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A Great Way to Pay for Healthcare

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
May 21, 2021 8:03 am

A Great Way to Pay for Healthcare

MoneyWise / Rob West and Steve Moore

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May 21, 2021 8:03 am

The pandemic has put a strain on our country’s healthcare system. But a unique way of paying for healthcare hasn’t been affected by COVID related changes. On the next MoneyWise Live, host Rob West will talk about that with Lauren Gajdek of Christian Healthcare Ministries. Then Rob will take your questions on the financial topics you’d like to discuss. That’s MoneyWise Live—where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio.

Finishing Well
Hans Scheil
Rob West and Steve Moore
Rob West and Steve Moore
Finishing Well
Hans Scheil
Rob West and Steve Moore
Rob West and Steve Moore

This is Doug Hastings, VP of Moody radio and were thankful for support from our listeners, and businesses like United faith mortgage heading into spring. I've been spending a lot of time pondering, analyzing and debating something extremely important to men and even many women and that's whether a new driver would improve my golf game I would say them somewhere between embarrassing and appalling at golf man do I love it and all my buddies show up with these epic/big maverick Bertha drivers and I can't help but feel like they've got this massive advantage on me and my persimmons. It's right that our family mortgage team were proud to have a pretty special advantage ourselves and one that can be a big deal for you. Our team is an arm of the company who is a direct lender, which means our company uses its own money and make its own decisions within its own walls.

There's no middleman in this advantage often allows us to get you a better rate, saving monthly and lifelong money on a refinance or new home purchase were much better in mortgages than I am at golf. We are United faith mortgage United faith mortgage is a DBA of United mortgage Corp. 25 Belleville Park Rd., Millville, NY license mortgage banker for licensing information, go to an MLS consumer corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah innovators changed our world dramatically in the last year and 1/2 how we were to educate our children and even visit the doctor, so it's good to know that some things haven't changed fibroblasts to the pandemic also strained our healthcare system but a unique way of paying for healthcare hasn't changed all talk about that would Lauren guide to Christian healthcare ministries that's on your calls at 800-525-7000. That's 800-525-7000. This is moneywise live at the cross, your finances, our guest today is Lauren guide VP of communications and media Christian healthcare ministries and here today to reassure us that the amazing service or group provides has gone off without a hitch. During the pandemic Laura great to have you back with us absolutely.

So how are things going at CHN bring us up-to-date going very well and had not really very much and we are. We continue to share medical bills. 100% eligible medical bills for our members and we keep our sharing time down so that consistent experience for everybody who joined the program and ultimately we reached a milestone recently where we have shared a sum total of over $6 billion in medical bills on the time he started an incredible $6 billion.

Shared medical bills, God's people coming together, sharing each other's medical costs in Laura, that's incredible.

It's a huge milestone and really speaks to the longevity and the success of this ministry doesn't have a 40 year and so proud to be able the ability to continue to serve our members over long period of time and were just thrilled to be able to do. No questions. You mentioned the term share time keeping the share time down. I assume that means how quickly those shares are going out to your members.

Is that right so explain that a bit.

Just what is that typically look like well share is between 75 and 90 days and a lot of times that we overdeliver on you know we work with that healthcare providers on something special arrangement need to be made by enlarging a members are seeing the bill shared under that three month timeframe that makes sense since it's been a while since you've been with us. The quick refresher on how Christian healthcare ministries works. It's definitely not health insurance. But give us an overview right model, then perhaps what you feel we are biblically baby though we held our foundation in relation to how much that carry each other's burdens, and fulfill the law of Christ. And then we often taken our example from the early church in the book of chapters 2 and four that the believers pulled their possession and shared with each one. He had the need.

And then there was no one in need because they were all supporting one another and that's what we do in the area.

Healthcare cost question about us just about a minute before her first break.

How is it different to insurance while you know the main thing in the patient is in charge. Though you know you at the patient and you can shop around for your healthcare and save a lot of money for yourself and for your fellow members and I'll fill you know you always see the pricing transparency and that something where you would get the building you attend the Delft and then we would work with your healthcare provider that needed and we would turn those bills around and we would get what we call share those bill, meaning that we would send a check to you the patient yes's and some programs actually require testing or application fees.

What's required to become a member of CGM three and that we don't exclude anybody based on height or weight or where they read me know.

Our only qualifications are that you are a Christian living by biblical principles and you agree to our statement of belief which is on our website and then you attend worship group worship regularly at your healthcare man well and was really special is that you describe your relationship with your members is a positive relationship based on the biblical model continue to unpack this just around the corner talking with Lauren guide to Christian healthcare ministries healthcare cost solution it's budget friendly, faithful and biblical questions hundred 525-7000 800-525-7000. This is moneywise live for God's word guys are financial decisions back to moneywise lie were so thankful for the underwriters we have here in our program that allow us, in part, to bring you this show every day.

One of those is the ministry of Christian healthcare ministries were joined today by Lauren guide to VP of communications and media at CHN healthcare cost solution it's budget friendly, faithful and biblical in Laura just before the break we were talking about the biblical basis for this ministry and then you describe really how it works. So let's walk through scenario.

Perhaps some of our members are still a little fuzzy about how this actually plays out in their lives.

Let's say the kids are playing soccer in the backyard little Johnny unfortunately breaks his ankle as an emergency room visit. I've been there done that is an x-ray of the casted comes to $2500. How would you pay for that using CHF to get all the time Boulevard old program. We do have three different programs that describe goals for the sake of time and the threshold that we be looking for with the goal program at $500, though, you know, anything that would exceed $500 and that could be multiple medical bill but together they exceed more than $500 on then CHN would go ahead and with those caught the case because you know it's about $2500 is what were talking about the CHN would actually share go back and share 100% of the cost. As long as they're eligible. According to our guidelines, which in this case. Everything should be eligible interesting.

Really exciting thing about this is the community. It's the body of Christ coming together.

Talk about that side of it, because often these events were you all are stepping in and sharing our surrounding health crisis in that means this is a difficult time.

There's actually a prayer element hereto, is there really a more formal program where members can write to each other and note to each other and then we have more informal type of things where you know folks call in their dealing with a really tough situation. Or maybe they just got news that they're expecting you. Nothing there really happy that their nervous and our staff is very compassionate and eager to walk alongside them. Whatever their dealing with then and we hear that a lot from our members how they felt so supported by our staff and and they pray for them over the phone and sometimes by way of email, so there's lots of ways that the body of Christ can list each other up spiritually during time question. You mentioned the team you have in the house. This is dealing with each of your members and addressing their customer service needs you mention, they often pray with them. We have visions we think about paying for medical bills that were going to have to haggle with our provider. In this case, yes it's not insurance but were wanting to make sure that these events are covered.

Talk about that piece of it and how willing CHN is to step in. No matter what's going on right before we expert to interact with healthcare providers all the time you know there are unique situation where a member need to have the surgery quickly.

I think need to be set in motion fat and our team is so good at, you know, interacting with the providers on the member's behalf, something that is intimidating to you as far as asking for a discount on your medical bills which we encourage then we do have here who can assist with that as well. And typically when your cash prayer, which is how the medical provider will see you if you're part of CHN's. They're very willing to lower their fees are the kind that in a lot of pain bigger then their little more challenging and we do work with them as well. Hence the team I mentioned a couple minutes ago but by and large the healthcare providers are are pretty friendly toward the model when they understand what it is were trying to accomplish and they understand that you know CHN is been around a long time you know we share each other's building were faithful to do it. So generally speaking, you know, we do have members who get you know, 40, 50, 60% often and I'm talking about big bills. He notes that in some cases $100,000 or more. I mentioned a moment ago the Christian healthcare ministries is not only faithful and biblical but it's budget friendly. Let's talk about that for a moment. What is the actual cost of membership.

Can you walk us through long goal program again, which is hundred $72 per person per month but there is a No family would ever pay for more than three what we call unit so it's really hundred 70, $72 a unit all dependent children together are considered just one unit, though, if you have five kids, you know, it doesn't matter. You never pay more than 1723, which is $516 a month for a lot of folks is they think about having a legitimate healthcare cost solution, especially one that's biblically based, there probably some prize to hear how exact budget friendly it is. That's incredible Lauren I love your stories because I know you get to know your members and your team shares these internally as you see God at work and see the body of Christ coming together story that comes to mind of the CHN member whose recently had an event and I'm thinking actually a young lady about 30 years old and not living in Maine amino. Recently married, no children and she went to the eye doctor after a checkup. They said we think something wrong.

We want you to have an MRI and before she left the appointment. She passed out. Come to find out that she had a brain tumor. Now, thankfully, it was operable, but of course she had to go through all the stress of having major surgery and they thought that there was a really good chance that she would lose her hearing in one year. But God was so faithful and and she came out of it. She could hear immediately after the surgery and you know the doctors were just sounded then CHN was able to help as you can imagine brain surgeries quite extent this is that we were able to help in and satisfy all those medical bills. She had incredible wealth.

I know you all are really personally invested in your members live since I so appreciate that aspect of the ministry, as we mentioned before we actually have team members here. Money was media that had been with CHN for a long long time and they share that sentiment about just how they feel they're a part of the community in their so grateful to have the support of CHN through their healthcare and that every facet of it so I noticed a many conventional health plans right now Lauren are in an extended open enrollment period through August 15. That's not an issue with CHN. There's no such thing as their right we don't have an open enrollment. You can join CHN at any time. We kind of joke around and they were always open, or if you need to make changes if you're already a member need to make changes pretty easy to do. We just need a 30 day notice for that but very flexible. It's very easy to join and were always eager to welcome new believers into our family scripts.

This is been so informative and helpful. Lauren is a solution for your partnership time today. How can folks get more information. I really just go to our website which is H 3.4. Or they can collect at 809 16256 or be with us today. Lauren thinking felt like I appreciate it. Christian healthcare ministries is better yesterday. Learn queue calls or text 800-525-7000 stay with us. Thanks for joining us today or moneywise live on Rob West is open 800-525-7000 grateful for Lauren guy that could CHN partnership and underwriting. He was radio you know this is a really phenomenal alternative budget friendly to traditional healthcare in our Facebook to question today was why do you think medical cost-sharing is a great way to cover healthcare expenses in Charlotte said well we you CHN which is great because you pay the same amount monthly. Whether you have one child or more, which is way cheaper than tradition than any traditional option. She says Alisa says you don't have to participate in plans that pay for things you don't believe it. And so there's another aspect of this which is aligning your dollars with an organization that aligns with your values. So really exciting CHN of course you'll been doing this for a long time goes back all the way to 1981 and again thankful for the Lord stopping by today, hard-working, turn the corner in the take your financial calls and questions. Today we will apply the truth of God's word to your financial life.

What we've got slides open.

Here's number 800-525-7000 800-525-7000 before we take our first call today but let me just mention that we do have the coaches available for you, but we'd love for you to both submit your questions if you don't have a chance to get on the air, but you have a question, one of our trained volunteer coaches can assist you.

We'd love for you to submit that question one of two ways either email that to us at and that we use those questions. Many of them on the error and I try to answer at least one a day and then beyond that, you can post your question to our moneywise community. You'll find it in the moneywise that you downloaded in your app store and you can post a question here from other moneywise listeners, but you'll also hear from our coaches as well and so be sure to stop by a Delmo the connect to the web app that and post your questions. We'd love to hear from you and provide some biblical counsel to whatever you're facing today.

All right, let's dive into your questions today 800-525-7000 start in Iowa with Diane.

Welcome to the program.

How can we assist you. Thanks for taking my call. My question is between a revocable trust and an irrevocable trust in which one would you recommend would be the best way to go if we have investments in our home and vehicles and think that would like to ensure that gets transferred to our kids appropriately. Yes, well, revocable trust, I am in a living trust or separate terms that describe the same thing basically a trust in which the terms can be changed at any time, whereas in your revocable trust is just as it says it describes a trust that can't be modified after it's created without the consent of the beneficiaries. Irrevocable trusts offer tax shelter benefits that revocable trust do not because you simply can't take it back. It removes the assets from the benefactor's taxable estate.

Meaning they're not subject to estate tax upon death, and they also received the benefactor of the benefit of tax responsibility for any income generated by the assets as you move assets into the trust but feel for most folks estate taxes are not an issue. Just because you know there is not going to be any kind of the inheritance tax or or gift tax of any kind deal up until 11 1/2 million dollars right now and so most folks are not looking for that kind of assistance.

So instead, they're looking at a trust for the purposes of estate planning. To be able to pass their assets to their beneficiaries at the time of their choosing whether that's prior to death if they were incapacitated and then they would have a trustee that would take over and make those decisions on their behalf or after death if they want to have certain conditions upon your the timing of when assets are released based on your minor children, things like that. Trust is also a great way to just improve the efficiency of the estate transfer process wealth transfer because it's out of the probate court.

It's not subject to the public record and so it stays again outside the probate court which would normally be accessible by the public. So there are some benefits to it that I think you know it's not for everyone. In terms of there is some added cost over and above a simple will. So I think it's really incumbent upon you to sit with the godly estate planning attorney just to talk to your situation. Do you have any lifelong dependence because of the ongoing medical issues or their unique circumstances know how do you want to use the trust and is that the right tool for you to accomplish what God would have you to do in your last stewardship decision which is how you orderly and orderly way.

Distribute your assets to the next steward. So does that answer your question though that I wanted to know a little clarification not already done more concrete terms very good one. Glad that was helpful to you if you want to sit with somebody in one of the real benefits Diane to sitting with an estate planning attorney is not only their competency and ability to draw up these documents but just the questions that they can ask you to uncover. Perhaps things you haven't even thought of in terms of how your conducting your will transfer how you're communicating with the next generation, and to the extent it's a godly estate plan are not just looking at the financial capital but the spiritual and social capital as well in helping you navigate the transfer of values and wisdom, even before the wealth so if you don't have someone that you can connect with that encourage you to connect with a certified kingdom advisor in your area and then asked for a referral to a godly estate planning attorney just got your website moneywise and click find CK. We appreciate your call. Very much folks sexually along with us today. A lot more to come on moneywise live many more of your students as well.

We'd love to hear from you phone lines are open at 800-525-7000 also mentioned that moneywise live his listeners prayerfully consider gift this week. Toward the end of the month of May we be grateful we depend on you to do everything we do on air on the web. Coaches are seeking all of it comes from your generous support.

Just moneywise as you prayerfully consider what you just around the corner 525-7000. This is joining us on moneywise live around West. We all want to be reflected in every facet of our lives. We want our lives centered on God's word. We want to include our finances, don't we let this program is all about how we take the Council pull out the principles and apply them to our financial lives. What's on your mind today.

Financially, if you want to be found faithful in navigating what the Lord has entrusted to you. Managing his resources wisely. We'd love to talk to you have a question about that are giving perhaps it's refinancing your home you have some student loans or credit card you're trying to pay off or just trying to navigate handling money as husband and wife how you do that together well.

Whatever's on your mind today we'd love to hear from you would got slides open. Here's the number 800-525-7000 800-525-7000 in just a moment were to be talking about how to pay off the car loan will be talking about capital gains on rental properties but up next is the dog in Akron and I understand you use Christian healthcare ministries. The biblical solution to healthcare costs that we talked about in the opening segment tell us about your experience. Doug, a longtime listener and callers will really appreciate the program a lot of excellent excellent biblical advice I would a lot of people to take it to make a quick little he thought of a lot of people, but you are an opportunity to sign up for their program and the bottom of the people live in my business to get the idea and it was very bad to them about how this whole thing worked.

So they were jumping up and down about it, but I thought the book was based. You know it's gotta be real and I took a trip I can walk into one of their offices, people, and they were like really very helpful not signed up plan about a year after that, all underneath my arm that was shut and my doctor basically said the biopsy will just take it seriously.

While how is this going to work you people out there. This is what this really works is people awesome. My surgery was someone around $20-$30,000. Just like the one outside you know they took 500 was a little and really sounded too good to be true with Jesus on the scratch that encourage everybody. This is the thing that is a bunch of Christians that actually are the rubber meets the road doing what they say they do, and I would recommend them 100%.

That's great. Why appreciate your testimony, Doug and you know it's one thing just to hear about the nuts and bolts in the heart behind it from somebody inside the organization. It's an entirely different thing to hear from somebody who's been where you were facing large medical bills and thinking, all right.

How is this going to work and then to see it unfold in the way it was described God's people coming together your bills paid and somebody walk you through the entire process. That's really encouraging.

How are you doing healthwise awesome 66-year-old guy, but I mean have a construction company and I like the stuff I don't know that the Lord give me good health but that's a scary thing.

A lot of people when it's a health issue in a serious thing to get confused at her blood advice from a lot of different people. This was like doing with family will thank you for your encouragement today and for listening the program and for taking the time to share your stories well. We appreciated the Lord bless you to court Elaine Idaho, Michael, you're next on the program.

How can we help user property that we divided 11. We heard it from my dad. He simply bought divided both of those into smaller parcels and would like to we'd like to sell a couple of those. We have some friends that are thought was retiring, so we could use it to help supplement retirement and also maybe doing in addition, on our home sure about how help capital gain would factor in what we might be looking at concerning that guests were all of these properties bought as rental properties was one of them for peace of one of them. Your primary residence. No wonder primary resident rental properties where land okay but investment properties and not were you living so you wouldn't get. Obviously the exclusion based on that being your primary residence for the last two of the last five 2/5 years. So the other would be capital gains on any gains that you have no capital gains tax rate right now. If you're married filing jointly with taxable income between 80,000 and just shy of half a million is at 15% and there's various methods of reducing that capital gains test tax loss harvesting using a 1031 exchange to cut, roll it into a similar property that you identify within 45 days of the closing and then you purchase within hundred 80 days of the closing. Those types of things, but for the most part, you're going to establish a basis and for that property that you inherited.

You enjoy a stepped-up basis based on the date of death and then upon the sale. You'll determine what was in fact the game and that would be what you be looking for in terms of your where the capital gains would apply.

So I would you know anytime you have something going on in your financial life. It's different, especially when it's in their significant transactions involves involved, like the ones you're mentioning here. I would encourage you to seek out the professional assistance from the tax preparer, CPA or accountant who can just help you navigate all of this, make sure that the capital gains is calculated properly that you don't pay any more than you have to, because you may be able to know something to the cost basis. If you made any improvements for that raw land put in any of the infrastructure prior to the sale. Things like that so I do connect with the CPA or accountant, but yet you'll have some capital gains here based on the profit over and above the cost basis which was either when you purchased it might do some of the transaction costs and improvements or that stepped-up basis on that inherited property but I think you'll that'll be money well spent to seek out the professional advice. We appreciate your call today. Sounds like a blast to have a small community there with a lot of friends buying properties right next to each other. That's a great church called phone lines are open 800-525-7000 800-525-7000 just ahead were to talk about the best way to pay off car loan, whether or not you should reduce principal on your mortgage and whether you can achieve perfect credit score that your questions number 800-525-7000. This is moneywise why we apply God's your financial life. My description is understanding how those 300 versus what's going on in our lives as we have God's resources. Thanks for joining us this is moneywise live my last back to the phones today go to Boca Raton, Florida, just north of our program called to properties.

One is the primary resident rental property. We are soon to pay off the mortgage on the rental property and followed within a year or so primary residence. How can I either insulate myself from credit score dip from nearly stellar perfect credit score or either insulate it that that's that's hit or put perhaps I should continue to keep a small mortgage on one or the other property well I love that I could you have a great credit score. But for me, Diane, there's no reason to pay a dime of interest that you don't have to just so you can create keep an extra mortgage on the books go first of all, are you going to see dip when you pay that off, you may. It wouldn't be much because when we look at the formula for how let's say the FICA score and that's not the only one, but that's one of the most common 10% of that score. Is your credit mix. The various types of credit that you have.

Do you have a good mix of revolving accounts, installment accounts, mortgage know that type of thing and so by taking a mortgage out of that equation.

That's gonna alter that mix begin. That's only 10% of your score. And it's not that that's necessarily going to be a long-term pull you down. You may just be as those changes occur. You may see a slight dip. I would ask is that even to make a difference.

You know if you have a stellar credit score.

Let's say it's over 820 and all of a sudden you know a few weeks later. It's temporarily down to 780 and that it works its way back up to a 20 does that really matter. You know, maybe if anything over probably 740 you're going to qualify for the very best rates and terms whenever you borrow any money.

And that's assuming you're to be in the market to borrow some more money and that's probably not even a given. So I would you know as much as you'd like to just feel like well I got a great score and I don't ever have to think about it. I wouldn't use that as a reason to pay any interest unnecessarily. Especially given the fact that you may not see very much in the way of a change at all. And whatever you see as long as you're in on time.

Pairing your credit utilization you know is good, meaning the overall credit you have extended to you that the current balances are 30% or less of that credit utilization for for the revolving accounts unless those things are out of whack, which clearly they're not.

If you have a stellar credit score that I just wouldn't worry about it doesn't make sense. So it makes perfect sense. Thank you so much I appreciate that wisdom okay. We appreciate your call today.

God bless you and congrats on the credit score. By the way, what is it I'm just curious.

843 843 that's a great credit score you give that one to you for sure they got bless you. Thanks for your call today to Wheaton, Illinois Tyler, you're on moneywise live so I was asking a question, twofold, one how do we get into this situation. The second thing is what you think is best in court. The situation is I got married recently and my wife has playing a car loan, but it two cars at one point she had a car that she return on. How now still think that car but also paying for the car that she currently has. But why would she be paying for both not driving both, but she's assuring me that nothing she could have done that she signed that she's in a palpable therefore when she return the other one and many other interest rated, high, high in it because of that one thing about is it wise to take out like find a buyer for it loan paid off and then use the money the buyer pays us to pay off the loan to come to get out of it or is it line, stay in a position yeah Tyler is the two loans or is it was all rolled into one new loan rolled into one. Okay, yeah, well, they clearly what happened was, you know, based on your maybe she borrowed 100% of the value of the car and you should drop it off the lot immediately lost 20% or more of its value, and by the time she sold it. She had not gotten back into a positive equity situation. She was upside down. So when she went to turn that car in presumably and get the next car they said well that's fine, even though you know the value of this card is not enough to pay off the note. I will just roll that new amount into this new car purchase. So you now essentially you're paying what was left over on that old car plus your financing. This new car and driving one car and you're still paying for that one, but also still paying for the other. Do you know if you have any positive equity now in this current car suspect you don't. But you know what it's worth.

If you looked at the private sale value on what say Kelly blue book and compared that to the current balance on the note book is about 13,004 like that will be left on the note 13,005 okay, all right, and it does the payment fit into your budget and art did I know you aren't recently married and you're probably younger.

Still building your income tell me about your budget and how this fits in. We could really squeeze it and make it work.

We both are in agreement that it be convenient to find a way to get it off our hands possible. Well, I think the key is that you you gotta get it sold. And you know what to the minimum you can accept is to make sure that you get out enough to pay off and satisfy that note in full and then you got assault for transportation.

At that point. So let's say and by the way you're in a good market for this because used car sales of used car values are up right now. That pretty high levels, and so you know there's an argument to be made that depending on what part of the country or in the condition of the car. The make and the model and how desirable that is. You could in fact get the Kelly blue book says you should be able to get 13 you can probably find somebody you be willing to pay 13 50. Just because your prices are a bit higher right now than what you even see online. So let's say you were to get out from under that you got enough you could write the check based on the sale pay off the note. Now that comes out of your budget.

What would you do them for her transportation to get a find out where expensive car that was budget efficient with the payments and the one one thing on baby, everything that we can't transfer the note to someone else, like car always. Like what we have someone else pay at the check in the car. Absolutely yes is that that's the way a private sale works that you would list this car you could do that on auto trader you could do it any number of ways you can do better if you do, it is a private sale. You know, even Craigslist or eBay motors versus taking it to a dealer and you'll do a private sale and yet others of the process for that you could do a couple of Google searches and gotta see how you want to go about that in terms of how you facilitate the payment of that in exchange for signing over the title but yet they'd essentially write you a check, you would turn over the title of the car to them. They become the new owner and you then turn around and write the check to the company that has given you the loan and pay it off and you get a payoff balance you know ahead of time and know exactly what that is.

Just want to make sure you negotiate in such a way that ideally you get at least that out of it, but that's how it would go down and then at that point you guys could take it to go find a new car that says you sent less expensive perhaps a bit more budget friendly so you got a little more margin to do other things build up your emergency fund will give more, perhaps even that contribute to that retirement plan. To some extent yet okay Tyler God bless you and congratulations on the new marriage as well to Chicago, Illinois. Tammy, thanks for your patience today. How can I help you ship your mortgage to you if you've doubled all absolutely sure well because the way a mortgage is calculated the interest is calculated based on the principal balance every.

So the amortization schedule which is the schedule you get when you get the mortgage based on the full term of the mortgage. Let's say was 30 years takes that balance and says okay. Based on this fixed monthly payment that you make to the mortgage company every month. Here's the interest that was charged on the balance at the end of month one and that's why the majority of that payment is going to go to interest because it's a high balance. Therefore, there's a lot more interest in. It's a fixed payment so that smaller portion gets applied to the principal. Then the next month the principal balance is the portion of the interest is calculated based on the interest rate on that slightly smaller balance and so again the majority's get to go to interest, but a little bit less and then over time that flips well if you make a double payment that first payment is going to go based on the mortgage. The amortization schedule. But that second payment.

Let's say you double it is going to go 100%. The principal, because the interest for that period is Artie been paid.

And so now we get to the next month there calculating the remaining interest on a balance that it was one month's payment lower than what it was. The prior month. And so if you do just one extra payment you're not 12 but one you'll take a 30 year mortgage and depending on the interest rate, it will probably become 25 or 26 years in terms of a payoff.

You can cut off 4 to 5 years just one extra payment here so you can imagine the power of doubling every month.

Do you follow that. Okay. We appreciate it.

There's a lot of great mortgage calculators out there on the Internet. I just search for mortgage calculator and that you can play around with Lexi putting your specific terms how much you want to send extra per month and it will tell you exactly how quickly you get that paid off. I think of encouragement.

Thanks for your call today for us today. Folks moneywise live is a partnership between the radio moneywise media let me say thank you to my engineer yesterday producing is Deb Solomon, Jim Henley providing research.

The amazing Gabby T answering phones today.

Should all of your calls. Look forward to having you back. Next, I will be here tomorrow moneywise live

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