Mortgage Killer Accelerator

Strategy 66 of 107

Audit the servicer: make sure every extra dollar hit principal

Most predictableFrom a lower cost of the same debt

What it is

Compare each statement with what you sent. Extra money should show as principal, not as unapplied funds or a future payment.

Steps

  1. Compare each statement with what you sent. Extra money should show as principal, not as unapplied funds or a future payment.
  2. If something is wrong, send a written notice of error; the servicer must acknowledge it within 5 business days and generally fix it or explain within 30.
  3. Check escrow math and fees the same way.

Repeat: Every statement.

Measure: Amount corrected (enter as a one-time amount).

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

Risks

  • Use the address the servicer lists for notices of error, or the rules may not apply.

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

Any homeowner with a mortgage.

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: compare each statement with what you sent. Extra money should show as principal, not as unapplied funds or a future payment.

Suppose it brings a one-time $30,000 on principal. The loan would be paid off in 22 years 10 months instead of 30 years, saving about $134,798 in interest. To finish in five years, they would still need about $3,387 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.

Sequences that use it

  • Servicer check-up: Make sure the servicer credits every extra dollar, drop mortgage insurance on time, fix the escrow, then put idle savings to work.

Sources and more information

Where to get help

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