so powerful. This one concept will change your life forever by:
- Giving you control over your mortgage
- Wrestling the power of interest away from the banks and using to your advantage
- Making you a true homeowner in an accelerated period of time eliminating up to 3/4 of the time needed to pay off your mortgage
- Providing a substitute for home equity growth that replaces the appreciation seen during the last few years
In the example provided, your $200,000 loan will be paid off in 6 years and 2 months with a total savings in interest of:
- Interest paid over 30 years: $186,508.38
- Interest paid during the 6 years 2 months: $33,214.72
- Total Interest Savings: $153,293.66
Consider how much interest you paid on the MSA during this period (6 years 2 months), only $1,442.79*. When all factors are considered, you still saved $151,850.87. (*This amount was calculated on the month end balance. Your interest will vary slightly depending on the days of usage of the outstanding loan amount each month.)
For you to realize the maximum amount of benefit from a Mortgage Savings Account you must commit to using all your discretionary income into paying down your first mortgage as well as keeping a minimum balance on your MSA. Of course, in real life you will have months where you just donít have any discretionary income, but even if you skip paying down your first mortgage a few times, you can see how easily you can pay off a traditional 30 year loan in a third of the time or sooner.
Your Next Step to Realizing These Savings
|A simplified version of the full application used to obtain a snapshot of your situation and what you are looking to accomplish.|
|The full "1003" standard residential loan application. We suggest this application only for those with some home loan experience, such as experienced real estate investors.|
|Have questions, need some clarification, or simply you would rather apply for a Mortgage Savings Account by phone or in person... we are always eager to help our customers.|
New Age Mortgage
Phone: 877-398-1375 ·
Fax: 866-794-9126 ·