From consolidating high interest credit card debt to leveraging a property to purchase other investments, people have been using mortgage loans in their financial strategies for a long time.
One of the easiest ways to increase your wealth is to make additional payments in the early years of your loan. One additional payment within the first year can be worth almost 3 times its value in interest saved in a 30 year loan. One additional payment at 15 years is only worth around 1 times its value in interest saved. In a simplified example, if a borrower pays $2500 in additional principal on his first payment due on his mortgage loan, that payment is worth almost $10,000 in the life of a 30 year loan.
If a borrower pays that same amount at the 15 year mark, it is only worth $5,000.
If you are consolidating debt, leveraging up, or simply buying a house, work hard to make extra payments early. It will pay in the end.
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