If you have a lot of debt and you’ve also owned your home for several years, you may be able to tap your property’s equity to pay down your debt through the use of a Home Equity Line of Credit, or HELOC.

Let’s take a look at how you could use a HELOC to borrow as much as 90% of your home’s value to help you not only pay off your outstanding debt, but also make repairs and upgrades to your home. 


What is a HELOC?

A HELOC is essentially a line of credit or revolving credit account, similar to a credit card, that is secured with a lien on your home. The more equity you have in your home, the more you can borrow – up to 90% of your home’s value if it’s already paid off. You can make a draw on your line of credit at any time, which makes a HELOC a great option for some quick cash if you have plenty of equity in your home.


Here’s How a HELOC Works

Because HELOCs are revolving lines of credit, your payments are only on the outstanding balance of what you’ve borrowed. Keep in mind, though, that the line of credit typically is interest-only for the first 10 years. After that, your loan balance is frozen and converts to an amortizing loan that will still have a variable rate.

Interest rates for HELOCs are adjustable, and will vary depending on the borrower’s creditworthiness and other factors (including how much equity you have in your home. To get the best rates, you’ll need at least 20% equity.)


The Pros

The most obvious benefit of a HELOC is that you can draw on your line numerous times. So you can start by paying off your outstanding debts, then move on to your next financial goal as soon as that balance is paid off. Also, the interest on a HELOC is tax-deductible, so that automatically lowers the interest rate you’re paying compared to other things like consolidation loans and credit cards.


The Cons

As great as a HELOC can be for some folks, especially if you’re in debt and can’t figure out how to pay down your debt, you are going to lose a lot of equity in your home. If you have no intentions of moving or selling, that may not concern you, but do keep in mind if you ever default on your HELOC, you could lose your home to foreclosure, no matter how well you’ve paid your mortgage.

Also, having a readily-available source of cash can be too much temptation for a lot of people. If you think a line of credit at the ready anytime you want to make a big purchase is just too much temptation for you to handle responsibly, it may not be a good solution for you.



[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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If your debt load is keeping you from achieving your life goals, it can feel overwhelming at worst and discouraging at best. Maybe it’s your student loans that are weighing you down, or perhaps you’ve racked up a lot of credit card debt due to an illness, unemployment or simple overspending.

Whatever your debt situation, there’s a solution that can help you shrink your debt and feel more in control of your financial life. Of course, where you are in life can affect your approach to taking control of your debt. If you’re in your 20s, your efforts to pay off debt – and which debt you focus on paying off first – will likely be different than the approach you would take in your 40s or even 60s. Regardless of where you are in life, though, you may be amazed that the solution to many debt problems is as simple as making smaller, more frequent, automatic payments made toward your debts. Not only will you begin to see your balances go down, you’ll also end up paying less in interest charges.

Let’s take a look at several debt scenarios you may be faced with in the various stages of life and how the Pay Down My Debt system can help you make on-time payments, reduce your balances and begin making strides toward your financial goals.

Aspiring Homeowners

Would you like to buy a home, but just can’t figure out how to set aside enough money for a downpayment because of the bills you’re already paying? If some of those bills include student loans or credit card debt, a service like Pay Down My Debt can help you get rid of them faster, freeing up more of your monthly income to set aside for buying your first house.

How? By automating your payments and making them more frequently, you’re able to pay off your debt faster by applying more of your payments toward your principal balance. It shaves off not just the amount of time it takes to pay off your debt, but also decreases the amount of interest you end up paying.



You can start your savings plan by reducing your spending a couple of ways:

Current Homeowners

Pay It Off Faster…

Let’s say you have a 30-year, fixed mortgage of $325,000 with a 4% interest rate. If you were to automate your mortgage payments using Pay Down My Debt, you’d be able to save more than $36,000 in interest and pay off your loan 51 months earlier. That’s because Pay Down My Debt allows you to make an additional mortgage payment each year and barely even feel it.


Get Rid of PMI Sooner…

But that’s not the only way Pay Down My Debt’s method can help with your mortgage payments. If you’re paying Private Mortgage Insurance, or PMI, on top of your mortgage payments each month, you may be wondering how you can get rid of it. After all, mortgage insurance does nothing for you, the homeowner. It protects the lender in case you don’t make your payments. That’s why eliminating those payments as soon as possible should be a priority for nearly all homeowners. But how?

If you have 20% equity in your home, you can ask the bank to remove the mortgage insurance. They are required by law to do so. And you can get to that 20% mark faster by paying down your mortgage debt more quickly. That’s where an automated service like Pay Down My Debt can help. The system makes the equivalent of an extra monthly payment on your mortgage loan every year. That means your balance decreases faster, the amount of interest you pay is reduced and you can drop that mortgage insurance payment sooner than you may have thought possible.




One of the most, if not the most, important things you can do in your retirement planning is to pay off your debt. The sooner the better.

If you’re nearing retirement age and still are making mortgage payments, or have credit card or student loan debt, now is the time to take control and get these debts paid down so you can put more toward your retirement savings.

A service like Pay Down My Debt can help you get your debts paid off quickly and easily by automating your payments. Here’s how it works: Pay Down My Debt debits your account weekly or biweekly for a quarter or a half of your original monthly loan payment. Over a year, the equivalent of one extra loan payment is made, but it’s done so gradually, so you feel it less that you would one lump payment. If you choose a bimonthly or monthly pattern, you pay a little more than the payment to create an extra half-payment approximately every 6 months.

This method helps you by ensuring you never make late payments because you forgot about a bill, and reduces your interest payments by applying more money to your principal balance.



Credit Card Debtors

No matter your age or how many assets you may own, if you’re carrying credit card debt from month-to-month, you’re doing yourself some serious financial harm. Not only is it costing you a lot in interest payments, it’s hurting your credit scores, which can come back to bite you when it’s time to qualify for a mortgage, mortgage refinancing or other lending scenario.

Credit card debt can seem insurmountable, especially if you’re using your cards to make ends meet every month. Before you can start to address paying off this debt, it’s wise to sit down, review your finances and put together a budget. Once you figure out where you can cut back or how you can earn more, you’ll be ready to look realistically at a plan to pay off your credit card debt once and for all. That’s where a service like Pay Down My Debt can help.

Instead of making a single monthly payment on each of your credit cards, Pay Down My Debt helps you make two monthly payments, reducing the amount of interest you’re paying and thereby paying off your debt more quickly and with less money.



[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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If you bought a house in the last few years and didn’t make a downpayment of at least 20%, chances are you’re paying private mortgage insurance, or PMI. It’s an added expense that does nothing for you as the homeowner, but it does protect the lender from a loss if you can’t make payments on your loan.

Clearly, PMI doesn’t benefit you as the borrower. So if you’re wondering how to get rid of PMI on your mortgage, we’re here to help. Here are a couple of ways you can stop making private mortgage insurance payments on your loan.


Track Your Home’s Value

The Homeowners Protection Act requires that lenders remove PMI from your loan after your loan balance has fallen to 80% of your home’s original purchase price. Explained another way, if you have built up 20% equity in your home, you should be able to remove PMI from your loan. If you have an FHA loan, however, this doesn’t apply to you. PMI is required on these mortgages for the life of the loan.

Beyond FHA loans, however, it’s possible to get rid of PMI even before your loan balance reaches 80% of your original purchase price. You also can request that PMI be removed if your home has appreciated in value to the point that your mortgage balance is at 80% or less of your home’s current value.

That’s why it can really pay to keep an eye on property values in your area and consider an appraisal if you think you’re getting close to that 80% mark. Keep in mind though, that you’ll have to pay pay for the appraisal, which could cost several hundred dollars depending on the kind of appraisal your lender requires. You can use an online service like Zillow to get an idea of your home’s current value, or you can have a Realtor come out and estimate the value of your property before getting an official appraisal.

If you’ve just taken out a mortgage and are paying PMI but would like to stop doing so as quickly as possible, you could also consider ways to pay down your mortgage balance more quickly.


Consider Refinancing

If asking your lender to remove PMI isn’t an option, you could always refinance using a loan without PMI. This option really only makes sense if the current lending rate has fallen from when you first took out your mortgage.

Certainly, you wouldn’t want to refinance just to get rid of PMI, but it doesn’t take a big drop in rates for this option to make sense. A change of as little as a quarter percent combined with the elimination of your mortgage insurance rate can still save you money. There will, of course, be costs associated with the refinancing, so it’s a good idea to review with a lender whether it makes financial sense for you to move forward.


Managing Your Debt

If you weren’t able to save enough money for a downpayment on your home because you’re carrying large amounts of credit card or student loan debt, it may be time to look at ways that you can start paying down that debt faster than you ever thought possible. Once you’re at a point that you’re paying off your credit card balances every month, you can start to pay off your mortgage even faster.

Remember, high interest rates, especially on credit cards, can make your debts balloon quickly and have a negative impact on your overall financial health (here’s a great tip for paying down your credit card debt faster). They can even keep you from securing the best rates on things like mortgages and auto loans. If you’re carrying debt and don’t see a way to pay it off anytime soon, you can check out our explainer on how to pay down your debt quickly.


[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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Natural disasters like hurricanes, wildfires, earthquakes and the like cause billions of dollars in damage each year around the globe. The costs can be devastating to communities and individuals alike.

For people without insurance, the costs associated with a natural disaster can become financially ruinous, so it would stand to reason that people’s debt would increase and their credit scores would be negatively impacted in the months or even years after such a catastrophic event.

A recent study looking at the impact of 2005’s Hurricane Katrina on the credit scores of New Orleans residents may come as a bit of a shock, then, as it actually found the complete opposite to be true.

The study, Household Finance After a Natural Disaster: The Case of Hurricane Katrina,” by Justin Hartley and Daniel Gallagher, looked at the impact of flooding on household finances.

“After Katrina, there is a sharp and immediate drop in total debt for the most flooded residents,” the authors write. “The reduction in total debt is driven almost exclusively by lower home loan debt.”

It appears that many homeowners used the payouts from flood insurance to pay off their mortgages rather than use the funds to make repairs or rebuild.

“Alternative explanations for the reduction in mortgage debt after Katrina either are too small in magnitude or do not fit the observed time pattern,” the authors wrote.


Credit Card Debt Didn’t Increase

In addition, the study found only modest evidence of residents using credit cards to pay for the unexpected costs after the flooding. There was only a temporary increase of about $500 or 15% in average credit card debt after Katrina for the most flooded group compared to the non-flooded group.

“There is evidence of a tightening overall credit market for flooded residents after Katrina,” the authors wrote. “However, differences in new credit card debt accumulation between individuals who are more and less likely to be credit constrained are not economically significant.”

Likewise, debt delinquency rates and credit scores also showed a modest, short-lived effect after Katrina.

We find that the most flooded residents have 90-day delinquency rates that are approximately 10 percent higher, relative to non-flooded residents, for one quarter following Katrina,” the authors wrote. “Credit scores for the most flooded residents are about 0.06 standard deviations lower for a two-year period following Katrina.”

The study did note that New Orleans households could have taken losses such as losing home equity, drawing down bank account savings, or tapping into retirement funds, none of which would have an impact on credit scores or impact credit card debt.

Also noted is the fact that the “institutional features of flood insurance provide a possible way for lenders to pressure borrowers to repay mortgages rather than to rebuild.”


What if it Happens to You?

If you’ve been impacted by a natural disaster recently, whether Hurricane Harvey, Hurricane Irma or any of the dozens of wildfires raging across the Western United States, your credit may be the very last thing on your mind. Still, as you work to piece your life back together, making smart financial decisions like continuing to pay bills on time can be critical to your long-term recovery.

If you do end up in significant debt due to a disaster, keep in mind there are things you can do to pay down your debt much faster than you may have imagined possible.

Just like repairing or rebuilding your home, it will take time and effort, and you may even need some help along the way, but it can be done. Two very popular approaches are the debt snowball and debt avalanche methods. It’s helpful to keep in mind that there’s no one right way to pay down your debt, so choose whatever method feels right for you.


[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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For many of us, debt plays a big part in our lives. Some of us take on mortgage debt to buy our homes. Others take on student loan debt to get an education. And many wind up with credit card debt to pay for day-to-day items or for big splurges. Debt in and of itself isn’t a bad thing. Your debt accounts are what make up our credit reports, and how you manage them can play a huge role in what your credit scores look like.

High student loan payments, for example, can sometimes result in you falling behind and making a late payment. That late payment goes on your credit report (see image below), which then negatively affects your scores. And the more often it happens, the worse your credit scores can be.

Example Credit Report from Experian

Likewise, large amounts of credit card debt can bring down your credit scores, especially if you’ve had any late payments. Why does that matter? Well, the more negative items on your credit reports, the lower your credit scores will be, meaning it will be that much harder to get new lines of credit, such as auto and mortgage loans. Low credit scores can also mean higher interest rates on the loans you do manage to take out.

Let’s take a look at how all of this works.


What Makes Up Your Credit Score?

Before we can really go into how debt impacts your credit reports and scores, we need to understand fully what a credit report is and what makes up your credit scores. First of all, a credit report is very simply a history of your debt accounts. It includes the name of the lending institution, the date your account was opened, your timely payments, any late payments and other identifying data. This information is compiled by the three major credit reporting bureaus — Experian, Equifax and TransUnion — and the data is used to calculate your credit scores.

There are a lot of different credit scores available today, but many credit scores still are made up of the following factors and weighting:


Payment History (35%)

The biggest and most important piece of your credit score is your payment history, or your ability to make payments on time. This is what helps creditors assess your ability to pay back a debt. Both revolving debt (credit cards) and installment debt (mortgages or auto loans) impact this category.


Amounts Owed (30%)

The next largest piece of your credit score is the total amount owed, or your credit utilization. The objective is to keep the amount of available credit you use as low as possible (preferably below 30% of your total available credit, but more on that later). If you are constantly using up your total available credit, it’s likely you’re going to look like a risky borrower to most creditors.


Length of Credit History (15%)

Have you had credit accounts opened for a long period of time? If so, you will score well in this category. While it makes up a smaller portion of your credit score than your payment history or credit utilization, it’s easy to keep this score high by maintaining long, healthy credit relationships.


Types of Credit (10%)

This category isn’t weighted very heavily, but your credit score also considers the different types of credit accounts that you have open. It tends to be more beneficial having multiple types of accounts (credit cards, retail cards, auto loans, mortgages) rather than just a single type.


New Credit (10%)

Creditors like to see a steady addition of credit accounts. They would prefer to see you take out something new every year than apply for three new credit cards in a month. Opening several new accounts in a short period of time can come off as a potential credit risk. The risk increases if you have little past credit history.


Your Debt and Your Credit Scores

Now that we have explored what makes up a person’s credit score, we can look a little deeper into how debt can affect it. The two biggest pieces of your credit score, payment history and amounts owed, are directly related to debt. Frequently when people ask “does credit card debt hurt my credit score?” these are the things they should consider.

Do you find yourself struggling to pay your bills on time? Are you constantly more than 30 days late on your credit card or mortgage payments? These are the types of things that get reported to the credit agencies and can have a significant impact on your credit score. To put this into perspective, someone with a 780 credit score could see a 90 to 110 point drop in their score if they are 30 days late on just one payment. It’s also going to stay on their credit report for the next seven years. That one payment can have a significant affect on your financial life.

Why does that matter? Take a look at the chart to the left from myfico.com to see just how much your credit score can impact what kinds of interest rates you can get based on your credit scores.

Making payments on time is only one piece of the puzzle. It’s also crucial to pay attention to how much of your revolving credit is being used. Ideally, each month you want to see a 0% credit utilization. That means paying off your balances on your revolving accounts every single month. Of course, for many people this doesn’t happen. (If that’s you, here are some helpful tips on how to pay off your debt once and for all.) That being said, having a credit utilization of less than 30% is ideal. Once you start creeping over 30%, you will start noticing a negative change in your credit score.

The combination of making sure you pay your balances on time, even if it’s the minimum, and making sure you’re not maxing out credit cards, can go a long way to keeping a good credit score.

Handling Out-of-Control Debt

Being in debt can be stressful. It can make you feel trapped and confused, but it’s important to understand that you have options.

If your debt has you thinking about debt settlement or even bankruptcy, it could have a dramatic and long-lasting effect on your credit scores. Bankruptcies can stay on your credit report for up to 10 years and can lower your scores considerably.

Another solution that many turn to is debt consolidation. But before you go this direction, know that debt consolidation also can negatively impact your credit scores, but not nearly as much as some of the other options.

“Opening up a new debt consolidation loan also impacts credit scores through the ‘length of credit history’ factor, which accounts for 15% of credit scores,” says Freddie Huynh, vice president of credit risk analytics with Freedom Financial Network.

“When a debt consolidation loan shifts a person’s outstanding credit card debt onto a newly opened installment loan, this typically lowers the credit card utilization for the consumer,” Huynh went on to say. “Though there are other predictors that assess indebtedness of installment loans, credit card debt is generally most influential in credit scores. As such, this can produce a positive impact on a credit score. Again, in order for consumers to benefit  from this change long-term, they would need to resist the temptation to re-leverage and ramp up their credit card balances again.”

So while there might be some short-term negative impacts to debt consolidation, the end result should be positive.


Minimizing the Effects of Debt on Your Credit Scores

While your debt can have a major negative impact on your credit scores, there are ways to minimize the damage. As a starting point, it’s important that you make sure you are always paying your bills on time. Even if you can’t pay them in full each month, you should be paying the minimum. Keep in mind that while you won’t be able to reverse the effects of a missed payment, they will weigh less on your scores as more time passes.

It’s also wise to keep your revolving balances as low as possible. By doing this you will lower your credit utilization. This tends to be one of the easiest ways to boost your credit score. If decreasing balances isn’t an option for you at the moment, then you can request an increase in your credit limit. Both will have similar end results.


[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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If you own your own home you may love the idea of one day paying off your mortgage. Not only will the house be yours free-and-clear, but the money you currently use to make your mortgage payments could be used for other things like retirement savings, your child’s college tuition, even a dream vacation.

While there are multiple ways you can go about paying off your mortgage early (we’ll take a deeper dive into that later) it’s not necessarily the right financial move for everyone. For example, if you have a lot of student loan or credit card debt at a higher interest rate, you may want to consider ways to pay down that debt first. Or if you aren’t going to live in your current home for more than a few years, it may behoove you to sock that extra money away for your next down payment or, as we said above, pay down other debt.


Here are five scenarios when paying down your mortgage debt faster can make a lot of sense.


  1. You’re In Your Forever Home

If you have no intentions of moving at any time in the foreseeable future, paying off your mortgage early can save you tens of thousands of dollars in interest over the life of your mortgage loan. It’s literally money in the bank. Keep in mind, though, that your mix of credit accounts can impact your overall credit health. Holding a mortgage can slightly boost your credit, but if your credit already is excellent, this shouldn’t be of great concern.


  1. Your Revolving Debt is Low

If you don’t carry revolving debt like credit card balances, paying more toward your mortgage makes a lot of sense. But if you do, it may make sense for you to pay off your credit cards before you start putting extra money toward your mortgage. Yes, you’re gaining equity in your home the more you pay toward it, but carrying credit card debt can be expensive, not only because of the higher interest rates you pay on your balances compared to your mortgage interest, but also because it can harm your credit. The higher your credit card balances in relation to your credit limits, the lower your credit scores tend to be, and that can hurt you if you ever look to refinance your mortgage or buy a new or second home.


  1. You Get a Windfall

By all means, if you come into a lot of money as the beneficiary of a relative’s estate or other means, paying down a significant amount of your mortgage debt can feel great. Keep in mind you won’t reduce your future payments by doing so (you’d need to refinance in order to do that) but your payoff date will come around more quickly, meaning you’ll pay less interest.


  1. You Want to Use Your Home as an Investment Property

This kind of depends on where you live, how much you’ll be able to make renting your property and other factors. That’s because mortgage interest on rental properties can be written off for tax purposes in most states just as it can be for individuals. So, if you want to reduce your taxable income, you may want to keep that mortgage. However, if you won’t gain any tax benefit, owning your rental property outright can mean you pocket all of the rental income.


  1. You Just Want to Be Debt Free

While the average American carries a little over $130,000 in overall debt, including mortgages, student loans, credit cards and auto loans, a lot of people want to see their own personal figure at $0. If that’s you and your mortgage is next on your list, go for it. We’ve outlined below some of the easiest ways to make that happen.


How to Pay Down Your Mortgage Debt Faster

There’s no one right way to do this, so considering your personal finances and needs is the first step in determining what’s right for you. In general, though, there are four primary ways to easily pay off your mortgage debt faster:


  • Make bi-weekly mortgage payments.

    It may sound silly to split your mortgage payment in half and pay it twice a month instead of once a month, but doing so actually results in the equivalent of making an extra payment toward your mortgage every year because the extra payment goes straight to your principal balance. You’ll want to check your monthly loan statement or talk to your mortgage lender before beginning this process, however, as some mortgages charge penalties for prepayment.


  • Make a larger mortgage payment.

    The same goes for this method. Contact your lender to be sure your extra payments will go toward your principal balance then round up your payment to whatever amount feels comfortable to you. For example, if your mortgage is $1,285 you could pay $1,350 or $1,400 instead and barely feel it. Meanwhile, you’re paying an extra $780 or $1,380 per year toward your principal.


  • Refinance your home.

    If you can refinance your home for an even slightly lower interest rate while getting the lender to cover the closing costs, you can pay down your debt faster even though you’re pushing back your payoff date. Here’s how: By continuing to make your current mortgage payment or even adding a bit to it. Contact your lender or another about whether you can lower your rate enough to make this a feasible option.


  • Use your tax benefits.

    Talk to your financial professional about ways you can benefit from some of the tax deductions you may be eligible for, such as mortgage interest, private mortgage insurance, home office deduction, repairs, etc. These items can potentially save you thousands, and when you get your refund, you can apply it to your mortgage.


[Editorial Disclosure: PayDownMyDebt.com is a service that provides people with tools to pay down their debts through automatic payments. The purpose of this article, however, is not to encourage users to purchase that service. This article is educational and journalistic in nature and aims to help people learn how to pay down their debt, whether they use our site, another, or go it alone.]

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home equity

Here’s How to Find It

Before you start pulling up your floorboards or rummaging around in the attic looking for cash, we should probably tell you that what we’re talking about here is home equity. Equity is basically the difference between the current value of your home and how much you owe on it.

The good news is that you don’t actually have to sell your house to access your home equity. You can tap into it with a home equity loan, home equity line of credit (HELOC) or even a reverse mortgage. That’s money you can use for a renovation, college tuition, a new car, retirement or a financial emergency. And remember your home equity factors into your personal net worth.

Did you know that a couple of years ago, the U.S. Census Department looked at how much equity Americans had in their homes? Based on that information, it’s been noted that the average homeowner aged 45-54 had a net worth of about $84,000 — BUT… when you take home equity out of the equation, that number plummets to only $25,000. The bottom line is that you want home equity, and you want to build as much of it as quickly as possible for your financial future.

So just how can you do that? We’re glad you asked. We’ve put together this nifty graphic that shows how the one easy change of making biweekly mortgage payments can help you build significantly more equity surprisingly quickly. Have a look and see if you’re not shocked at the equity building difference biweekly payments can make.




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What are your retirement goals? Do you want to be debt free with more wealth; travel more; enjoy your golden years stress-free in your fully paid-off home? To live comfortably in retirement, you can no longer rely solely on Social Security to survive and thrive. And company pension plans that pay a fixed income for life are virtually extinct. That’s why, no matter your current age, it’s critical to plan and start building a solid nest egg right now with biweekly mortgage payments.

Find out where you stand and if you’re on a solid path to financial security in retirement. Do you have IRAs, 401(k)s or other assets to liquidate in retirement? If not, start now with skillful planning and investing. Your remaining years on the job are your last shot at socking away money in tax-advantaged retirement accounts and creating an emergency fund for unexpected expenses.

Many borrowers worry about their income dropping when they retire while their mortgage payment stays the same. But what if you had no mortgage payment at all? One of the best options just might be to pay off your home loan early, before you retire, then start saving the money that used to go to the mortgage. If you have enough years before retirement, you can do that by making biweekly mortgage payments.

Instead of sticking with the traditional monthly premium, making biweekly mortgage payments can pay off with increased savings and financial security in retirement. The biweekly mortgage plan also works well for other types of large debts, such as auto loans or large credit-card debts.

Here’s how it works: You make half of your monthly mortgage payment every other week. This means you make 13 payments each year instead of 12 (52 weeks divided by two equals 26 periods), but you’re paying just a little bit more with each biweekly payment. Withdrawals from your account every other week fit conveniently with paychecks and your monthly budget, while an extra half payment twice a year toward principal reduces interest over the life of the loan — visit our website for all the details.

If you have a 30-year mortgage for $272,000 at 4.5%, this one strategy alone can save you more than $37,000 over the course of the loan. Plus, you’ll retire your debt 53 months earlier using a biweekly mortgage payoff plan.

Use the loan calculator as a blueprint for determining how much extra money you need to apply to your debts with biweekly payments for the faster loan payoff you’re looking for. Experiment with various scenarios to see how biweekly mortgage payments can help you eliminate debt quicker, build wealth and achieve your goal of a golden, financially secure retirement.

Use biweekly mortgage payments to pay off your home loan sooner and save more for the retirement you’ve been dreaming of.













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Equity is one of those words that can be confusing and maybe even a little intimidating for many people. Isn’t equity something big hedge funds have? Do I need some sort of license in order to build equity? The fact of the matter is, if you have anything of value that you could sell for more than what you owe on it, then congratulations — you’ve got equity! Most people think of equity in terms of the value of their home, but you can also have equity in a car, a boat or RV, computer equipment, artwork or a business. How much equity you have in an asset relative to any debts against it is commonly referred to as your equity position.

Equity is important because it’s a mechanism by which you can convert assets into cash should the need arise. Additionally, you can often borrow against the equity in your assets such as the case with a home equity loan or a home equity line of credit (HELOC). And while equity isn’t money in the bank, it might be the next best thing. So if it’s that good, then how can you get more of it? There are basically two ways…


Strategy #1 For Building Equity: Increase the Value of Your Assets

First, you can increase the value of the assets you own. How can you do this? That depends on the asset, but making home improvements is an example of one way that people attempt to increase equity in their home. In this particular case, an added benefit is that you get to enjoy that improvement while you (hopefully) gain equity. However, it’s important to remember that not all home renovation expenditures increase equity. You may make a change or addition that future buyers don’t like, and therefore does not increase the home’s value. Or you could add an improvement that people like but are not willing to pay for. This can occur if a home is over-renovated relative to real estate values in a particular neighborhood.

Similarly, growing a business you own can increase your equity it in. By gaining customers or increasing the capacity to sell more products or services, for example, the business can become more valuable and the owner’s equity position can increase accordingly.


Strategy #2 For Building Equity: Decrease Debt

The other way to increase equity is by decreasing any debt obligations on your assets. There is a strategy you can use to pay down your debt and grow equity faster and potentially lower the amount of interest you end up paying over the life of the loan. Biweekly payments are a simple and straightforward way to reduce many types of debt and improve your equity position. Here’s how it works using a mortgage, for example. Suppose you have a $300,000, 30-year loan at 4% interest and your regular monthly mortgage payment is $1,432.25. If instead, you simply paid $716.13 every two weeks, you’d make 26 half-payments annually — or the equivalent of one extra payment per year. As a result, you’ll pay off that 30-year mortgage in 25 years, 11 months and save more than $33,647.94 in interest with Pay Down My Debt.

With biweekly payments, you can get out of debt sooner and pay less total interest over time. But you can also build equity faster. How many people do you know that stay in their home long enough to pay off a 30-year mortgage? Not many, probably. So what happens when you sell your home just a few years into your mortgage? Usually because of the way mortgages are amortized, with the bulk of the interest being paid up front, you’re not in a very strong equity position because you haven’t paid down a significant amount of principal during those first few years. So you can pay your mortgage for years, pay taxes and pay to maintain your home, but the only one with something to really show for it when you sell early is your lender.

Making biweekly payments on your mortgage can help stack the deck in your favor, should you sell early in your loan term, by helping you build valuable equity faster. Biweekly payments are particularly beneficial with loans whose terms are longer and with loans that carry higher interest rates.


An Equity Building Strategy 

Make a list of all of your current assets and how much equity you have in each of them. Then consider ways that you can build equity by increasing the value of those assets or by decreasing any debt obligations you have against them. For many Americans, equity — even more so than cash in the bank — is the path to financial security. Don’t ignore this important facet of your financial life.

If you want to learn how biweekly payments can help you get out of debt sooner, save on interest and build equity faster, call one of our professional loan consultants today. We’ll do the math and the legwork for you. That means you can start saving on a mortgage, car loan, student loan, credit cards and even business loans.


There’s a saying that time is money. That’s certainly true when it comes to paying down your debt. The sooner you start, the more you can save. Call us today.

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How to Pay off Your Mortgage Faster

As we go through life, we have lots of monthly bills to pay – utilities like electric and water, car loans, credit card bills and more. But probably the biggest monthly payment we’ll ever make is our mortgage. And for most of us, that big payment can be with us for up to 30 years of our lives. That’s 360 payments that take a big bite out of your budget every month. Even for those few who have 15-year mortgages, that’s still 180 monthly payments. Have you ever wondered if there was a way to pay off your mortgage faster so that you would be free of those payments each month?  Well there is, and it’s easy.


Benefits of Paying Off Your Mortgage Faster

Imagine how great it would feel to be done – completely done – paying your mortgage five or even seven years early. Think about the breathing room you’d have in your budget. Even more amazing, think of what you could do with that extra money each month: Pay off debts, take trips, afford those fun little extras that make life less stressful and more fun. Or, you could divert those monthly payments to a retirement account so you could rest easy knowing your later years will be comfortable.

Even if you’re not planning to retire in your home, there are financial benefits to paying down your mortgage faster. If you have an FHA loan, VA loan or other low to no down payment loan, building equity in your home may be a priority. A biweekly mortgage can help you build equity up to 300% faster.  That means you could get rid of mortgage insurance or be ready to refinance a whole lot sooner.


Having Extra Money

Having extra money each month means something different to everyone, but one thing that’s the same no matter who you are or where you are in life: You can pay off your mortgage early and it won’t take a big bite out of your budget or require any fancy accounting maneuvers on your part. If you goal is trying to eliminate mortgage insurance, we estimate that we can get you there about 18 months faster. That’s 18  multiplied by your monthly premium that you can potentially save.


How You Save Money By Paying Your Mortgage Off Early

And in addition to helping your monthly budget gain some much-needed breathing room, you save big money in another way too: By paying your mortgage early, you stand to save tens of thousands of dollars in interest payments.

Here’s an example: Suppose you have a $200,000 mortgage at a 6% interest rate. Over a 30-year period, you would pay $231,676.38 just in interest. By cutting off seven years of your loan, the interest you’d pay drops to $169,203.66. That’s a savings of $62,474.72 – and that’s money you’re putting in your pocket, not the bank’s.


How To Pay Off Your Mortgage Early

The goal of the Pay Down My Debt service: To help you get your mortgage paid in full much more quickly so you can enjoy more – lots more – of your hard-earned money. The customer-friendly Pay Down My Debt service relies on bi-weekly payments to help you get our of mortgage debt faster; instead of paying, say, $1,500 once a month – or 12 payments a year – under the PDMD strategy, you’d pay $750 every other week for a total of 26 payments a year. That ends up being a whole extra payment each year, but because you make it over time, it doesn’t have the same impact on your budget – it becomes a regular routine.

Sounds like a lot of work, but we make it easy. Pay Down My Debt establishes a bi-weekly plan with your lender so you don’t have to worry about the details. We take care of your plan’s management so you can relax, knowing you’re taking good care of your money and your financial future.

Run the numbers on your own home. The savings can be significant. Contact us for a savings quote (844) 729-1800.

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