| Is it really possible to be "Out of Debt"? You maybe asking these same questions my wife & I asked only a few years ago. We were in debt with land payment, house payment, & automobile payment. We did not like owing money to anyone, it made us feel trapped. This was not our idea of the so call "American Way". Friends & co-workers lived their lives in debt to the maximum credit limit; this was what they saw as the "American Way". This was and is still true for the majority the people in this county. This was not the way we wanted to live. When we got married we went in debt for our first home, making payments just like most families do. In the late 1980's we decided to buy a small farm out in the county & maybe build a home on it in the near future. We found some land that we thought would be a great place to live on. I thought there was no way we could get a loan on it. We were in debt for the home we were living in then, plus the land needed to be surveyed, this was to come out of our cash fund. In a couple of weeks the loan went our way and we got the loan for the property on a seven year note at 12% interest, on a variable rate. We had read a great deal of books on the subject of getting what you want from life, not only by working hard, but to attract what we would like to have happen. This sounded really strange to us at the time, but it was working for us in the negative way so we decided to turn it around in a positive way and it worked. We did not have the means to pay more towards our principal each month at the beginning, but we would visualize our morgage principal getting smaller and our bank account growing. Our income did not increase, but we had more money to pay toward our loans and still enjoyed eating out and going places on weekends. In some mysterious way this has worked for us. In some of these books we had learned that you do get what you focus on or give a great deal of attention to. If you focus on your problems you will get more problems, but if you focus on a solution to these problems and visualize what your life would be without these problems, you will come up with the right decision. When we looked back on our lives we could see that we did get what we gave our attention to. This could be good things or bad things, the choose was up to us. In light of this new information we made the decision to become debt free. We spent a lot of our time seeing ourselves out of debt and telling ourselves we would be debt free, and it worked. The law of attraction is a force that works for everyone, if will bring you positive or negative issues. As you know, the interest rate on this loan could go up or down, meaning we would have a higher or lower monthly payment. In the late 80's this was a gamble, but we felt this was the right way to go. Sure enough, in the first year our rate had dropped, we now had smaller payments, but we knew we should keep sending the bank the same amount every month to save on the interest. To get to the point, every year our rate only went down, never went up or stayed the same. We paid off the loan for the property, in just over four years, saving us a few thousand dollars in interest. Do not make the same mistake that most people do and just pay the minimum payment! About twelve years ago we built a home on this same property. We felt a 30-year note was the way to go. After getting the loan at 10% interest and making payment for 10 months we felt inspired to get it refinanced at 8% on a 15-year note and make extra payments. This is truly amazing we were completey debt free in less than twelve years, at a savings around $94,000.00 between the land and home. Do not miss understand me, I think bankers and loan institutions are clearly on the up & up, most are not trying to miss lead people. When you sign for that loan they tell you in writing what your final loan with interest will cost you. I 'am sharing this with you to help inspire what can be done if you and your spouse will work together and focus on becoming DEBT FREE. Ask yourself what could your family do with $ 122,500.61 dollars if you had not paid it to a bank? The amount above is what can be saved on a home loan of $100,000.00 at 10% interest on a 15-year note versuses a 30-year note. Example: 15-years 30-years Loan amount $100,000.00 Monthly payment P&I $1074.61 $877.57 Interest Paid on Loan $93,427.99 $215,928.60 A difference of $122,500.61 Your monthly payment only increased $ 197.04 on the 15-year note. Not sure you can swing the extra $ 197.04 a month; then go with a 30-year note and commit to paying $ 100.00 extra principal each month. Using the example above paying an extra $ 100.00 a month, will save you $ 85,381.44 in interest, your loan will be paid in full 11 years and 1 month early!! What are you going to do with that extra $ 100 bucks. Do your family a favor, get an Amortization program or have a bank print one out for you, and see how much you could save. You may not necessarily need to refinance, but just commit 10% extra each month. You will feel better not worrying; what if I got sick or hurt and not able to pay for my home, will they come take my home, yes, legally they can. By not owing them will bring more peace of mind. Thanks for allowing us to share our experiences with you. As always; seek the higher intelligence within each of us every day to lead and guide you in all of the big or little decisions. This has worked for us and will work for you. |
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