I am just wondering that with all of the expenses of a house, maybe it’s cheaper to rent? I also was told by a friend that a friend of hers wanted to pay cash for a house..but the bank wouldn’t let him! He actually got penalized for it..they charged him a fee for paying off the mortgage too soon! What highway robbery.

By the way, has anyone heard of the movie THE SECRET? It’s pretty popular. In it, one of the interviewees said..“if you are trying to visualize and use affirmations, never, ever say...I am getting out of debt..because you will NEVER get out of debt because your focus is wrong.” That’s what I was doing so I changed my focus and said..“Money and abundance is coming from all directions and in many forms..” You wouldn’t believe the change! It was like the block was cleared and I started making progress.

Regarding rent...remember, you are making the mortgage payment and paying the landlord a profit, otherwise he couldn't afford to keep the property.

You are right about The Secret 4silverstrea, focusing on the things you want to eliminate creates more of them in your life. "I want", "I will do", "I will be", "I will get", are all restrictive affirmations. Presence the positive things to exist in your life by thinking in the now and say, "I am", "I have", "Life is". We were taught that we must DO certain things to BE something or other but the doing gets in the way of the being. To turn this around, BE first, and by default, you will DO those things required to support your belief. Ex: "I am a dancer...therefore I will do my practicing".

Paying cash for a house and paying off a mortgage early are two separate issues.

You would never have a problem paying cash for a house, and it would not involve a bank or mortgage. Your check, made out at closing, would go to the seller or their leinholder. The seller could have a penalty depending on the terms of his mortgage, but that has nothing to do with the new buyer.

If your friend had a mortgage (he did not pay cash for the house) and now he has the desire to pay it off, he is bound by the terms of the mortgage agreement. Frequently to reduce up front costs, or to reduce a rate, a buyer agrees to stay in the mortgage for a minimum time period (usually 2-3 years) so that the lender can earn his costs back and a reasonable profit. If you want to change the terms of the agreement, there is a pre-payment penalty to cover that loss of income. One of the reasons for doing this is to stop investors from rolling over a property without paying a fair cost for the money they borrowed.

I think that the real problem in a focus on paying down smallest to largest debt is that there is an assumption that we will not incur any new debt as we are living ....but what happens when we have a car accident and have to come up with a high deductible, or pay college new tuition, or one looses one's job, or starts a divorce proceeding, or one's hours are cut, or on and on ...that is the difficulty, even christmas and travel to ones family, etc is always there and expensive.
i have found a great program by mary hunt... " the official cheapskate"..etc. books. i have tried her programs for financial survival during a terriblly stressful divorce /loss of x spouse job situation of stressful finances and found that her concepts of separate accts at banks with separate job monies direct deposited each paycheck for mortgage and select bills has been a tremendous help. she also advocates setting up emergency funds which are so important yet so very hard to maintain....( as costs go up, we tend to use that money for "necessary expenses" like property taxes, etc.......)

It is completely worthless! For $350 you get two notebooks and a couple of tapes, all of which tell you nothing that anyone with any sense doesn't already know. Pay your bills, cut your expenses, increase your income. There. Now everyone who reads this owes me $350!

Personally I think the company should be sued for fraud to help get refunds for the 1000's of people who wasted their money on this "program."

Download the MP3 files and PDF files ($39) and stop there. Do not check the "Free Consultation" hour. You will be pressured to buy into the "Financial Coaching" program. The "Consultant" (from a company called Prosper Learning Inc from Utah) has a motive and it becomes obvious he is going to get you to move on to the next phase. Many red flags came up while we spoke with him while I was researching online, "ProserLearning.com" while he was pitching his product to me (unkown to him). I really don't understand why John Commuta would affiliate himself with this company. With them I think you will go into debt to get out of debt (learn more about ProsperLearning at www.Scam.com). With the the MP3s you will get all you need. Its the slap in the face to wake you up and change your thinking and strategy towards money management and debt control.

I haven't actually heard of the program myself but from what people describe of it I am not sure if I would call it a "scam".

Ok, so it sounds like lots of it seems to be "common sense" but why is it that so many people still don't do these things?

It was exactly the same with me some 4 years ago when my wife & I started falling into what can be described a debt crisis. We're not stupid people yet all of these so called common sense things didn't occur to us.

Sometimes it takes a program like this or others to get someone really thinking about how to change. It took us a while to change our spending habits even after we consolidated our loans. We actually got some help from some online sources as well as from a credit counseling service. What they told us did seem like common sense AFTER they told us, but until then, it just didn't occur to us.

My 2 pennies..

Your housing (rent, mortgage, etc.) should not be more than 30% of your income. You are living well beyond your means if your income is $2400 and your mortage is $2200. The budget needs more in it than food and mortgage.... like utilities, insurance, etc.

Exactly right.

I’m new to the forum and would like to comment on debt elimination programs.

Most all use the “snowball” system to pay off small debts first then apply that money to the next debt and so on. Its common information and can easily be found on the internet. The real key to each program is: Does the way it’s presented “Click” for you?

Here’s what has worked for me and my wife. Our Church offers the Crown Financial Small Group Study. It’s a 10 week course that not only uses the common principles of debt reduction but also what the Bible says about money and debt. This study was developed by Howard Dayton. There are several reasons why this program is successful.

The first and foremost is the combination of Faith and the fellowship of the other couples in the class. It can be a lot of fun. We share a lot of our life’s experiences but not our personal financial information.

Another reason for it success is it requires spouses to work on their budgets together. Money or Fortune magazine did a survey sometime ago on “Why couples fight over money?” What they found was that the couples had the same goals but they did not communicate them. They found that men did not know what their wives were spending for groceries and the women did not know how much was in their husbands 401k. The Crown class gets couples communicating about their finances.

Since initially taking the class, my wife and I have become co-leaders. This has allowed us to stay on track and provide others in our Church the opportunity to become debt free.

By the way, Crown offers free financial counseling. The counselors are called Money Map Coaches. Find their web site for contact information.

It sounds like you have found a system that works well for you FredS. Working together in a marriage to form and seek common goals is essential in all aspects of the relationship, but is especially apparent when it comes to money matters. Sharing information, or feelings, or goals with one another comes down to respecting that persons worth. Without that respect, there is no unity, and the relationship is headed for some rocky times.

Having a support system in place as you have mentioned is also a great way to keep focused on your goals and intentions. We all waver at times, and having some encouragement at the right moment can be the difference between saving or splurging. As you pay off debt, have mini goals along the way and reward yourself as they are reached. This will also give you a greater determination to continue the charted course.

Here is what I know about Mr. Commuta and his system. Commuta's program has previously been marketed under a Network Marketing System, at which time it was called "Debt Free and Prosperous Living". A member of this system would pay money every month for "Access to Materials" and "Telephone Training", which was really just money for the "upline". In my opinion, one of the reasons that DFPL probably failed is because part of the system involved getting people to attend seminars, and WHO would ever admit to debt problems in a public forum. Who knows what other problems DFPL ran into - Google "Debt Free and Prosperous Living" and see what you get. A previous user correctly described the underlying system as a "Snowball" plan. DFPL referred to the extra payment $$ as an "Accelerator Margin". Basically, you focus all your resources on paying off ONE BILL, and then add the money that was being used to pay off THAT BILL to the next, and so on. Eventually, with other bills paid off, you have a large amount of $$ which could theoretically be focused towards payoff of mortgage debt, which, if applied could result in someone being debt free. However, if you consult with financial experts, there are many other factors to consider before paying off mortgage debt in advance. There are "shareware" programs available for $10-$25 that will perform the same calculations that Commuta's "system" wants folks to pay hundreds for. I saw in other previous posts that folks are also referred to other companies, pitching more "training" and other items that cost $$. The sad fact is that many people who respond can ill-afford several hundred dollars, and anyone who asks for that kind of money, given the depth of the actual "system" involved should have trouble sleeping at night. That being said, it is TRUE that IF a person can stop all new debt acquisition and AT THE SAME TIME pay extra $$ towards "picking off" their revolving debts one at a time, they USUALLY can get out from under just that part of their burden in 2-3 years. As you might expect, those are BIG IFs.

A co-worker told me that he was looking into a program that eliminates your mortgage is 7 years. He said that after answering some questions, a unique program is set up for you. It utilizes your HELOC to make payments on your mortgage, and then the program tells you when to make payments to the line of credit. Does anyone know of such a program? It doesn't make sense to me. You still have to pay back the HELOC + interest. My friend said that his other friends are doing it and it works. I'm waiting for him to do it and see how it works for him. If you know anything about this type of program, please post it. He said that the program costs approximately $3,000.00

It is an interest game. You borrow the HELOC money and pay the interest, or pay the balance, after the month is over. Your mortgage payments are paid early to take advantage of the reduced interest period. You also run all your household money through your HELOC, again to take advantage of the interest float. Maybe you have a positive balance (credit) in your Heloc for part of the month with your auto deposit. Anyway, they are trying to beat the bank by using the difference in finance rules. I have seen the video they pass around, but don't know of anyone using the system. It is (as you stated) a bit complicated, so you use their program to time your payments to beat the deadlines.

There is another system doing something similar where you actually refinance your home every 2 or 3 months. The float of skipping a payment when you start the new loan, allows them to use the banks money to cover the payments.

I don't know enough either strategy to feel confident in their success.