Using Your BLOC to Paydown a Mortgage
Fast Mortgage Paydown
view illustration
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 #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 | |
Now imagine how much more you can save if you made mutilple $5,000 payments throughout the mortgage loan term.
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.
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