Accelerate Mortgage Payments to Plug the Hole in Your Nest Egg

If you are planning to pay off your mortgage, making acceleration mortgage payments may be the most effective way to pay off your mortgage faster and save thousands of dollars before you retire.

There are many ways to paying off your mortgage, know that the gateway to living a debt free life is to decide that you want to be debt-free and that youre willing to do whatever it takes for you to live that kind of life.

Accelerating mortgage payments allows you to escape from the risks that come with investing in the stock market. When you pay off your mortgage debt, you will be able to spend all the extra cash you get from your employer the way you like. Thus, paying off your mortgage and accelerated mortgage payments are seen to be wise financial strategies.

There actually are a couple of benefits that paying off your mortgage will allow you to enjoy. If you decide to spend a little more from what you are earning, youll be able to live a debt-free life in no time. A settled mortgage debt is synonymous to having extra cash left to spend at the end of every month. Talk about spending a lifetime of financial independence.

There is no better feeling in the world than not sending a check to your bank for the mortgage payments every month. For some of us this mortgage payment may mean 30 to 40% of our paycheck that goes directly to mortgage debt each month.

The biggest obstacle to paying off your debt may be your monthly financial commitments.

Because banks tend to design mortgage payment processes to be favorable only to them, you can be assured that you are not alone in this kind of situation.

Even if you spend extra money on mortgage remittances at the beginning of the term, you would later find out that most of it goes to mortgage interest. This somewhat annoying fact will later make you decide against paying off your mortgage ahead of and time.

There is, however, a technique that will allow you to make accelerated mortgage payments, get your mortgage paid off 13 years earlier, and lets you save more than $63,000.

They call this accelerated mortgage payment technique mortgage acceleration.

Mortgage acceleration is a payment system that helps you make sure that you will not be incurring additional expenses when you pay off your mortgage faster. When you choose to pay off your mortgage using this method, you will be borrowing money from a low rate account to pay for mortgage which is regarded as a high rate account.

Take for instance, you already have two loan accounts, one at a rate 0f 3% and the other at 6%, would it be wise for you to borrow money from the 3% loan to get your 6% loan account settled?

Of course you would and you would end up saving thousands of dollars in the process.

Mortgage acceleration is a method that uses a home equity line of credit to pay off the first mortgage. The simple trick is done by depositing your money and paying your bills directly from the home equity line of credit which you can convert it to the HELOC that has a 3% interest rate. And when you borrow money in small chunks from your HELOC and pay it off to your mortgage, you could end up paying off your mortgage 13 years faster.

The best thing about this is that you dont have to go out of your way or have your mortgage refinanced just so you can get pay off your mortgage in full.

Discover How to Retire Debt Free With a Nice Nest Egg Too

Not so long ago most Americans retired debt free, or close to it, and it was considered the norm, but that was then. Right now however, a growing of Americans are entering retirement buried under staggering amounts debt, including home-equity lines of credit, partly paid off mortgages, credit card debt and auto loans.

For many decades, there was extraordinary asset growth and low interest rates, and that combination allowed people to increase their net worth easily and significantly, and that in turn, made the paying off of debts a relatively painless experience. It was always expected however, that the baby boomers would encounter a few bumps further down the road, but it was never seriously considered that the road might disappear completely!

Debt laden baby boomers have now become a major worry, and it's not surprising, given the facts.

Over a fifth (22%) of baby boomers presently owe at least $50,000 in non-mortgage debt, and just two short years ago, only 12% had debts of that magnitude. Right now, four out of ten baby boomers owe more than $25,000 in non-mortgage debt, compared with one third in 2007. According to various polls, the present recession has positively changed the way that many Americans are thinking and acting, and many Americans are now looking at ways to save money, and they're trying to pay off their car loans, credit cards, mortgages, home-equity loans and overdue bills. The big exception to the above, if you haven't yet guessed it, are the baby boomers. They believe that they'll retire debt free, and seem to think that it will somehow just miraculously happen.

Most of them are not willing to make any lifestyle changes.

If however, you're a baby boomer who realizes that there's going to be a problem if you don't make some changes fast, then here are four tips that will hopefully be helpful.

1) It might seem like a good idea to borrow money from your 401(k) to pay down your debts, but don't do it. It's a low cost solution and therefore seems like a great idea, but it could create real problems if you get laid off.

In almost every case, a person that stops work is required to pay off the loan within 60 days.

2) Work either full-time or part-time for as long as you're able, so as to eliminate as much debt as possible before you retire. Remind yourself from time to time, that paying a mortgage and trying to pay off debts at the same time, while living on a fixed income wouldn't be a whole lot of fun.

Do the work now, pay off the debts, and then retire.

3) Should you pay off debts, or save for retirement?

There are differing opinions on this one, but I'd suggest doing both at the same time.

It will obviously take longer to pay off the debts, but it also means that you'll have some money set aside for retirement, and the savings habit can be a real good one to get into. Once you start saving, your mindset will change and you'll start to think like an investor, and will become less prone to impulse purchasing.

Let's take a quick look at some figures, which will hopefully help to put things into perspective.

a) A debt of $15,000 at an interest rate of 24% would take five years to pay off, if you paid $432 per month.

b) However, you'd pay off the same debt, with the same interest rate in nineteen months if you paid $1000 per month.

If you went with (a) you'd be able to save $600 per month, and be debt free in five years, plus you'd have a nest egg of around $41,000 - assuming that you got 5% rate of return.

Going with (b) you'd have close to $45,000 in your retirement account, so on paper it looks like the best deal.

Most behavioral finance experts would recommend plan (a) however, because they believe that most people would lack the willpower to pay off their debts, as required.

4) Means looking at, and then probably changing your lifestyle, and your spending habits. For a pampered baby boomer, this is one of the most difficult things to do, and it's often suggested that one way to help break a lifetime habit of spending, is to to reward yourself every time you eliminate a piece of your debt.

If you have a partner, then it's really important that they want to get out of debt too, because if they don't then the odds are against you.

If you haven't got a partner right now, but might consider one, then try to make sure that he or she either has no debts, or at least shares your desire to be free from them.

Borrowers Should Get To Grips With Credit Report

Those looking to get a loan or access any other form of borrowing should get to grips with their credit report, it has been suggested.

According to Equifax, an increasing number of Britons are becoming concerned that their credit history may not be good enough to secure them a type of credit. The company's announcement follows a decision by credit card provider Egg closing 160,000 of its accounts because their customers do not have a good enough financial rating.

Following on from this it is possible that prospective borrowers are increasingly unable to get cheap loans or other cost-effective financial products.

Neil Munroe, external affairs director for Equifax, claimed that the move by Egg reflects the general tightening of access to loans and other types of credit throughout Britain. He said: "Since the credit crunch last summer, we have seen a number of lenders tightening their credit granting criteria with the result that some consumers have not been able to get the credit deals they wanted. This goes to reinforce the fact that credit is not a right - and that consumers need to understand what lenders are looking for when granting credit and operating credit card accounts."

The director pointed out that prospective borrowers must remember that money lenders not only want to ensure that customers can afford to make repayments but also look at them from a "profitability perspective". However, it was suggested that although access to credit is diminishing, taking out a copy of their financial history could assist borrowers in getting a loan or other borrowing product.

He added: "What Egg's decision does indicate more than anything is that consumers need to be as well informed as possible about how they look to a lender. Many consumers see the credit process as a complete mystery - something over which they have no control. But that doesn't have to be the case."

To help improve a credit file - which in turn may help to secure access to a cheap loan - Equifax advised consumers to ensure that they are registered on the electoral roll and that more than the minimum monthly repayments are made on credit agreements. By doing so the credit reference agency claimed that borrowers will be able to pay back their debts at greater speed and will be able to build up a positive repayment history. In addition, those who have gone through a change in circumstances, for instance being made redundant or getting divorced, which has seen them fall behind in making repayments, were advised to ensure that such alterations are reflected in their report.

For those concerned about their ability to manage their money over the course of 2008, applying now for a cheap loan could be advisable. In taking out this type of UK loan it is possible that consumers can meet a number of demands on their spending quickly and efficiently. However, getting a copy of their fiscal report beforehand may help borrowers to spot any discrepancies with their file, allowing them to rectify such errors with creditors and improve access to online loans.

Research carried out by Axa in December indicated that four million people think that problems in getting to grips with their finances have caused them to develop an adverse financial status. Those consumers who have a poor borrowing background but are confident they can now make repayments, however, could find that a bad credit loan is of assistance.

Avoid These Retirement Nest Egg 'Bandits'

After you have spent your whole life to date skimping and saving to accumulate enough funds with which to retire on, the last thing you want is to have them 'taken' from you, right? Unfortunately, there are many subtle and legal 'Bandits' that can rob you of your comfortable retirement.

All of these are perfect legal and most people give in to them willingly without thinking of the negative effect that they have on their nest egg. They have become routine expenses and are thought of as being minimal, but when you add them all together, their aggregate cost can be incredible!

Here are a few of the most obvious nest Egg 'Bandits'

Credit Card Interest

When you are on fixed income, you obviously need to also 'fix' your expenses so that you don't get into a negative situation. Whenever you use a credit card to purchase something that you don't have the cash for, you unconsciously agree to pay interest on that item in order to have it now. Debit cards, on the other hand, can be used at the same merchants to purchase products and services with the funds immediately withdrawn for your account. With a debit card, you never have to pay interest charges. For retirees on fixed income, credit card interest is perhaps the most violent of 'bandits'!

Brokerage Charges and Fees

When you invest your nest egg in stocks, bonds, index funds and mutual funds, there is usually a 'load' or brokerage fee or other thinly masked cost associated with the investments. You can research any mutual fund, stock fund, or index fund and look for their 'Expense Ratio". This is a number, expressed as a percentage that will be collected each year, out of you invested funds, for the honor and privilege of owning that particular account.

For mutual funds, this fee is somewhat higher since you have to pay for the team of people who routinely manage the fund on a daily basis. Since index funds are invested in a whole market segment, there is no management or research team and there is little buying and selling going on. Therefore, Index funds normally have Expense Ratios (.02% - .80%) considerably less than managed Mutual funds (1.2% - 3.4%). These fees can be 2% to 3% or more of your money and that's a pretty heavy load for you to carry when you are trying to live off of your investments.

After deducting fund's expenses from your profits, very few stock mutual funds have outperformed the index or the markets over the years. The broker's argument is that, through their careful management of your money, you earn considerably more in their fund than can be had elsewhere. That, in itself, may be true, but you must deduct the funds expenses before comparing. The only thing that is very certain is that they will deduct their fee from your funds!

Index funds are perhaps the best way of minimizing the expenses related to your nest egg investment. There are all sorts of index funds, Large Cap, Small Cap, Real Estate Investment Trusts (REIT's), Bonds, Emerging Markets, International, etc are just a few of the index fund types that are available with a very small expense ratio.

Service Contracts

Whenever you purchase an appliance or a car or some other 'big ticket' item, it is increasingly popular for the dealer or vendor to offer you an extended warranty on the product -for a fee. These typically extend the manufacturer's warranty for an additional period and can cost from 2% to 8% of cost of the product. More than 90% of extended warranties are never utilized and this is a very high profit item for the vendor. They routinely pay their salespeople very high commissions for selling these 'add-on' contracts.

Extended Warranties and Service Contracts are normally insurance products and the insurance company will pay the repair or replacement cost of the product should there be a problem after warranty expiration. By refusing all such extended warranty offers, you will likely save considerably more money than you will ever have to pay for out of warranty repairs. Avoid this Nest Egg 'Bandit'!

If you think about it, there are several of these bandits to avoid. If you do so, you can enhance your Nest Egg considerably! It is not difficult to do.

The Credit Card Debt Pay Off

There's a difference between taking control of your finances and letting your finances take control of you. The results vary, of course, but when finances - particularly financing involving credit cards - are taking control over an individual, debt is the awful and too familiar end result. Yet, at the same time and conversely so, one of the most tangible financial issues anyone can easily take complete control of, conquer and even, dare I say it, pay off, despite popular belief, are substantial amounts of credit card debt.
Don't Get Caught Up and Give Up
The worst thing a credit card indebted individual can do is get overwhelmed by their credit card debt, subsequently leaving it to sit and linger. This is major financial mistake number one; do not sit on credit card debt. You're not a hen and your debt is not an egg. Leaving credit card debt to stay stagnant and hence, accrue interest, is blocking off a clear path to future life options, particularly ones calling for polished financial standing. Financial goals such as buying a car or even owning a home could be jeopardized if credit card debt is not dealt with immediately and in a well-done manner. Bad credit means difficulty for anyone seeking upcoming and monumental purchases.
Doing Well Means Getting Organized
Firstly, you must get your, well...stuff together. Despite the mess, gather all the credit card information and place it down on a table, a big, long table. You must then be prepared to tally the necessary information needed to see just how bad a credit card debt scenario is. Take note of balances due, the actual due dates and the payment amounts required (both minimum and higher payment options).
Factor in if you have multiple balances -like most individuals do- on different cards. What are the balances like? Are there a few smaller balances and one large balance, or vice versa? If so in either case, then you might be in need of some consolidating, simply to make some sort of headway on those due credit card payments.
Making headway on payments though, can be a curious event, simply because there are numerous options one can take. Regardless of which option is selected in the end, some progress is assuredly being made in lessening your debt.
Highest APR Balance Pay Off Option
This makes the most monetary sense, paying off the credit card balance with the interest rate which hurts the most, financially speaking. Take all your multiple balances and pay off the one with the highest APR rate first. Do this until the highest balance is paid off in full then move to the other lower interest rate balances and continue paying them off until each is erased from your financial history, not to mention, memory. Paying off balances this way will take some more money, but stick with it. A great rule of thumb to stick to is paying more than the minimum requirement, even doubling or tripling the amount (when your budget can. Holding strong to such a plan will completely eliminate credit card debt.
On The Other, More Budget-Inclined Hand
Paying off the lowest credit card balance is a great way to ease into paying off credit card debt. Doing this will take longer, yet will provide capability to gain financial endurance (not to mention responsibility), in this case, stamina, to pay off debt slowly but surely. Once the lowest balance is paid off, then it's just a matter of moving onto the next lowest and so on. Think of numbers and figures here. You've got three balances, each varying in financial weight. One is $5,000, the second $2,500 and the third $750. Clearly the third amount is the best option, especially if money is tight and financial stamina is weak and in need of strengthening.