Home » Get out of the Mortgage “Death Grip”

Not surprisingly, the word mortgage is composed of two words mort = "death" and gage = "grip;" the word literally means death grip.

Say this is a James Earl Jones voice "Mortgage = death grip….." Scary sounding, isn't it? What else would you call a 30 year loan for $250,000 dollars at a 6.5% interest rate that ends up costing you $568,861.22?

This would be classified as theft in any other industry and the people behind it would be prosecuted and do prison time. We call it the banking industry and not only is a mortgage legal, it is widely accepted.

Banks are taking serious advantage of their customers when they offer to lowering your monthly payments by refinancing your mortgage. What many of the people who are refinancing do not understand is the bank makes most of its money on the interest during the first 15 years of the mortgage.

When you refinance you are literally resetting the percentage of your payment that goes towards interest (which is the majority of it). On the $250,000 mortgage at a 6.5% interest rate during the first year, only $2,794.31 will go towards your principle debt. The rest of the $16,167.73 you paid during the year goes straight into your banks pocket. And the taxpayers recently had to bail out the banks!

You need to master money if you want to pay off your mortgage or any other debt. People who are wealthy understand this cardinal rule; Interest is always working on your money but it is up to you to determine if it is working for you (reducing debt and building wealth) or lining the banks pockets.

The trick to mortgages is to make as many additional principle payments as possible, as quickly as possible. By taking this approach, you increase what you put towards the actual loan instead of having it wasted on interest.

In order to pay off a mortgage or credit card you need to have additional income. This can come in the form of reducing costs or creating additional income streams from a second job or personal business. It is from this additional income that you have the funds to pay off debt quickly, getting out from underneath oppressive bank debt and investing your money.

Financial freedom is only possible if you understand how money works. You must teach yourself the basics of finance; learn the general concepts of amortization and interest. Once you understand this, learn about investing. Read a few books, take an online course or attend a seminar. Then, take control of your own finances by creating a budget that focuses on paying off your mortgage or credit card debt. Banks are in the business to make money so give them as little of yours as possible.