A Brief Introduction to Mortgage Acceleration
Historically, homeowners refinanced their first mortgage roughly every five years and stayed in their homes for about seven years. As you probably know, the mortgage payment is the sum of two separate components: the interest expense portion of the payment that goes to the lender, and the portion of the payment that is going to be used to reduce the principal amount of the loan so that it can be repaid within a certain timeframe.
At the beginning of the loan term, over 99% of the mortgage payment is comprises of interest paid to the lender.
In the five to seven years you can be expected to have your existing mortgage, over 80% of the total of the mortgage payments made is allocated for interest paid to the lender. This also means that the amount paid in interest is almost four times the amount paid to reduce the principal!
At roughly 18 ½ years, the amount of the payment that goes to principal and interest is about even. After that time, proportionately more of the payment goes towards reducing the principal amount of the loan.
The banks get their cut first – that is the way loans work. And we have been conditioned by lenders to think that having a perpetual mortgage payment is just a part of life. Nothing is further from the truth!
In fact, did you know that most homeowners make at least 45-50 years of mortgage payments throughout their life?
This side-by-side comparison shows the typical results of following a traditional mortgage payment schedule vs. using the 7YearMAP® process*:
This side-by-side comparison of a traditional mortgage repayment shows you how much you can accelerate your mortgage by using our system.
| 30-year fixed rate load @ 6% APR | 7YearMAP®'s | Traditional Program |
| Starting Balance for 1st Mortgage | 350,000 | 350,000 |
| 1st Mortgage Balance in 1 year | 328,250 | 345,700 |
| 1st Mortgage Balance in 7 years | 17,800 | 313,700 |
| Total Interest paid in 7 years | 87,230 | 140,000 |
| Total Interest Saved over life of loan | 318,000 | 0 |
| Time to Pay Off Mortgage | Just over 7 years | 30 years |
| Interest cost as a % of total payments | 20% | 54% |
*Please note that while these results are typical, as every household has a unique budget, no two households will have the same results. We’ve seen the MA process take as long as 13 years – and as little as 3 years.
To find out what your results can be, please use the “Free Analysis” tab at the top of the page. This will typically give you a worst-case scenario.
For a fully complete and personalized analysis using the full power and functionality of the 7YearMAP® engine, register for a no-obligation, FREE trial by using the "About/Contact" tab above. Don’t forget to request your FREE Mortgage Acceleration whitepaper and Bonus Report!