Mortgage Killer Accelerator

Strategy 101 of 107 · new for the five-year plan

Get out of required flood insurance with a FEMA map amendment

Most predictableFrom a lower cost of the same debtFive-year size: a solid share

What it is

If the lender requires flood insurance but the house sits higher than the mapped flood level, get an elevation certificate.

Steps

  1. If the lender requires flood insurance but the house sits higher than the mapped flood level, get an elevation certificate.
  2. Request a Letter of Map Amendment from FEMA; if approved, the federal requirement no longer applies.
  3. Send the premium saved to principal, or keep a cheaper policy.

Repeat: Once.

Measure: Monthly premium saved.

Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.

Risks

  • Flooding can still happen; many people keep a lower-cost policy.
  • The surveyor's certificate costs money.

Who it fits

Average household, Higher earners, Higher net worth, with assets, Business owners, Newlyweds, Married couples, College students, Single, Grandmas and grandpas (62 and over), No high school diploma, No college degree

Needs

Lender requires flood insurance

How predictable

Most predictable: once in place, the payoff date is arithmetic

A worked example (hypothetical, not guaranteed)

Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.

They follow the steps: if the lender requires flood insurance but the house sits higher than the mapped flood level, get an elevation certificate.

Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.

The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.

Sources and more information

Where to get help

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