Financial Equalization-The Mortgage Killer

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You Do The Math!

Let's begin by establishing the facts:		No.
What was your mortgage balance at the time of purchase?		1
What is your present mortgage balance?		2
How frequently do you make your mortage payments?		3
What is your mortgage payment?		4
What is your original mortgage amortization? (30 years or other)		5
How many years left to pay on your mortgage today?		6
How many years have you lived in your home?		7


How much is it going to cost all total?
Mortgage Payment * # of payments per year = Annual payment of:		8
Annual payment (#8):$ X Amortization years (#5) = Total P & I cost		9
Subtract your mortgage balance at purchase: (#9 minus #1) = Your total mortgage interest costs		10

How Much is it Going to Cost Before Taxes? Or how much income must I work for to pay off this debt?
For the answer to this question, divide your total principal & interest payment (#9) by the reciprocal of your tax bracket.
(35% bracket divide by .65) (40% bracket divide by .60) (50% bracket divide by .50) Average bracket is 35%		11
NOTE: The amount of money you must earn before taxes to pay off your mortgage is: (#9 divided by #11)		12
Additional costs over & above your original mortgage principal borrowed = (#12 minus #1)		13


How much have you already paid your bank since purchase, that you will never get back?
Annual payment (#8) X (#7) years you have lived in your home = Total costs to date:		14
Principal paid to date: (#1 minus #2) Original mortgage balance minus present mortgage balance =		15
Mortgage interest: (#14 minus #15) = Mortgage interest paid to date:		16

Total cost (#14) divided by bracket reciprocal (#11) = Amount you've had to earn to date:		17
Subtract Principal paid from the amt. you had to earn (#17 minus #15) = current borrowing costs:		18