As you read this report, it’s important that you don’t become discouraged early on. Since the techniques require using credit to accomplish the goal many people automatically shy away because they’re unaware of how to utilize this credit to their advantage. It can seem intimidating. However, it’s those who are poor money-managers that are usually not disciplined enough to “play” or cycle credit to their advantage that feel this way.
If followed properly, this plan will give you the confidence, skill and knowledge needed to effectively manage your money. Thus, allowing you to accomplish your financial goals.
A lot of people don’t know this but it’s probably one of the most important things to know about large loans and the interest that is applied to these loans. In this country our loans are front-weighted. This means that you are required to pay off most of the interest during the beginning of the loan and then taper the interest amount paid off later on. So most of the money from your initial payments is going towards interest and not the actual amount borrowed, the principal.
In fact, even after paying 15 years on a 30-year mortgage, you will still owe approximately 90% of the principal. So, many people are surprised when they make a call to their lender after paying their mortgage for a few years and find out how much they still owe. I think most people believe they have a lot more equity built up in their homes than they really do.
Keep this in mind as a goal to overcome as you read on. Don’t get discouraged.
You may want to read this over a couple of times to fully understand how it works. Just remember the savings from the calculator (link on page 9). This is money that belongs to you. You owe it to yourself and your family to follow through with this program. Keep in mind your main goal: to get out from under the interest trap as quickly as possible. If you stay focused on this it will make your transition from the way you were used to handling your finances to this new way much easier. Besides, this new way will allow you much greater financial freedom in the long run.
Everything you are about to learn in this report is perfectly legal and quite simple to initiate.
Read on because you’re about to learn how mortgage cycling will not only produce results far greater than a bi-weekly plan, but will also teach you the power of credit and the important role it plays in financial success.
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If you ever wished you could get a loan that you could use to invest or start a business, here’s a great way to do it using cycling. Using the following example you’ll be cycling the banks money with two credit card balances. By doing this you will be able to deposit a lump sum of cash in your personal account without incurring any interest or having a payoff deadline.
I recommend using this money only for purposes that will bring in additional money. Like property investment or starting you own business. I don’t recommend using this money for impulse purchases like a new car, a boat or anything else that’s going to end up losing its value.
This cycling technique is a very powerful cash system. Use it to your advantage by investing the money wisely. You may also use this money to pay off existing high interest debt. When you do this you’ll want to open a money market account where you deposit any extra cash. Over time while you’re cycling the money back and forth…you’ll have saved up enough money to pay the original balance off. All without paying a cent in interest!
The chart below uses the following examples: Note: The credit card names are strictly used as examples. You may use whichever credit card you’re comfortable with.
• $10,000 line of credit from your bank
• $10,000 credit limit Amex credit card
• $2,500 credit limit Master card
• $2,500 credit limit Visa card
January
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February: Use your Amex to pay off bank credit line balance of $10,000
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March: Use Master Card and Visa to pay Amex balance in full
April: Now you will pay Master Card and Visa off using your Amex.
See how simple and powerful this is? Continue to cycle back and forth for as long as you wish. Make sure to pay each balance full every month and you will never incur any interest charges on this loan.
This entire time you have $10,000 sitting in your personal account gaining interest just waiting to be invested.
You have just given yourself a $10,000 loan with 0% interest that doesn’t have a pay back off date. Allowing you to take as much time as needed to repay the loan.
Be sure and use this technique wisely. If you have any reservations about your ability to manage money responsibly…I recommend holding off on using this cycling plan until you have better will power and stronger money management skills.
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Mortgage Cycling can be a very powerful vehicle to build wealth. Once you get the hang of this cycling technique and you feel comfortable using credit to pay down your mortgage, you can focus on using mortgage cycling to create an income.
Since Mortgage Cycling is so effective at rapidly building tens of thousands of dollars in home equity, you can use this to your advantage by taking this equity and placing a down payment on an investment property. A good example of an investment property would be one that is purchased at or below market value then turned into a rental.
You would then use the renters’ monthly payment to make the mortgage payment on this rental property and possibly the payment on the equity loan you took out to purchase the property. This way you have acquired this property with no out-of-pocket expense.
Now you obtain a line of credit to begin Mortgage Cycling this property. Before you know it, you will own your first investment property – free and clear. You can either sell it for a profit or keep it and collect a regular monthly payment from the tenant.
From there, you can always move on to additional properties using this exact technique. Many real estate investors own dozens of properties outright from utilizing this technique.
Important Instruction: Each time you send your big extra payment (in the above example it was $6,000) to your lender, be sure to call them ahead of time and let them know you’ll be sending a large pre-payment. Be sure and clearly state the payment is to be applied to the loan’s principal. This is very important. If you don’t do this, the lender may apply the payment to the loan interest or even put the money in escrow. This would be very bad, as it would totally negate all your efforts of paying off your mortgage and building equity. |Remember to check your mortgage contract to make sure that any prepayments made will be applied to principal. Some lenders will state in their mortgage contract that prepayments go to escrow. This is BAD as you cannot reclaim those funds for any useful purpose. Your signed contract is the ultimate source of truth for all transactions. Read it carefully!|
Also, be sure to get the name of the person you spoke to. You’ll want to keep track of this transaction to make sure that your efforts pay off. Also request to receive a receipt or statement that shows when your extra payment was applied to the loan principal. If you notice that it wasn’t, you’ll have the name of the person who handled your transaction to clear it up.
You’ll want to send your extra payment by check so that there’s a receipt of your payment. Send the check with the following letter:
Example:
Important payment information enclosed
August 28, 2004
Re: Additional principal payment
Loan #0000-00-99999
This payment is to be made on behalf of:
Your name
Your property address
Extra monthly payment to be applied
to principal is $6000.00
If there are any questions or problems with
this payment, please contact Your name
at 777-777-7777.
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