According to a recent national poll to find out how many homeowners take advantage of the prepayment loophole in our mortgage system, which eliminates costly interest overpayments, it was discovered that 97% of homeowners are overpaying millions of dollars in mortgage interest each and every month.

When Sean Drover, a Chicago businessman and homeowner found out he was overpaying $217 in mortgage interest every month, he was appalled.

"Honestly, I was sick to my stomach when I thought back on all the monthly payments I'd made. If I would have known about the pre-payment loophole when I first bought my home I could have put all that money into equity instead of my lenders pocket."

Craig Romero, creator of an early mortgage payoff technique or strategy called Mortgage Cycling, made comment on this situation that so many homeowners find themselves in a recent article.

In his remarks, Romero said that the problem lies with what the banking industry calls "front loading". This is when the majority of a homeowner's payment is applied towards the interest on the loan instead of the original amount borrowed.

The disturbing fact about front loading is it ensures you'll pay over three times the original amount borrowed. Thus, resulting in enormous profits coming straight out of your pocket and directly into your lenders. Unfortunately, it's just the way conventional mortgages are structured here in America.

Average Homeowner overpays $60,000

In fact, the average homeowner in America is overpaying $2000 in mortgage interest every year, or $60,000 over the life of the mortgage.

"That's an enormous amount of money. This is money that homeowners are needlessly giving away each year. Imagine what a person could do with an extra $60,000,” said Romero.

Using the Mortgage Cycling payoff plan Romero developed, homeowners will not only benefit from gaining back thousands of dollars from these overpayments, they will also pay off their mortgage in 8, 9, or 10 years. Paying off your mortgage years early from the term of a traditional mortgage is also another major advantage.

"I've been using the prepayment loophole for years". Says Denver homeowner, Curtis Landau. "I've actually been able to remodel my home and pocket about $25,000…all from the equity that was built so quickly."

This prepayment loophole isn't something lenders are eager to share with their customers. They’d rather keep it a secret because they risk taking a huge cut in profits.

There are over 50 million mortgages held by homeowners and it's estimated that Americans overpay their lenders in excess of $12 billion every year. It's no wonder this loophole is kept secret…lenders are undoubtedly getting rich off these interest overpayments.

But knowledge is power. Romero’s payoff strategy will transfer you to other camp of homeowners, the 3% that are taking advantage of the mortgage loophole and pocketing thousands in interest expense in their bank account.

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