TAX NEWS - 2010

Mortgage Accelerator: Tax Free

Your home represents a relatively safe and secure investment for lenders. If you could make money the same way, it would provide you with the same income, safety and security. But can you earn money on your own mortgage? Yes you can, with a mortgage accelerator.

Remember the mortgage note? That is the "paper" investment that arns income for the bank via your monthly payments. Assume for a moment your mortgage note is $300,000 at 6%, and provides for a series of monthly payments of $1,798.65 totaling $647,514. Of that amount, $347,514 is interest. So that note will earn $347,514 for the bank.

By using a mortgage accelerator, a homeowner will, in effect, be earning a return on their own mortgage. A portion of that note would be paid to him or her! Not only will it represent investment income, but it will be tax-free, not reportable on your tax return, and a safe conservative investment. In other words, you and the bank will be co-investors on your mortgage note.

Is this possible? Can you participate as an investor in your own mortgage note? Yes. Absolutely!

This is what a mortgage accelerator does. It gives you income participation in the bank's investment in your own mortgage - essentially, making money from the mortgage on your home!

Using a mortgage accelerator, a portion of your monthy payment will be income to you each month in the form of asset increase, and the bank will earn correspondingly less interest. You will be making money on your own mortgage note. A mortgage accelerator also reduces your risk of long-term debt, protecting you from unanticipated (but all-too-common) future financial shocks .

Here's how it works: you are going to use your regular income as a hedge against your own mortgage loan by having your income reduce your mortgage balance. For every dollar of income, you will owe a dollar less on your mortgage.

Now, here's the secret the banks don't want you to know - it's that interest on your mortgage is calculated on the average daily balance of your loan. By using your regular income to offset your mortgage balance, you owe less on your loan. As a result, you owe less interest for the period! The key is to use your income to offset the mortgage balance while still having it available for living expenses.

I know you're thinking that you need your income to pay bills and pay for daily needs. No problem, because you will have access to your money any time and for whatever reason.

I know you're excited about a system that can turn the tables on the bank, but you're probably confused. Most people don't understand mortgage accelerators at first, but after awhile, it becomes clear.

The effect of reducing interest in this manner gives you the same rate of return as the bank makes on your mortgage. If you have a 6% mortgage, you earn 6%. And it's tax-free.

But it's even better, because instead of paying the bank 6%, you're "earning" 6% on the same asset - the difference between what you were paying and what you are now making is 12%!

To give you some idea of the power of this system, money earning 12% interest doubles in 6 years. That is why this system reduces your mortgage so quickly!

"Ok", you say, "where's the interest on my money? How do I receive it?" Ahhh, (and here it gets even better), it's gone to increase your equity in your home! You now own more of your home, and the bank owns less! And, this equity increase IS NOT TAXABLE. That's right, you created a tax advantaged benefit earning you 6% that's TAX-FREE.

What other SAFE investment can you find that will pay you 6%, is tax free, is completely safe, and reduces risk of long-term debt.

That's right, there is NO RISK in using a mortgage accelerator. The only risk is in NOT using it, because you will be carrying your costly mortgage for 30 years - and that exposes you to huge risk.