Mastering My Debt - Aboriginal Style
People across the world seem to agree that there is something magical about being debt free. In some cultures people would not even dream of taking on debt. In the United States, credit is the livelihood of business and consumers. There are far and few between that start the journey down the American dream without a mortgage.
Australians have a different way of paying down their mortgages. Before we understand their method lets recall what ours is all about. One of the most popular mortgage programs is the 30 year fixed interest rate. This method calculates the interest owed based on a daily balance. The interest payment decreases over the years as our principal payment increases.
Australians have a program called the mortgage checking account. This account in essence works like a home equity line of credit (HELOC). In the US a HELOC is a secondary mortgage (line of credit) that enables the homeowner to borrow against the principal they paid as their down payment, the principal they accumulated from their regularly scheduled payments and the homes appreciated value. The owner can borrow and return the funds at their discretion. The interest rates on HELOCís are typically better than other rates in the market and that is why people utilize them for home improvements for instance. The freedom of borrowing and returning the funds is the key feature behind the mortgage checking account.
The Australian mortgage check account essentially turns their primary mortgage into an account with terms similar to the HELOC. Homeowners in this program would deposit their entire paycheck into their mortgage account and attempt to pay all their bills by utilizing a credit card. Most credit cards allow a payment grace period of up to 25 days. Therefore, bills that may have been due at the beginning of the month could now be paid almost (30 days credit card cycle plus 25 days grace period) almost 55 days later! This exercise enables the homeowner to utilize the full amount of their paycheck as principal towards their mortgage for almost 55 days. By doing so, the average daily loan balance is lowered and the mortgage interest payment is lowered as well. By the time the credit card payment is due, the homeowner would have received another paycheck which enables them to continuously suppress the daily loan balance even though they had to extract funds to payoff the credit card. The Sydney Financial Group does a terrific job explaining this concept with video illustrations. Sydney Financial sells software (~ $3,500) that helps homeowners create a theoretical mortgage checking account in the US and tracks their progress as they payoff their mortgage.
Many brilliant minds have studied both the American method and the Australian method. They concluded that Australians have a slight advantage as their method really does enable them to suppress interest costs. A portion of the funds that go towards interest in US would go towards principal in Australia.
www.MasteringMyDebt.com strives to provide solutions that enable users to benefit from different types of debt acceleration programs free of charge. In order to duplicate the Australian method in the US at no cost, all that a homeowner would have to do is obtain a home equity line of credit, deposit their paycheck into this line and commit to paying off the credit card utilized for bills every month. A balance cannot be carried over on the credit card as the interest on the card would eliminate any savings. By utilizing Mastering My Debtís free payment methods in conjunction with the described HELOC account, a user can maximize the return on their earned dollars towards accelerated debt elimination.
Mastering My Debt has noted that when users start utilizing our free debt elimination system they tend to spend less as they are eager to see even quicker results. As such, if a user spends less, more money would stay on the equity line and less interest would be paid.
www.MasteringMyDebt.com provides an array of free financial services. The tools provided on Mastering My Debt do not necessarily eliminate a financial advisor but are a proven enhancement providing clarification and knowledge. Many professional counselors purchase identical programs, customize the financial information, and provide them as part of their consultation. By obtaining a free debt elimination report from Mastering My Debt, one can frequently tailor a roadmap to financial freedom.
Since it was founded in 2007, Mastering My Debt has supported financial programs, calculators, articles and news through the profitable selling of advertising. Financial tools are utilized by industries such as mortgage, automotive, real estate and financial services.
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