Using Your BLOC to Paydown a Mortgage
Never Let Your BLOC Move Into Negative Territory
Your BLOC should not drop below a zero balance. This is money that you are giving away to the banks. So what should you do if your BLOC balance reaches zero:
- How about paying down your mortgage:
Example:
assume you closed on the following mortgage loan four years ago to the month:
mortgage loan amount: $300,000
term: 30 years
APR: 6.00%
total monthly payment: $1,798.65
total payments made: 47 payments
you will then use your BLOC to make an additional payment of $5,000 on the next payment.
your BLOC will look like this:
| BLOC Account Starting Credit Line Balance: $60,000 |
|||||
| Month | BLOC Activity | Advances from BLOC | Payments to BLOC | Balance Owned | |
| Aug Beginning Balance (from slide show #10) |
$(844) | ||||
| Aug | BLOC | Pay Mortgage Principal | $5000 | $4,156 | |
| Aug | BLOC | Living Expenses | $4000 | $8,156 | |
| Aug | Pay | Paycheck | $5,000 | $3,156 | |
| Aug | Pay | Auto Loan Payment | $362 | $2,794 | |
| Aug Activity | $9,000 | $5,362 | $2,794 | ||
Paying Down Your Mortgage Can Save Money
by reducing the amount of interest you pay on your mortgage loan.
Your savings will approximate to the following:
You will be trading $18K mortgage in interest by using your BLOC to advance $5K.
Mortgage Loan Rate Term $300,000 6.00% 360 Months Monthly Payment: $1,798.65 Total Interest to be Paid after 360 months: $347,514 Interest to be Paid after making a $5,000 payment: $329,504 Interest Savings (approximately): $18,010
Tools for Estimating Savings
Download this spreadsheet to run your own numbers.
FREE Download (MS Excel Worksheet) If you have MS Excel - or other type program - use this amortization schedule to analyze your own payment and payoff numbers.
