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Hello, shouldnt the total principal payment say $199,000? She paid an additional $1000 so the additional payment column plus the principle payment column would equate to the $200,000 loan. Your sheet is showing a $200,000 paid in principle so it looks like she paid $201,000 plus interest for a $200,000 loan. Am i missing something somewhere?
Great advice. Right from the start of my mortgage I paid bi-weekly and paid extra on top of that. My monthly payment was $1200 but I paid $900 every two weeks and twice a year an extra $900 went on the principal. I paid my 30 year mortgage off in 9 years and saved over 100k in interest. Debt free is awesome!
TD Li Do you think you now , Owe really owe your home? Think again, You have to pay Taxes on that Home the rest of your life,,..Franklin Said to the American People, There are 2 sure Things in Life! Death And Taxes.
td li @God Bless You 💕🙏💕...I’m praying 🧎♀️ to be able to pay my mortgage OFF within the next 10 years or LESS!!! By the Grace Of God💕🙏💕🥰 I’ve been debt free before so I know it can be done ✅!!! This time I’m REALLY doing it for ME!!🙏💕🙏🥰
Paid my 200k loan with a single income 23 years early. For 7 years we live pay check to pay check on purpose. All our income tax goes to principal for 7 years and I pay $2000 extra each month. I work 3 jobs to make that happens. And all the sleepless nights paid off. Thanks God for keeping me healthy for the last 7 years. And now my family is enjoying all the hardship and dedication we made as a couple.
@@MatthewSmith-uf6tr I'm not good as you in investment. All I know right now is we don't have any single debt and we are enjoying it. That 2000 extra that I put in mortgage before. Now is in good shape after 7 years we can purchase another house with cash that's probably my SAFE INVESTMENT.
I loved this as I am about to invest in uk property with 70k deposit (plus fees and more savings for furnishing and decorating) to buy my own place, but I am also treating it as my fourth investment, having two spare rooms for lodgers to cover this property mortgage and tax costs... and to build my equity whilst working my day job for my next investment.
Hello, I am in London and am considering investing in real estate as a way to get some passive income. A few years ago, my brother purchased a home in a county outside of London. Because he was unable to find tenants, the property was eventually repossessed. As a result of this experience, I'm concentrating on purchasing real estate in London, where it's quite challenging to obtain a mortgage because of the high cost of the properties. Would you kindly recommend an easy way, where one may try to sustain these cost on mortgage?
First, Jessica you need to have a salary of at least 25k before you will be considered for a mortgage, that you need for properties. If you want to achieve a 75% yield yearly, try looking out for an investment management coach or else you will be competing against professionals themselves.
Generating returns are usually phenomenal. What would have been really interesting would be a proper breakdown showing their costs , services, investors return..
That's an intentional way to live, that's the only way to become debt free. I've already paid off two previous mortgages. Now I'm working on my third and I cannot wait since it has to happen before retirement in four years and I'm already getting there the proficient way, Luckily for me my trader and coach Frost Hilda has been using every opportunity to ensure I benefit from each turn the market takes. Good luck staying debt free as much as possible in the future.
Absolutely Zachary, contract agreement splits are favorable, I’m also exceptionally well positioned as I’m privy, so that’s a good return deal for any investors creating revenue for more interest.
I agree. Unfortunately, the educational system focuses more on getting us into debt and feelings. These are real, everyday economics. Awesome video. Thank You for the information.
I started to make extra payments to remove mortgage insurance from my payment. I realized that after making normal payments for over 8 years, I still didn't pay down enough to remove mortgage insurance. I was still 10000 dollars short. So I started to make extra payments. Man!!! That does make a difference. June 2017 I owned 97k June 2018. 77k June 2019 58k I'll payoff my house in 3 years. In 3 years I'll be 43years old guy with lot of disposable income.
This effect is known as the “time value of money”. I hear many people talk about that banks require you “to pay all the interest up front” and when you look at a mortgage amortization it certainly seems that way, but the truth (and the secret to the math in the video) is how many times the interest on your loan gets compounded. You have an annual interest rate when you purchase the loan, say it’s 4% or .04 annually and you make monthly payments. But the interest is not calculated annually, nor monthly... but daily. So every single day of your mortgage the bank takes the balance of the principal and multiplies it by 1/365th of 4% and that’s what you pay in the following months payment. So if you have $200,000 balance at the beginning of the month, each day you are charged 1/365th of 4%, or .00010959 times 200,000 which comes to $21.92 a day you pay the bank to owe them money. This is why you save so much in interest anytime you pay down a little more of the balance, because every single day there is less principal to charge interest to.
So much value in this video - purchasing this spreadsheet from you. Don't even care if they have free ones on the internet - have to support your work after obtaining so much value. Thank you!!!
i moved in my house back in 2016, took out a loan for $121,000 after putting 6% down. my monthly payment is $825, however im single now. and im saving a lot more money, and i got two roommates to move in. im currently making $3,300 mortgage payments per month!!! im literally skipping 9-13 months per month off my 360 month note. i make $60-70,000 per year, and i do not have a car payment, credit card, medical, or student loans!
Paid off mine in December it took me 9 years by sending all the extra overtime I made for 2 reasons first I never got used to the extra money that's was there then is not there now due to being OT second I saw it as for every dollar I send to principle I'll save one or 3 dollars in interest in the long run depending where you at in the 360 schedule payments!! So I'm 42 with no mortgage looking for the next 20 years of investment opportunitys!! If we make it thru the Corona virus lol
Troy Maddox,But in the end , your paid up Mortgage , Well Actually you dont owe your Home, If you dont pay Taxes your Home will be confiscated By the Govenment
I dig your format DB, 'just subscribed. Also I'm 7.5 years into my mortgage. I've been throwing an extra $50-$200 per month direct to principal. I've been doing this since the beginning of the mortgage. For me it was a major motivator when you see you pass the point where you're automatically paying more principal than interest. On top of paying it off sooner, I also put funds into investments as well. I enjoy tackling this financial thing from all sides! 💰😀💵
That is our approach as well. We have been hitting our new mortgage with 10% extra every payment and starting in month 15 we start to reduce the extra payment every two months until we hit the point when the interest portion is less than the principal portion without any extra payment and then we just pay the minimum. All extra cash each month goes to investments. Especially now that this down turn has started.
If you are thinking straight math then yes. But most mortgages don't work like that. In this videos example the guy made 1 payment and it reduced it 3 months and saved around 3k in interest. The sooner you do that the more compounded it will be and the more you'll save. The key is to make sure your extra payments are going straight to your principle and not being counted as early payments. Sometimes you'll have to call and make sure they're handled correctly
This is not right. If I have a P&I payment of $2000/mo, and I put an extra $100 into each month, It will equal 3/5 of an additional payment every year.
That depends on your balance. If you take it a 50k mortgage it will cut way more, if you take a 2M mortgage it will cut way less. There's no universal $=saved time figures
I love content like this. You did a great job explaining the different factors affected by extra payments. Once I realized an extra $100 payment a month would shave off over 4 years from my loan it became my new standard. Tinkering with these amortization calculators is fun.
I paid my mortgage off 9 years early. Wasn’t easy but it was the best financial decision I have ever made! Even during this COVID crap I was able to get it done. My mother would be very proud. #Thankful
Great information. I just made my first mortgage payment. My goal is to pay extra directly to the principle every month.its amazing to see how one payment effects the whole loan. Thank you for sharing.
I pay extra on my mortgage principal biweekly 👍 I read an autobiography by Geeneen Roth who lost her life savings when she was in her late 50s (approx. $850k-$1M I can't quite remember) to Bernie Madoff's Ponzi scheme. She still had a mortgage on her house (approx. $300k). Her biggest regret was not paying off her mortgage before investing heavily. She regretted it SO much. For me, the security of owning my house is worth it. Besides, with a mortgage you are dealing with compound interest in reverse. That low 3-4 percent mortgage interest rate isn't that low when you consider that ❤️
@@DrawbridgeFinance Lol. Yes, I stay away from Ponzi schemes whenever possible 😀 I invest in low cost index funds from Vanguard in addition to my pension contributions. To each their own, however for me home ownership is worth it. Maybe it's my female security gland acting up, as Dave Ramsey suggests. Either way I definitely think paying extra on the mortgage in the early days is best. Later on it's up to personal preference. Personally I want to own my house asap.
@@LMCEK Love Dave! Sounds like you have a good solid foundation. Glad you're watching and commenting. I would love to build up this page with more people like yourself who are educating themselves and making informed investment decisions.
The interest gains on an investment are taxable, the interest savings on the mortgage are not taxable income,. So even if you could get a higher return on an investment, you may not be making more money.
Very true!! This should all be part of the strategy! 💰 Join the club for trade alerts and private chat: www.patreon.com/drawbridgefinance Free educational investment videos: ruclips.net/user/drawbridgefinance
Paying more in interest for a tax break is like paying a dollar to save a quarter. Would you rather pay an extra $1000 dollars in interest just to get $ $250 back at the end of the year? I much rather have the extra $1000 dollars to invest or apply to the principal.
@@deepdoodoo3252 my mortgage payment includes principal, interest, insurance, home taxes. I lose the % on the mortgage, feed the market for a %, and use the delta market vs. HELOC to pay the interest only on the HELOC. In the end you can continue to pay interest only or cash in your growth expanded portfolio, but why you would beats me.
Netting 7% annually for thirty years after costs is a big ask, but gains should be tax free using a capital gains allowance. Great content and along the lines of what I advise my kids, along with how to be positively, happily and productively engaged in order to make an income
@@a46475 There’s a lot more to paying off your mortgage than the financial aspect. Having that asset paid wholly and a place to live indefinitely is a huge sense of relief for many people. I pay extra on my mortgage as well as invest heavily in the market. If the market tips upside down for a few years and all of the sudden you’re struggling to pay the mortgage, those beat down shares don’t look quite so appealing. I like a balance of both. Too each their own.
My husband and I pay 1,000 to 1,500 every month on the principal. We will have our 30 year mortgage paid off in about 7 years, I think.... we also put down a large down payment. We know nothing about investing and decided to pay on the principal instead. We want the security of having our house paid off. I admire what you’re doing, amazing!!!
That's a good thing baby should go buy a rental property multi-unit 3 unit 4 unit building but being a landlord isn't for everybody just a few the brave or crazy or the wise or pick all three.😊😊
Great video ! Just subscribed from Calgary Alberta. Just bought a 300k condo and did 45k down payment and this gives me some great advice! I'll start doing more lump sum payments
Great, informative video... When I bought my house 16 years ago, I took out a 5/1 ARM, as I did not plan on being in the house too long. At the time, the market was hot... as were prices... and I did not really like the house... but it was close to work, in a nice neighborhood, and in my price range... so I bought it. Then came the housing crash in 2008. I was VERY upside down on my mortgage... so I was stuck there. Luckily, once the mortgage started to adjust, it worked in my favor & my interest rate went down for several years. When things started to improve, I looked into doing a re-fi. I timed my re-fi pretty good. I got into a 15 year fixed at 2.75%. Due to the shorter term, my monthly payment went UP... by about $500 per month. I decided to try & whittle down my mortgage balance somewhat aggressively. I took the approach of making an extra mortgage payment per year... so I divided the extra payment by 12, & add that to my monthly mortgage payment. Yea, it hurts (especially in Southern California), but my balance is dropping pretty quickly. I also maxed out my 401k contribution at work. In addition, I have a $400 monthly draw into my brokerage account/Roth IRA... so I kinda still live like a college student... but it's ok. I'm 9 years from retirement... and when I DO retire, my house will be paid off & I'll have enough money in the bank to live comfortably... I hope!
Good examples. Its something about paying the mortgage off early that appealing vs investing into stocks. So I would more than likely do what you are doing and pay extra towards the mortgage early if possible as well as invest in dividend paying stocks. Finding a balance that works on a individual basis👍🏾
As could be seen in the amortazion schedule, one could had saved a whopping amount of interest had the $1,000 been paid on the first payment, and even more had the next principal payment been made each & every month (for as long as possible). The sooner one makes extra principal payments the better, $1,000 every month for the 1st year alone would had put a large ding in the mortgage (about 4 payments for every one made) close to 25-26 years total. More if extra payments were made, even $100/month adds up to be a lot of skipped payments. For many, $100/month is realistic, just cut out a night on the town, pack lunch versus going out or skip the Starbucks in the morning & carry a fresh brew from home instead (this alone would easily be $100 saved). A combination of all three would be $200 eatra per month. I was paying an extra $300/month in the early 90's (near 30 years ago), so it would seem that $500 could easily be done in 2020 w/out breaking a sweat (& we had childern, one in college). After all, lenders ensures there's money left over for extras before approving loans, even back then & more so after the 2008 crises. Usually no more than 35-45% of total income, to include taxes & insurance. One can also do side gigs & pay all earned as extra principal on the mortgage. Me, I love to do PC work, could easily pay an extra $1,000 every month today from virus/malware cleanup alone at $100 per computer. More if I committed extra hours per month and/or including PC building profits. There are many profitable hobbies to persue, unless unemployed, no reason to allow the banks to rob us blind on the interest.
Thaaank you Charles! I know its been a yr, but I just had to say: thanks for the honesty and motivation! I started paying $100 extra from the get go. But then my mortgage increased by a whopping $110, about 2 yrs into it, and I had to reduce it to $50. But guess what, I'm looking at a tangible raise, plus I make about $20 a wk as a ghostwriter. I'm positive, I'll return to my $100 extra every month. And I'm definitely eyeing that 1000 payment. I'm also a late bloomer investor...learning from my daughter n son😁. I looooove rain (purity) advice from Real pple. Stay healthy n blessed😊.
Purchased my 3rd home in Nov of 1977. Paid on it until 1983 and decided to pay it off when I was 33. I was in a job that gave me an annual bonus that varied. In 1983, 1984, 1985 and 1986 I applied all those checks to my unpaid balance on my mortgage which I think was 7%. Paid off my house on Tuesday, March 11, 1986. There was a weight lifted off my chest and then I could invest my house payment every month. My point is that the faster or sooner someone can pay off their home is the faster or sooner they have a lot of investable cash that they are not paying in interest. A good example would be if Alice paid for her house say 10 to 15 years in and then saved that interest + the house note going forward. I know I would not be in as good of shape if I had house note most of my life. I did until I was Woke in 1983 ( when I realized I should be getting interest and not paying it ) and then paying it off in 1986. .
Thanks for sharing your story. I can't tell if you watched my whole video or not. Either way, it is why I also am choosing to make extra mortgage payments, as I stated in the video.
I did in fact see the end and I can only say that paying my house off was the single best financial thing I ever did. Not having a house note for the last 33 years enabled me to invest more because of the discretionary monies it gave me. Everyone is different, but being 36 when I paid off my home and with a wife and two small children the concern of a home was then lifted. A tremendous feeling of relief for me.
We started with a 180k mortgage amortized over 25 years. At year 5 we shortened the amortization by 5 years. This made 15 years remaining instead of 20. Our payment increased by $37.29 every 2 weeks. Not only does it save 5 years of payments, but an astounding 45K in interest over the 15 years. Our interest also dropped from 4.49 to 2.69 percent at renewal time, so some of the saving is from the reduced rate.
I wish they taught me this back in school. I learn more useful stuff on youtube than i ever learned in highschool. I have never had to use the pythagoras theorem once after highschool
I like the idea of paying off the mortgage. I have been at the investment game for years don't forget the money you make on a 1000 dollar investment is taxable income. 1000 cash towards the mortgage is a guarantee.
As you have said, many factors have to come into play to select which route is better for yourself. There are a few criteria to should be considered when deciding which route to go for. Is the rate of return of investment higher than mortgage interest? Tax on capital gain by government depending on countries. If there is such a tax, the returns and rate of investment have to be higher than both tax and mortgage interest combined. Is the climate/confident of investment good? Is the economy safe to invest? Thanks for the simple, yet detail explanation of how compounded interest and investment of a 1000 dollars early on makes such a huge differences in the end of 30 years.
Paid my mortgage. It feels great. I now have 27 rental units all without mortgages too. You are exactly right about under 5% home mortgage rates being low however few people actually DO invest all the money in the market AND you are comparing apples to oranges when you make such a comparison. You have drastically increased risk when you take 3.6% guaranteed verses the risk of investing. Your comparison to be fair should be to fixed and secured investments. When comparing that the 3.6% fairs much better. Under your scenario I should take the 5% home equity loan and buy the market for 12% historical gain. I have actually thought of that back of the envelope calculation but it just feels great having zero debt. I like it. While I am not afraid to roll the dice in this case I really like zero debt then you have MORE funds to invest!
We have been trying to wait to make bigger payments on our mortgage so I could invest that money. Investing money is hard so we have decided to pay off our mortgage in the next 4 years instead of waiting the 15 years. We would save about 150k in interest by paying it off this early and then after that we will start trying to build some businesses.
@@jrod16sports paying off the mortgage is best for most since it is guaranteed and not risky at all. If you get a match on 401k money then take that first otherwise paying off the mortgage gives you more options. Buy the QQQ or SPXL or TECL ETFs or something like that and if the market goes down just think that you are buying cheaper. Keep plowing money in and you will retire rich. History says the market will recover and broad indexes will hit new highs if you hold.They hit new high this past week.
@@jrod16sports risk is such a abstract thing to think about when talking about paying a mortgage early vs. investing it. The best advise I've seen that puts it into perspective is this, if you had a $300,000 paid off house would you then go to the bank and take out a $300,000 loan at 4% interest to invest in the market? No, you wouldn't because it's extremely risky that is essentially what you would be doing by not paying off your house early and investing that money instead. By reversing the thought process the risk is laid bare.
@@foxhound34 this a great analogy Derek, thank you for taking the time for your kind comment. We are minimalist so we rent our basement and we don't have debt besides the house. We have about 200k left on the house so hopefully we can pay it off in the next four years. I have also heard that people that have their house paid off are in a better mental state to make better investments since they virtually don't have any expenses.
i had no idea that u can reduce ur mortgage like that i have not bought my home yet but u sir just saved me so much money. thank you so much man i feel rich right now
Thank you for appearing on my recommended videos. I need great content such as this! Great point on making extra payments early, we're on our 2nd year of mortgage, planning to get rid of all our other debts while making extra payments on our mortgage. Hopefully in 15 years, we'll be debt free!
Levi did a very good job explaining the math. He's in Canada (go, Maple Leafs!), but here in the USA, there are 2 other calculations that should be considered to see the end / net results. First, don't forget that there are capital gains taxes that will need to be paid on growth of the investment. Second is the benefit of being able to deduct mortgage interest from a person's taxable income. Once those two factors are taken into consideration then you weigh out the decision remembering that making an extra payment into the mortgage has a guaranteed return whereas investing money requires some risk.
Another great video how dividend investing is more profitable then paying down mortgage. I was going to put 5 k last year on my 340k mortgage until I watch your old video about paying down mortgage or investing. Well I decided to put 5 k on my tfsa investment account, not my mortgage. My interest rate for my mortgage is 2.9% fix rate and my investment return to date (7 month) is 13% growth overall and 5.3 % average dividend return. I know If I’m ever financially in crisis, I can withdraw my tfsa tax free. Hopefully it never happens.. if I pay my mortgage down at this state I can never get that money back if I’m financially in trouble. It’s not for everyone, and I do get this from your videos. This is working for me at my stage in life. Young, and building my family future. Thanks!
@@christianvega3850 Imagine you had 100,000 to invest. Would you rather put it to something that will make you 15% per year, but at the cost of 3% going to the bank, or something where the bank makes nothing off of you, but you only make 2% per year? Hypothetically, of course.
The return on your money from paying off your mortgage is risk-free. Stocks and most other investments have a risk of losing value. I am not aware of any way to earn a 7% risk-free return on your investment.
The net-present-value of $2,700 paid over 30 years is practically zero. The investment angle is much better. The key is to buy a house that you can easily afford, put enough down so you don't pay PMI and you're protected against any market value decline. Then get a 30 year mortgage and just pay it on time. Take the excess cash and invest it. Many people want to pay off their homes so they have security and don't have to worry about losing their home, and that's understandable though the risk is lower than they realize if they made the right choices when they bought. Also, if you have the kind of life events that cause people to lose their home, you might lose it anyway. Finally, your risk is greatest during those number of years yiure trying to pay it off and much, much lower in those later years when your income is much higher and you're more employable. The other reason people choose to focus on mortgage rather than investing is that they don't know how to invest or believe it is a scam or too risky. And it can be hard to learn. However, if you choose the pay off mortgage plan, and your neighbor chooses the invest plan, when you're both retiring, you'll see the difference in livelihood clearly.
Great video! I had a business professor in college who had a similar, but bolder theory that he actually did - rent a home, and invest the difference between the cost of renting and the cost of buying. By year 30, you can pay cash for the home from investing. Risky, but the math lines up.
Thanks was trying to explain this, but you already did the work for me! The key is to Invest the money, people have a hard time seeing a lump of cash and not spending it.
Wish I had thought this one out years ago. Bought with a 30 instead of a 15 and now 13.5 years in, still owe a ton of money instead of being close to having a paid for house. Life.
13.5 years into 30 is better than you think. Now any extra payments will still help pay it down faster. Good luck with your journey. Keep my posted when you are mortgage free.
Paying anything extra the first 5 years of a 30 year Mortgage has the largest effect. Interest is front loaded. The first payment only sends like $15 to principle.
even worse on a 30 year mortgage, nobody should be taking 30 year mortgages. 15, 20 tops. in my opinion... i also don't agree with people financing vehicles for 7 or 8 years,... then trading after 3-4. vicious cycle of debt and bad decision.
i have a high-yield interest bearing account and i earn $100 or more in a year than i would with low rate options. but totally different from having running investments that earns me over 40% monthly with instant delivery.
@@alanbalinski5655 Mutual funds, Stocks, Options. Forex market. Forex can be a very good deal compared to stocks. The advanta'ge of a forex lnvestment is that the trader is using leverage. to potentiaI lnvestors Forex is a good way to make a nlce ROI most specially with the help of a professionaI portfoIio manager
i'm a profitable Forex Trader. I'm not a billionaire but I'm making stable profit every month. I started to learn Forex when I was 18 years old. And practice a Iot opening BUY/SELL orders on demo accounts
Awesome video. I just bought a house in June. My house was 160k. 4% interest for 360 months. Currently I have paid enough payments to where I don't have another payment due until Jan. I plan on keep making my regular payments and extra when I can but its cool to see how much money Ive saved
Great video, I like the way you break down the difference and when it makes sense to pay down your mortgage vs when it's better to invest then paying down mortgage.
I have run the numbers for my own situation. The one thing this video does not show is taxes and risk(7% dividend is riskier). This is what i get when i ran my numbers: i have $1700 extra per month and if i pay towards mortgage(20 year) I can pay it off in 4.5 years and save $61,590 in interest. If I invest the same $1700 per month for 4.5 years @ 7% i would make $9500. You have to remember that the mortgage rate is also compounded.
You haven't provided enough information for me to verify, but some of your calculations are incorrect. $1700 month put into investments for 4.5 years is $91,800 (total deposited) + $16,366(dividends) = $108,166(total value at 4.5 years) I would assume you are paying a very high mortgage rate (close to 5%) in which case there is a lot of risk investing in a 7% dividend stock rather than paying down a mortgage.
My aunt and uncle paid their house off in less than 15 years by paying a little extra on their mortgage every month. Some months it was only $50, and others it was $100-$200. Any extra money they had went to the mortgage. Making extra payments that go towards principal makes a huge difference.
Awesome video! I'm new to investing (other than retirement accounts) and am thinking of buying a house soon so this was absolutely fascinating to me. The only thing I was not convinced about was finding a reliable stock that pays a monthly 7% dividend these days.
Good vid! But my concern is putting the $1000 towards the principle of the bank note IS a guarantee of your investment where as $1000 in the stock market has no real guarantee. Higher risk is higher reward for sure, but I like the "sure thing" of the extra going into paying off my mortgage. Great video, great content. Thanks for doing this!
Absolutely agreed. We have to always weigh the pros and cons of each choice. That’s why for the first year of my new mortgage we have been making over $850+ in extra payments. Will stop that soon and get back into padding our investments instead.
I appreciate your caveat at the end about how it makes you feel. Feelings are very important in PERSONAL finance. I have 2 main objections to this concept. 1) Where on earth are you finding a stock that pays 7% monthly? Because if that exists, I want in. 5% quarterly on a stock that is actually growing would be phenomenal. 2) You're talking about the risk of the stock market for a best case scenario or coming out $4,000 ahead after 30 years. If $4k in 30 years is going to be life-changing money to someone, they have more important things to worry about than paying down a mortgage vs investing. Keep it simple, just pay down the mortgage, it's a guaranteed return and creates peace of mind, unlike the stock market which is no guarantee and causes most people anxiety. Thanks for a good well-thought-out and balanced video.
You're wrong, he did 7% annually, but he simply converted that to get his first month's number of 5.83 ($1000 / 12 months * 7% = $5.83). I do agree that a lot of people may not hit 7% annually though, so your point is valid.
Very informative! Now imagine paying an extra $1k to your mortgage a few times instead of just once... all the extra money you save on interest and the overall paydown of the loan. That frees up more capital than your investments would likely garner (unless you had a formidable and very consistent return on that investment), and allows you to have access to all of of your income way earlier (assuming no other debts). Then, the sky's the limit.
Thaaank you Drawbridge! Love the visuals, you can teach a finance class in high school!!😊. As I'm nearing retirement my favorite past times are learning how to invest more and definitely lowering my crazy outlandish interest mortgage rate. Thanks for making my week. Stay healthy n blessed.
Love this video. It's all part of a portfolio of risk and risk management. My wife and I treated our house like a "super safe investment" and once it was paid off we allowed ourselves to invest in more aggressive higher risk (and hopefully higher reward) investments thereafter. It just made us feel good, like owning insurance to know that we actually owned our house when we are otherwise investing in stuff that could have a bigger downside.
Would be a good video to perform a continual extra payment analysis to pay it off in 15 years. Having the financial freedom of no mortgage payment is huge and can’t be defined by solely by numbers. The reduced stress and flexibility of working a job that you like vs what pays the mortgage is HUGE.
Totally agree! You might think you are making money along the road, but what if you get laid off and whatever you are investing can't cover the mortgage payments and you are being forced to foreclose. I think for average Joe in the middle class, pay off ASAP and then use the extra to invest is better.
Great Channel. I live in Sydney, Australia and currently paying off a house on the fringe of the CBD. Our loan is 918k remaining on a 2.74% interest, home value 2m. Our income and investments we can pay additional $1900 a week which we do as our loan has no offset option and we simply just draw back 10k every second/third month and invest mainly in high dividends stocks with Franking or good businesses. Our goal is to reach close to $500,000 in investments within 5 years and just rent the house and travel as rent with cover minimum repayments and spare us additional income to explore the world. Just started stock investing and channels like this inspire me, thanks a bunch.
Awesome job Shane! Thanks for sharing your story. We have a similar travel plans with our home!! Sounds like you have a good plan in place to make that happen.
How does tax factor in? If your getting a 7% return on investment (being calculated and compounded monthly is unusual) but paying 30% tax on that income wouldn’t that bring the real returned be reinvested back down 5% Where as the 4.5% ( interest) saving is tax free and guaranteed, where the 7% is not guaranteed. This video is the exact thing I’m trying to work out. Except the loan is for investment purposes, which complicates is further.
That’s what I wanted to know too. Mortgage payoff is safer and guaranteed the investment is not guaranteed. Also it depends how much tax you would have to pay on the earnings from investment, the savings on mortgage is tax free.
Taxes factor in exactly as you think they do: they reduce your gains potentially. Where I live, there's 0% capital gain taxes. If you have a 30% tax at the end of it you'll need to adjust the final value by 30% to calculate realized gains. If you are in the US, my understanding is the top rate for capital gains is now 20% and could be lower depending on your situation. Basically the two variables that have to factor in is your interest rate and your realized gains on alternative investments. For me it's 2% interest and 0% capital gains, with penalty for early repayment on my mortgage. It's not even something I need to consider: just about any other investment beats my mortgage early repayment.
Tax advantage accounts like ROTH IRA or tax managed funds. A traditional IRA is also tax deferred but until you retire you'll be paying taxes on what you take out.
I think it’s super important to live within your means when it comes to purchasing a home. I will never work just to pay off my mortgage. I can make 3 mortgage payments a month if I wanted to, based off just my salary alone. My method may not be the best, but I dig it. I pay my mortgage every month, then make an additional $500 payment towards the principle. 🤷🏻♂️
When me and my husband decided to buy our home we decided based on price as well. Obviously it had to fit out family but my though was “what if one of us looses our job and we are living on one income.” Now he’s laid off due to COVID-19 but we are fine. I’m still working and can afford all of our bills.
About to sign for a mortgage at 3% flat 30 fixed this week, and I’m totally using this! Though I might try for a bit more paid down ($1200 or $100/mo saved after the first year) looking forward to paying that loan off in no time! Rates are nuts now!
Excellent analysis and really accurate calculations... (first video I watch and convinced me to subscribe, smart) However, here's my catch... putting the extra payment towards the mortgage basically converts to a really safe way of savings on the interests (almost assured), on the other hand... An investment with a 7% return will not be as safe or assured, as almost all investment will depend on your instrument, market conditions, etc... So, I just want to mention this as a side note for the average person. If you are an individual dedicated to understand your investment portfolio & strategies and keep up to make sure you will maintain a decent return (at minimum, higher than your mortgage rate), it's absolutely reasonable to invest elsewhere... Just mentioning for the average reader/viewer who does not plan on maintaining a portfolio of investment instruments, then, it'll probably just be good to at least save something by putting it towards your mortgage interests. Again, really good job on the video.
One thing to consider if living in a high inflationary period. You then may be paying the mortgage with money that will be less expensive in later years. As you stated if an investment of the money has more value than paying the mortgage it may be worth investing rather than paying off the mortgage.
I have yet to see a drip being allowed with just a $1000 investment. That is a very big detail that is missed on the comparison but your point doesn’t change. Good video that made it easy for people to see the power of long term investing.
$200k is a "really low mortgage value" in Vancouver. Meanwhile in the midwest that is almost twice the value of my first home and still much higher than what I paid for my next home. Good info, though.
It's usually around 50% of the payment back in interest at current rates over a short mortgage. Longer larger mortgages at higher rates would return a lot more over the span. To add to that every overpayment makes your normal payments more effective.
Remember guys mortgage interest is front loaded so the more you can pay in the form of additional principle payments the first year the more you save on the back end. I really wish he would have done a comparison with her paying a $1K extra month on the first payment. Never forgot to take advantage of this you need more time than money. So my advice to all is pay additional principle payments on the first month and keep going from there.
How many months would recommend paying extra. Would paying am extra 500-1000 a month for the first year be a sound strategy? And then invest in stocks and make 7 percent return?
Good for you! Do it EVERY MONTH and you will save tens -- possibly hundreds -- of thousands of dollars off of your mortgage. It is FAR better to put the extra money into your mortgage every single month, than to throw it at the stock market and take a chance on losing every penny if your stock goes down.
240K loan 4.74% interest rate (market high. I know it is going down now). My husband makes the mortgage payment and I make $600 monthly extra payment, and we will pay a 30 year mortgage in about 13 years and we'll save about 120k in interest. My payment of $600 a month will make a huge difference in the life of the loan. We are very frugal with our money. We don't make tons of money, but we are very careful on how we spend it. The saying is true "it's not how much you make. It's how you spend it"
Subscribing. I love this kind of analysis! Too many RUclipsrs just talk and don't explain the monthly long term numbers! love it. Also, love the comparison between RE and Stocks since all of us usually have a mixture of both. thanks!
I enjoy videos like this! Nice job! Although I'm of the school of thought in favor of paying off the mortgage early and not investing that and thinking I'm going to make more than paying on the mortgage :D I still appreciate everyone's point of view.
Would like to see a similar video except over a 30 year period a person pays off there home in 5-8 years and then for the next 22-25 years invests what the mortgage payment would be. In that case I think paying off the house wins, using 4.5% mortgage and 200k loan.
Andrew Gisler- Theres no better peace of mind than having a house that you have no financial responsibility to, other than property tax, repairs and insurance. Paying off your mortgage is no risk because you're putting your money in an investment that is an essential necessity in life. Once paid off you can have a surplus of extra cash every single month. Stock markets are risky!
Extremely easy voice to listen to. And the examples are the type of math I love to play with on mortgage calculators. This was right up my alley because I paid a year worth of extra payments after refinancing my original 30 year down to a 15 when I still had 22 left to go. Saved on the rate as well by doing so. Shorter term, lower rate and extra payments. Looking forward to being free very soon. Investments are wonderful of course but setting up for retirement with no cash outflow for a mortgage is necessary to truly be retired.
Thank you for posting this video - I really enjoyed it and as someone who is only about two years into paying off a mortgage it really was educational.
Hopefully will be paying it off this Xmas. 20 years early. But we have made many sacrifices. Paying extra whenever possible and holding off on buying many things.
That is also a few days before my target 🎯 date as well actually, my birthday 🎂. I'm hoping that nothing goes wrong. I live and the Lord spares my life and my family. I'm excited and at the same time scared. Every extra dollar goes directly to PRINCIPAL. I'm broke but it a happy broke.
Worst desicion ever!! Why pay a loan with 2.5% before time? That's almost free money. Invest the extra money somewhere 3lse and you will make more than 2.5%
perfect timing for me to find this video and channel..lol.you made it very easy to follow. Thank youl!! will check for more info on your channel for mortgage info. keep it coming.
I decided I’m going to paying extra on my mortgage every month whatever I can comfortably afford and on the anniversary of closing make a full extra mortgage payment. I just bought my house, but I’m working on getting rid of pmi as fast as I can.
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your math is flawed, ever 12 year the stock market wipes out your earnings, so your not earning any dividends.
Hello, shouldnt the total principal payment say $199,000? She paid an additional $1000 so the additional payment column plus the principle payment column would equate to the $200,000 loan. Your sheet is showing a $200,000 paid in principle so it looks like she paid $201,000 plus interest for a $200,000 loan. Am i missing something somewhere?
Even though it's 4.5% interest, you'd have paid close to the amount of interest in principal by the end of a 30 year loan.
@@mattx9260 Look at the S&P 500 over a longer period of time. 20 yrs ago in 1990 it was at $325. Now it's at $2950 in a down market.
You should do this again with an intrest only mortgage and take into account inflation eating away at the principal
Paid off my mortgage yesterday. 5 years early. 🤗
Congratulations!
Buy less and pay more!
Enjoy your debt free life
Congratulations! That is a huge accomplishment. Now you will have more liquid cash to put into investments:)
Congratulations!
Congratulations! Can I borrow $500 😃
congrats
Great advice. Right from the start of my mortgage I paid bi-weekly and paid extra on top of that. My monthly payment was $1200 but I paid $900 every two weeks and twice a year an extra $900 went on the principal. I paid my 30 year mortgage off in 9 years and saved over 100k in interest. Debt free is awesome!
Love hearing these stories. Thanks for sharing and being an inspiration to us all.
TD Li Do you think you now , Owe really owe your home? Think again, You have to pay Taxes on that Home the rest of your life,,..Franklin Said to the American People, There are 2 sure Things in Life! Death And Taxes.
I'm curious what was the loan amount? My wife and I just closed on a house and want to pay this sucker off ASAP
td li @God Bless You 💕🙏💕...I’m praying 🧎♀️ to be able to pay my mortgage OFF within the next 10 years or LESS!!! By the Grace Of God💕🙏💕🥰 I’ve been debt free before so I know it can be done ✅!!! This time I’m REALLY doing it for ME!!🙏💕🙏🥰
Lupe V. Medina @ It’s much less than a mortgage!!!!💕🙏💕
Paid my 200k loan with a single income 23 years early. For 7 years we live pay check to pay check on purpose. All our income tax goes to principal for 7 years and I pay $2000 extra each month. I work 3 jobs to make that happens. And all the sleepless nights paid off. Thanks God for keeping me healthy for the last 7 years. And now my family is enjoying all the hardship and dedication we made as a couple.
Congratulations!!! I love financial freedom Stories like this.
Congrats dedication pays off!!!!👀💯
Too extreme fuck that. Money is stupid cheap. Just imagine had you invested all that money instead.
@@MatthewSmith-uf6tr I'm not good as you in investment. All I know right now is we don't have any single debt and we are enjoying it. That 2000 extra that I put in mortgage before. Now is in good shape after 7 years we can purchase another house with cash that's probably my SAFE
INVESTMENT.
@@DrawbridgeFinance Yeah, now your free to pay more taxes with no mortgage deductions. Better buy a second house.
You can never go wrong paying off your mortgage as soon as you can! Get rid of debt! Great video!
So true!
I loved this as I am about to invest in uk property with 70k deposit (plus fees and more savings for furnishing and decorating) to buy my own place, but I am also treating it as my fourth investment, having two spare rooms for lodgers to cover this property mortgage and tax costs... and to build my equity whilst working my day job for my next investment.
Hello, I am in London and am considering investing in real estate as a way to get some passive income. A few years ago, my brother purchased a home in a county outside of London. Because he was unable to find tenants, the property was eventually repossessed. As a result of this experience, I'm concentrating on purchasing real estate in London, where it's quite challenging to obtain a mortgage because of the high cost of the properties. Would you kindly recommend an easy way, where one may try to sustain these cost on mortgage?
First, Jessica you need to have a salary of at least 25k before you will be considered for a mortgage, that you need for properties. If you want to achieve a 75% yield yearly, try looking out for an investment management coach or else you will be competing against professionals themselves.
Generating returns are usually phenomenal. What would have been really interesting would be a proper breakdown showing their costs , services, investors return..
That's an intentional way to live, that's the only way to become debt free. I've already paid off two previous mortgages. Now I'm working on my third and I cannot wait since it has to happen before retirement in four years and I'm already getting there the proficient way, Luckily for me my trader and coach Frost Hilda has been using every opportunity to ensure I benefit from each turn the market takes.
Good luck staying debt free as much as possible in the future.
Absolutely Zachary, contract agreement splits are favorable, I’m also exceptionally well positioned as I’m privy, so that’s a good return deal for any investors creating revenue for more interest.
There should be a class in the last 2 years of high school about this.
Agreed!
Have you ever heard of Dave Ramsey? He teaches this stuff, he even has a class for high school.
The government and banking lobbiests won't allow it.. they wants you to be a slave to the system and be lambs.
I agree. Unfortunately, the educational system focuses more on getting us into debt and feelings. These are real, everyday economics. Awesome video. Thank You for the information.
It is taught in high school, basic interest. People simply don't think about it.
I started to make extra payments to remove mortgage insurance from my payment.
I realized that after making normal payments for over 8 years, I still didn't pay down enough to remove mortgage insurance.
I was still 10000 dollars short.
So I started to make extra payments.
Man!!!
That does make a difference.
June 2017 I owned 97k
June 2018. 77k
June 2019 58k
I'll payoff my house in 3 years.
In 3 years I'll be 43years old guy with lot of disposable income.
Jiri Zhanel nice!!!
How much was the extra payments? Did you pay them monthly to the principal?
Did you put it in as a regular payment or towards interest or principle?
How much extra were you paying a month?
Extra mortgage payment towards principal is the way!
I’m doing a 15 years loan instead of a 30 years. I got about 4.5 years left. I might just pay it off in 2 years. Great content man.
I also got 15 year loan interest rate is 3.50..
i got hair better rate 3.15
We chose that rate becuz bank offer to pay 4000$ on closing costs.
This effect is known as the “time value of money”. I hear many people talk about that banks require you “to pay all the interest up front” and when you look at a mortgage amortization it certainly seems that way, but the truth (and the secret to the math in the video) is how many times the interest on your loan gets compounded.
You have an annual interest rate when you purchase the loan, say it’s 4% or .04 annually and you make monthly payments. But the interest is not calculated annually, nor monthly... but daily. So every single day of your mortgage the bank takes the balance of the principal and multiplies it by 1/365th of 4% and that’s what you pay in the following months payment. So if you have $200,000 balance at the beginning of the month, each day you are charged 1/365th of 4%, or .00010959 times 200,000 which comes to $21.92 a day you pay the bank to owe them money.
This is why you save so much in interest anytime you pay down a little more of the balance, because every single day there is less principal to charge interest to.
I don’t even think most mortgage brokers could present that information as well as you did. Thanks!
awesome explaination!!!
thank you for it!
😮
So much value in this video - purchasing this spreadsheet from you. Don't even care if they have free ones on the internet - have to support your work after obtaining so much value. Thank you!!!
Thanks!! Let me know if you have any specific questions!!
Why purchase a FREE amortization spreadsheet? I made one with a well known formula. Save your money!!
i moved in my house back in 2016, took out a loan for $121,000 after putting 6% down.
my monthly payment is $825, however im single now. and im saving a lot more money, and i got two roommates to move in. im currently making $3,300 mortgage payments per month!!! im literally skipping 9-13 months per month off my 360 month note. i make $60-70,000 per year, and i do not have a car payment, credit card, medical, or student loans!
Nice!!
Paid off mine in December it took me 9 years by sending all the extra overtime I made for 2 reasons first I never got used to the extra money that's was there then is not there now due to being OT second I saw it as for every dollar I send to principle I'll save one or 3 dollars in interest in the long run depending where you at in the 360 schedule payments!! So I'm 42 with no mortgage looking for the next 20 years of investment opportunitys!! If we make it thru the Corona virus lol
congrats on being mortgage free at 42!! that is amazing! let's make some investments together
Good for you!
Since I landed my new job. I have been paying an extra $1000 every month. Gonna have my 30 year mortgage payed off in 5 years.
Damn! Good job! I love when people take what they want and do it!
Make sure that you are applying the extra $1000.00 directly to the Principal.
Which state u live in
Troy Maddox,But in the end , your paid up Mortgage , Well Actually you dont owe your Home, If you dont pay Taxes your Home will be confiscated By the Govenment
@@tjones2550 how do you apply direct ly towards the principal and not the interest?
I dig your format DB, 'just subscribed.
Also I'm 7.5 years into my mortgage. I've been throwing an extra $50-$200 per month direct to principal. I've been doing this since the beginning of the mortgage.
For me it was a major motivator when you see you pass the point where you're automatically paying more principal than interest.
On top of paying it off sooner, I also put funds into investments as well. I enjoy tackling this financial thing from all sides! 💰😀💵
That is our approach as well. We have been hitting our new mortgage with 10% extra every payment and starting in month 15 we start to reduce the extra payment every two months until we hit the point when the interest portion is less than the principal portion without any extra payment and then we just pay the minimum. All extra cash each month goes to investments. Especially now that this down turn has started.
If you pay $100 more on your mortgage payment it will equal to one extra payment per year. This will reduce your 30-year mortgage t o 25 years
If you are thinking straight math then yes. But most mortgages don't work like that. In this videos example the guy made 1 payment and it reduced it 3 months and saved around 3k in interest. The sooner you do that the more compounded it will be and the more you'll save. The key is to make sure your extra payments are going straight to your principle and not being counted as early payments. Sometimes you'll have to call and make sure they're handled correctly
This is not right. If I have a P&I payment of $2000/mo, and I put an extra $100 into each month, It will equal 3/5 of an additional payment every year.
Actually 50$ a month will cut 2 months off your loan a year. At least that's working for me
I made 5 extra 50 $ payments and it knocked off 2 months and 924 in interest off the mortgage
That depends on your balance. If you take it a 50k mortgage it will cut way more, if you take a 2M mortgage it will cut way less. There's no universal $=saved time figures
I love content like this. You did a great job explaining the different factors affected by extra payments. Once I realized an extra $100 payment a month would shave off over 4 years from my loan it became my new standard. Tinkering with these amortization calculators is fun.
Glad you enjoyed it!
totally agree!!! best of luck paying your place off! i just bought a place so im at square 1 right now :)
@@camiiii31 you can do it!
I paid my mortgage off 9 years early. Wasn’t easy but it was the best financial decision I have ever made! Even during this COVID crap I was able to get it done. My mother would be very proud. #Thankful
One of the best videos on this subject... It was simple, the grapgics were good and very soothing and sennsible way of speaking. Thanksnfor the video
Thank you:)
Great information. I just made my first mortgage payment. My goal is to pay extra directly to the principle every month.its amazing to see how one payment effects the whole loan. Thank you for sharing.
Paying my mortgage this year in September 2019 9 years earlier.😀😀
Congratulations
@@DrawbridgeFinance Thank you.
I pay extra on my mortgage principal biweekly 👍 I read an autobiography by Geeneen Roth who lost her life savings when she was in her late 50s (approx. $850k-$1M I can't quite remember) to Bernie Madoff's Ponzi scheme. She still had a mortgage on her house (approx. $300k). Her biggest regret was not paying off her mortgage before investing heavily. She regretted it SO much. For me, the security of owning my house is worth it. Besides, with a mortgage you are dealing with compound interest in reverse. That low 3-4 percent mortgage interest rate isn't that low when you consider that ❤️
3-4 percent is low. Use the rule of 72 and tell me it's not.
and don't invest in ponzi schemes.
I am also currently making extra mortgage payments but only because I am in my first year of this mortgage.
@@DrawbridgeFinance Lol. Yes, I stay away from Ponzi schemes whenever possible 😀 I invest in low cost index funds from Vanguard in addition to my pension contributions. To each their own, however for me home ownership is worth it. Maybe it's my female security gland acting up, as Dave Ramsey suggests. Either way I definitely think paying extra on the mortgage in the early days is best. Later on it's up to personal preference. Personally I want to own my house asap.
@@LMCEK Love Dave! Sounds like you have a good solid foundation. Glad you're watching and commenting. I would love to build up this page with more people like yourself who are educating themselves and making informed investment decisions.
The interest gains on an investment are taxable, the interest savings on the mortgage are not taxable income,. So even if you could get a higher return on an investment, you may not be making more money.
Very true!! This should all be part of the strategy! 💰 Join the club for trade alerts and private chat: www.patreon.com/drawbridgefinance
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Smith Manoeuvre? Leverage the
equity developing in your home. Reap the tax perks.
Paying more in interest for a tax break is like paying a dollar to save a quarter. Would you rather pay an extra $1000 dollars in interest just to get $ $250 back at the end of the year? I much rather have the extra $1000 dollars to invest or apply to the principal.
@@deepdoodoo3252 my mortgage payment includes principal, interest, insurance, home taxes. I lose the % on the mortgage, feed the market for a %, and use the delta market vs. HELOC to pay the interest only on the HELOC. In the end you can continue to pay interest only or cash in your growth expanded portfolio, but why you would beats me.
Netting 7% annually for thirty years after costs is a big ask, but gains should be tax free using a capital gains allowance. Great content and along the lines of what I advise my kids, along with how to be positively, happily and productively engaged in order to make an income
Paid off my mortgage yesterday. 20 years ahead of the original 30 year loan!!!! Best decision.
No, you threw your money away. Did you not watch the video?
@@a46475
There’s a lot more to paying off your mortgage than the financial aspect. Having that asset paid wholly and a place to live indefinitely is a huge sense of relief for many people. I pay extra on my mortgage as well as invest heavily in the market. If the market tips upside down for a few years and all of the sudden you’re struggling to pay the mortgage, those beat down shares don’t look quite so appealing. I like a balance of both. Too each their own.
My husband and I pay 1,000 to 1,500 every month on the principal. We will have our 30 year mortgage paid off in about 7 years, I think.... we also put down a large down payment. We know nothing about investing and decided to pay on the principal instead. We want the security of having our house paid off. I admire what you’re doing, amazing!!!
That's a good thing baby should go buy a rental property multi-unit 3 unit 4 unit building but being a landlord isn't for everybody just a few the brave or crazy or the wise or pick all three.😊😊
Great video ! Just subscribed from Calgary Alberta. Just bought a 300k condo and did 45k down payment and this gives me some great advice! I'll start doing more lump sum payments
Finally a practical video seeing the real impact of the numbers ! Thanks so much!
You’re welcome. Thanks for commenting.
Great, informative video... When I bought my house 16 years ago, I took out a 5/1 ARM, as I did not plan on being in the house too long. At the time, the market was hot... as were prices... and I did not really like the house... but it was close to work, in a nice neighborhood, and in my price range... so I bought it. Then came the housing crash in 2008. I was VERY upside down on my mortgage... so I was stuck there. Luckily, once the mortgage started to adjust, it worked in my favor & my interest rate went down for several years. When things started to improve, I looked into doing a re-fi. I timed my re-fi pretty good. I got into a 15 year fixed at 2.75%. Due to the shorter term, my monthly payment went UP... by about $500 per month. I decided to try & whittle down my mortgage balance somewhat aggressively. I took the approach of making an extra mortgage payment per year... so I divided the extra payment by 12, & add that to my monthly mortgage payment. Yea, it hurts (especially in Southern California), but my balance is dropping pretty quickly. I also maxed out my 401k contribution at work. In addition, I have a $400 monthly draw into my brokerage account/Roth IRA... so I kinda still live like a college student... but it's ok. I'm 9 years from retirement... and when I DO retire, my house will be paid off & I'll have enough money in the bank to live comfortably... I hope!
Nice.
Good examples. Its something about paying the mortgage off early that appealing vs investing into stocks. So I would more than likely do what you are doing and pay extra towards the mortgage early if possible as well as invest in dividend paying stocks. Finding a balance that works on a individual basis👍🏾
Balance is great!!
As could be seen in the amortazion schedule, one could had saved a whopping amount of interest had the $1,000 been paid on the first payment, and even more had the next principal payment been made each & every month (for as long as possible). The sooner one makes extra principal payments the better, $1,000 every month for the 1st year alone would had put a large ding in the mortgage (about 4 payments for every one made) close to 25-26 years total. More if extra payments were made, even $100/month adds up to be a lot of skipped payments. For many, $100/month is realistic, just cut out a night on the town, pack lunch versus going out or skip the Starbucks in the morning & carry a fresh brew from home instead (this alone would easily be $100 saved). A combination of all three would be $200 eatra per month.
I was paying an extra $300/month in the early 90's (near 30 years ago), so it would seem that $500 could easily be done in 2020 w/out breaking a sweat (& we had childern, one in college). After all, lenders ensures there's money left over for extras before approving loans, even back then & more so after the 2008 crises. Usually no more than 35-45% of total income, to include taxes & insurance.
One can also do side gigs & pay all earned as extra principal on the mortgage. Me, I love to do PC work, could easily pay an extra $1,000 every month today from virus/malware cleanup alone at $100 per computer. More if I committed extra hours per month and/or including PC building profits. There are many profitable hobbies to persue, unless unemployed, no reason to allow the banks to rob us blind on the interest.
Yes Charles! Yes. Thanks for watching and commenting.
Thaaank you Charles!
I know its been a yr, but I just had to say: thanks for the honesty and motivation!
I started paying $100 extra from the get go. But then my mortgage increased by a whopping $110, about 2 yrs into it, and I had to reduce it to $50. But guess what, I'm looking at a tangible raise, plus I make about $20 a wk as a ghostwriter. I'm positive, I'll return to my $100 extra every month.
And I'm definitely eyeing that 1000 payment. I'm also a late bloomer investor...learning from my daughter n son😁.
I looooove rain (purity) advice from Real pple.
Stay healthy n blessed😊.
I have been trying to understand how extra payment work but never ever got it until now. Your explanation is the best! Thank you 😄👍🏻👍🏻👍🏻👍🏻
Thanks
Purchased my 3rd home in Nov of 1977. Paid on it until 1983 and decided to pay it off when I was 33. I was in a job that gave me an annual bonus that varied. In 1983, 1984, 1985 and 1986 I applied all those checks to my unpaid balance on my mortgage which I think was 7%. Paid off my house on Tuesday, March 11, 1986. There was a weight lifted off my chest and then I could invest my house payment every month. My point is that the faster or sooner someone can pay off their home is the faster or sooner they have a lot of investable cash that they are not paying in interest. A good example would be if Alice paid for her house say 10 to 15 years in and then saved that interest + the house note going forward. I know I would not be in as good of shape if I had house note most of my life. I did until I was Woke in 1983 ( when I realized I should be getting interest and not paying it ) and then paying it off in 1986. .
Thanks for sharing your story. I can't tell if you watched my whole video or not. Either way, it is why I also am choosing to make extra mortgage payments, as I stated in the video.
I did in fact see the end and I can only say that paying my house off was the single best financial thing I ever did. Not having a house note for the last 33 years enabled me to invest more because of the discretionary monies it gave me. Everyone is different, but being 36 when I paid off my home and with a wife and two small children the concern of a home was then lifted. A tremendous feeling of relief for me.
Damn, you have it good. I never had 50$ in my pocket until I was 18.
Bought my home at 20, followed dave, ill be paying my home off 18 years early just need a few more months to save! Blessed
Clutch info
Clearly thought out
Concisely explained
Subbed.
Thanks.
We started with a 180k mortgage amortized over 25 years. At year 5 we shortened the amortization by 5 years. This made 15 years remaining instead of 20. Our payment increased by $37.29 every 2 weeks. Not only does it save 5 years of payments, but an astounding 45K in interest over the 15 years. Our interest also dropped from 4.49 to 2.69 percent at renewal time, so some of the saving is from the reduced rate.
I wish they taught me this back in school. I learn more useful stuff on youtube than i ever learned in highschool. I have never had to use the pythagoras theorem once after highschool
Me too! That’s why I’m sharing now.
I like the idea of paying off the mortgage. I have been at the investment game for years don't forget the money you make on a 1000 dollar investment is taxable income. 1000 cash towards the mortgage is a guarantee.
As you have said, many factors have to come into play to select which route is better for yourself. There are a few criteria to should be considered when deciding which route to go for.
Is the rate of return of investment higher than mortgage interest?
Tax on capital gain by government depending on countries. If there is such a tax, the returns and rate of investment have to be higher than both tax and mortgage interest combined.
Is the climate/confident of investment good? Is the economy safe to invest?
Thanks for the simple, yet detail explanation of how compounded interest and investment of a 1000 dollars early on makes such a huge differences in the end of 30 years.
Paid my mortgage. It feels great. I now have 27 rental units all without mortgages too. You are exactly right about under 5% home mortgage rates being low however few people actually DO invest all the money in the market AND you are comparing apples to oranges when you make such a comparison. You have drastically increased risk when you take 3.6% guaranteed verses the risk of investing.
Your comparison to be fair should be to fixed and secured investments. When comparing that the 3.6% fairs much better. Under your scenario I should take the 5% home equity loan and buy the market for 12% historical gain. I have actually thought of that back of the envelope calculation but it just feels great having zero debt. I like it. While I am not afraid to roll the dice in this case I really like zero debt then you have MORE funds to invest!
We have been trying to wait to make bigger payments on our mortgage so I could invest that money. Investing money is hard so we have decided to pay off our mortgage in the next 4 years instead of waiting the 15 years. We would save about 150k in interest by paying it off this early and then after that we will start trying to build some businesses.
@@jrod16sports paying off the mortgage is best for most since it is guaranteed and not risky at all. If you get a match on 401k money then take that first otherwise paying off the mortgage gives you more options.
Buy the QQQ or SPXL or TECL ETFs or something like that and if the market goes down just think that you are buying cheaper. Keep plowing money in and you will retire rich. History says the market will recover and broad indexes will hit new highs if you hold.They hit new high this past week.
@@mecheckraise thank you for taking the time to reply! Will try that.
@@jrod16sports risk is such a abstract thing to think about when talking about paying a mortgage early vs. investing it. The best advise I've seen that puts it into perspective is this, if you had a $300,000 paid off house would you then go to the bank and take out a $300,000 loan at 4% interest to invest in the market? No, you wouldn't because it's extremely risky that is essentially what you would be doing by not paying off your house early and investing that money instead. By reversing the thought process the risk is laid bare.
@@foxhound34 this a great analogy Derek, thank you for taking the time for your kind comment. We are minimalist so we rent our basement and we don't have debt besides the house. We have about 200k left on the house so hopefully we can pay it off in the next four years.
I have also heard that people that have their house paid off are in a better mental state to make better investments since they virtually don't have any expenses.
Great information here! Everyone should take a class like this before purchasing a home.
This is a great video. Simple, clear illustration of the value of compounding. Easy enough for anybody to grasp.
Thanks!
Just paying off EARLY is awesome!
Any savings would just be icing on the cake.
i had no idea that u can reduce ur mortgage like that i have not bought my home yet but u sir just saved me so much money. thank you so much man i feel rich right now
So glad I could help!
Thank you for appearing on my recommended videos. I need great content such as this! Great point on making extra payments early, we're on our 2nd year of mortgage, planning to get rid of all our other debts while making extra payments on our mortgage. Hopefully in 15 years, we'll be debt free!
That sounds like a great plan!
You are a WONDERFUL presenter! It was soooo easy to understand everything. Thank you!
Thank you!
Levi did a very good job explaining the math. He's in Canada (go, Maple Leafs!), but here in the USA, there are 2 other calculations that should be considered to see the end / net results. First, don't forget that there are capital gains taxes that will need to be paid on growth of the investment. Second is the benefit of being able to deduct mortgage interest from a person's taxable income. Once those two factors are taken into consideration then you weigh out the decision remembering that making an extra payment into the mortgage has a guaranteed return whereas investing money requires some risk.
Thanks Mace! Those are great additions. I've always wished we had tax deductible mortgage interest like you do.
Go leafs!
Another great video how dividend investing is more profitable then paying down mortgage.
I was going to put 5 k last year on my 340k mortgage until I watch your old video about paying down mortgage or investing.
Well I decided to put 5 k on my tfsa investment account, not my mortgage. My interest rate for my mortgage is 2.9% fix rate and my investment return to date (7 month) is 13% growth overall and 5.3 % average dividend return.
I know If I’m ever financially in crisis, I can withdraw my tfsa tax free. Hopefully it never happens.. if I pay my mortgage down at this state I can never get that money back if I’m financially in trouble.
It’s not for everyone, and I do get this from your videos. This is working for me at my stage in life. Young, and building my family future.
Thanks!
WOW! That is an amazing return. I had a bit of negative year in 2018 (with my options) so I'm glad to hear that you picked better than I did.
TFSA only for Canada?
Don't know what a TFSA is? I have a video for that ruclips.net/video/WYZqrOnp7fo/видео.html
Another benefit of paying down mortgage is that it's a tax free saving. Your dividend income may or may not be taxed depends on if it's a TFSA.
Yes, but with current rates, putting it in the TFSA would be a better bet.
All about guaranteed tax-free savings & not letting the bank make money.
@@christianvega3850 Imagine you had 100,000 to invest. Would you rather put it to something that will make you 15% per year, but at the cost of 3% going to the bank, or something where the bank makes nothing off of you, but you only make 2% per year? Hypothetically, of course.
The return on your money from paying off your mortgage is risk-free. Stocks and most other investments have a risk of losing value. I am not aware of any way to earn a 7% risk-free return on your investment.
great point
The net-present-value of $2,700 paid over 30 years is practically zero. The investment angle is much better. The key is to buy a house that you can easily afford, put enough down so you don't pay PMI and you're protected against any market value decline. Then get a 30 year mortgage and just pay it on time. Take the excess cash and invest it. Many people want to pay off their homes so they have security and don't have to worry about losing their home, and that's understandable though the risk is lower than they realize if they made the right choices when they bought. Also, if you have the kind of life events that cause people to lose their home, you might lose it anyway. Finally, your risk is greatest during those number of years yiure trying to pay it off and much, much lower in those later years when your income is much higher and you're more employable. The other reason people choose to focus on mortgage rather than investing is that they don't know how to invest or believe it is a scam or too risky. And it can be hard to learn. However, if you choose the pay off mortgage plan, and your neighbor chooses the invest plan, when you're both retiring, you'll see the difference in livelihood clearly.
Great video! I had a business professor in college who had a similar, but bolder theory that he actually did - rent a home, and invest the difference between the cost of renting and the cost of buying. By year 30, you can pay cash for the home from investing. Risky, but the math lines up.
Thanks was trying to explain this, but you already did the work for me! The key is to Invest the money, people have a hard time seeing a lump of cash and not spending it.
Absolutely! That is why my rule #1 is....
Wish I had thought this one out years ago. Bought with a 30 instead of a 15 and now 13.5 years in, still owe a ton of money instead of being close to having a paid for house.
Life.
13.5 years into 30 is better than you think. Now any extra payments will still help pay it down faster. Good luck with your journey. Keep my posted when you are mortgage free.
Paying anything extra the first 5 years of a 30 year Mortgage has the largest effect. Interest is front loaded. The first payment only sends like $15 to principle.
even worse on a 30 year mortgage, nobody should be taking 30 year mortgages. 15, 20 tops. in my opinion... i also don't agree with people financing vehicles for 7 or 8 years,... then trading after 3-4. vicious cycle of debt and bad decision.
Very insightful that amortization chart looks so scary in the beginning...
i have a high-yield interest bearing account and i earn $100 or more in a year than i would with low rate options. but totally different from having running investments that earns me over 40% monthly with instant delivery.
yes investment is always necessary especially to the low-income persons
nteresting, but what exactly can i lnvest in that will yieId good proflts. Perhaps 25% Biweekly
@@alanbalinski5655 Mutual funds, Stocks, Options. Forex market. Forex can be a very good deal compared to stocks. The advanta'ge of a forex lnvestment is that the trader is using leverage. to potentiaI lnvestors Forex is a good way to make a nlce ROI most specially with the help of a professionaI portfoIio manager
i'm a profitable Forex Trader. I'm not a billionaire but I'm making stable profit every month. I started to learn Forex when I was 18 years old. And practice a Iot opening BUY/SELL orders on demo accounts
ls thls forex trading reaIIy a good buslness
Awesome video. I just bought a house in June. My house was 160k. 4% interest for 360 months. Currently I have paid enough payments to where I don't have another payment due until Jan. I plan on keep making my regular payments and extra when I can but its cool to see how much money Ive saved
Great video, I like the way you break down the difference and when it makes sense to pay down your mortgage vs when it's better to invest then paying down mortgage.
I have run the numbers for my own situation. The one thing this video does not show is taxes and risk(7% dividend is riskier). This is what i get when i ran my numbers: i have $1700 extra per month and if i pay towards mortgage(20 year) I can pay it off in 4.5 years and save $61,590 in interest. If I invest the same $1700 per month for 4.5 years @ 7% i would make $9500.
You have to remember that the mortgage rate is also compounded.
You haven't provided enough information for me to verify, but some of your calculations are incorrect. $1700 month put into investments for 4.5 years is $91,800 (total deposited) + $16,366(dividends) = $108,166(total value at 4.5 years) I would assume you are paying a very high mortgage rate (close to 5%) in which case there is a lot of risk investing in a 7% dividend stock rather than paying down a mortgage.
Thank you, very well put
My aunt and uncle paid their house off in less than 15 years by paying a little extra on their mortgage every month. Some months it was only $50, and others it was $100-$200. Any extra money they had went to the mortgage. Making extra payments that go towards principal makes a huge difference.
I like this example. Thank you for posting/
Awesome video! I'm new to investing (other than retirement accounts) and am thinking of buying a house soon so this was absolutely fascinating to me. The only thing I was not convinced about was finding a reliable stock that pays a monthly 7% dividend these days.
This is just the video I needed! Took me forever to get this kind of info from the lender!! You explained it so well! Thanks!
For my circumstances this is the best information I have read today.
So glad!
Good vid! But my concern is putting the $1000 towards the principle of the bank note IS a guarantee of your investment where as $1000 in the stock market has no real guarantee. Higher risk is higher reward for sure, but I like the "sure thing" of the extra going into paying off my mortgage. Great video, great content. Thanks for doing this!
Absolutely agreed. We have to always weigh the pros and cons of each choice. That’s why for the first year of my new mortgage we have been making over $850+ in extra payments. Will stop that soon and get back into padding our investments instead.
I appreciate your caveat at the end about how it makes you feel. Feelings are very important in PERSONAL finance. I have 2 main objections to this concept. 1) Where on earth are you finding a stock that pays 7% monthly? Because if that exists, I want in. 5% quarterly on a stock that is actually growing would be phenomenal. 2) You're talking about the risk of the stock market for a best case scenario or coming out $4,000 ahead after 30 years. If $4k in 30 years is going to be life-changing money to someone, they have more important things to worry about than paying down a mortgage vs investing.
Keep it simple, just pay down the mortgage, it's a guaranteed return and creates peace of mind, unlike the stock market which is no guarantee and causes most people anxiety. Thanks for a good well-thought-out and balanced video.
You're wrong, he did 7% annually, but he simply converted that to get his first month's number of 5.83 ($1000 / 12 months * 7% = $5.83).
I do agree that a lot of people may not hit 7% annually though, so your point is valid.
Very informative! Now imagine paying an extra $1k to your mortgage a few times instead of just once... all the extra money you save on interest and the overall paydown of the loan. That frees up more capital than your investments would likely garner (unless you had a formidable and very consistent return on that investment), and allows you to have access to all of of your income way earlier (assuming no other debts). Then, the sky's the limit.
It can be a very powerful strategy.
My mortgage was $130k I sent 1k extra a month.... paid it off in 7 year..
Thaaank you Drawbridge!
Love the visuals, you can teach a finance class in high school!!😊.
As I'm nearing retirement my favorite past times are learning how to invest more and definitely lowering my crazy outlandish interest mortgage rate.
Thanks for making my week.
Stay healthy n blessed.
The way you layed it out on the spreadsheet is perfect. People debate this all the time but its just math.
Thanks!!
Love this video. It's all part of a portfolio of risk and risk management. My wife and I treated our house like a "super safe investment" and once it was paid off we allowed ourselves to invest in more aggressive higher risk (and hopefully higher reward) investments thereafter. It just made us feel good, like owning insurance to know that we actually owned our house when we are otherwise investing in stuff that could have a bigger downside.
Great vid man, wife and I are about to close on our second house...we definitely will keep this info in mind! Thank you!
I'm doing a new video o the effects of payments towards two different mortgages.
Would be a good video to perform a continual extra payment analysis to pay it off in 15 years.
Having the financial freedom of no mortgage payment is huge and can’t be defined by solely by numbers. The reduced stress and flexibility of working a job that you like vs what pays the mortgage is HUGE.
Totally agree! You might think you are making money along the road, but what if you get laid off and whatever you are investing can't cover the mortgage payments and you are being forced to foreclose. I think for average Joe in the middle class, pay off ASAP and then use the extra to invest is better.
Great Channel. I live in Sydney, Australia and currently paying off a house on the fringe of the CBD. Our loan is 918k remaining on a 2.74% interest, home value 2m. Our income and investments we can pay additional $1900 a week which we do as our loan has no offset option and we simply just draw back 10k every second/third month and invest mainly in high dividends stocks with Franking or good businesses. Our goal is to reach close to $500,000 in investments within 5 years and just rent the house and travel as rent with cover minimum repayments and spare us additional income to explore the world. Just started stock investing and channels like this inspire me, thanks a bunch.
Awesome job Shane! Thanks for sharing your story. We have a similar travel plans with our home!! Sounds like you have a good plan in place to make that happen.
Great info! I pay twice principal each month
How does tax factor in? If your getting a 7% return on investment (being calculated and compounded monthly is unusual) but paying 30% tax on that income wouldn’t that bring the real returned be reinvested back down 5%
Where as the 4.5% ( interest) saving is tax free and guaranteed, where the 7% is not guaranteed.
This video is the exact thing I’m trying to work out. Except the loan is for investment purposes, which complicates is further.
That’s what I wanted to know too. Mortgage payoff is safer and guaranteed the investment is not guaranteed. Also it depends how much tax you would have to pay on the earnings from investment, the savings on mortgage is tax free.
Taxes factor in exactly as you think they do: they reduce your gains potentially. Where I live, there's 0% capital gain taxes. If you have a 30% tax at the end of it you'll need to adjust the final value by 30% to calculate realized gains. If you are in the US, my understanding is the top rate for capital gains is now 20% and could be lower depending on your situation.
Basically the two variables that have to factor in is your interest rate and your realized gains on alternative investments. For me it's 2% interest and 0% capital gains, with penalty for early repayment on my mortgage. It's not even something I need to consider: just about any other investment beats my mortgage early repayment.
Tax advantage accounts like ROTH IRA or tax managed funds.
A traditional IRA is also tax deferred but until you retire you'll be paying taxes on what you take out.
I think it’s super important to live within your means when it comes to purchasing a home. I will never work just to pay off my mortgage. I can make 3 mortgage payments a month if I wanted to, based off just my salary alone. My method may not be the best, but I dig it. I pay my mortgage every month, then make an additional $500 payment towards the principle. 🤷🏻♂️
Agreed. Too many people over extend themselves and buy a house that is too big/expensive and can barely make the payments.
When me and my husband decided to buy our home we decided based on price as well. Obviously it had to fit out family but my though was “what if one of us looses our job and we are living on one income.” Now he’s laid off due to COVID-19 but we are fine. I’m still working and can afford all of our bills.
Pay off your mortgage, putting money in the market involves Risk, paying off your mortgage is debt free 100% of the time.
About to sign for a mortgage at 3% flat 30 fixed this week, and I’m totally using this! Though I might try for a bit more paid down ($1200 or $100/mo saved after the first year) looking forward to paying that loan off in no time! Rates are nuts now!
Very good job explaining the math on making extra principal payments.
Just earned yourself a new subscriber. Great explanation of how this works.
Welcome Jim!
Excellent analysis and really accurate calculations... (first video I watch and convinced me to subscribe, smart) However, here's my catch... putting the extra payment towards the mortgage basically converts to a really safe way of savings on the interests (almost assured), on the other hand... An investment with a 7% return will not be as safe or assured, as almost all investment will depend on your instrument, market conditions, etc... So, I just want to mention this as a side note for the average person. If you are an individual dedicated to understand your investment portfolio & strategies and keep up to make sure you will maintain a decent return (at minimum, higher than your mortgage rate), it's absolutely reasonable to invest elsewhere... Just mentioning for the average reader/viewer who does not plan on maintaining a portfolio of investment instruments, then, it'll probably just be good to at least save something by putting it towards your mortgage interests. Again, really good job on the video.
Thanks Roberto!! Well said information.
One thing to consider if living in a high inflationary period. You then may be paying the mortgage with money that will be less expensive in later years. As you stated if an investment of the money has more value than paying the mortgage it may be worth investing rather than paying off the mortgage.
I have yet to see a drip being allowed with just a $1000 investment. That is a very big detail that is missed on the comparison but your point doesn’t change. Good video that made it easy for people to see the power of long term investing.
I re watched this video and it opened up my mind on how each scenario can save you money. Thank you for making this video.
Thanks!!
I just sent in my 1st extra $550 on principle and gonna do it every month! Can’t wait to pay mine off
Congratulations!!
$200k is a "really low mortgage value" in Vancouver. Meanwhile in the midwest that is almost twice the value of my first home and still much higher than what I paid for my next home. Good info, though.
Awesome job explaining why we should invest instead of paying down our mortgage when you have a low mortgage rate. Great Job
Glad it was helpful!
It's usually around 50% of the payment back in interest at current rates over a short mortgage. Longer larger mortgages at higher rates would return a lot more over the span. To add to that every overpayment makes your normal payments more effective.
Remember guys mortgage interest is front loaded so the more you can pay in the form of additional principle payments the first year the more you save on the back end. I really wish he would have done a comparison with her paying a $1K extra month on the first payment. Never forgot to take advantage of this you need more time than money. So my advice to all is pay additional principle payments on the first month and keep going from there.
How many months would recommend paying extra. Would paying am extra 500-1000 a month for the first year be a sound strategy? And then invest in stocks and make 7 percent return?
I'm in month 13 of a 360 month mortgage. I'm about to start throwing an extra $200 a month at my principal.
Good for you! Do it EVERY MONTH and you will save tens -- possibly hundreds -- of thousands of dollars off of your mortgage. It is FAR better to put the extra money into your mortgage every single month, than to throw it at the stock market and take a chance on losing every penny if your stock goes down.
@@deborahsimon1101 I actually did the math and it was staggering. Just a few extra payments here and there is amazing for your overall interest.
Thanks for repairing the score to 💯
U are a great hacker Chigga
Admin:usahackezone
Pay as if it was 15 year loan.
240K loan 4.74% interest rate (market high. I know it is going down now). My husband makes the mortgage payment and I make $600 monthly extra payment, and we will pay a 30 year mortgage in about 13 years and we'll save about 120k in interest. My payment of $600 a month will make a huge difference in the life of the loan. We are very frugal with our money. We don't make tons of money, but we are very careful on how we spend it. The saying is true "it's not how much you make. It's how you spend it"
If you make extra payments make sure it goes to principle, these payments will save you interest money
Subscribing. I love this kind of analysis! Too many RUclipsrs just talk and don't explain the monthly long term numbers! love it. Also, love the comparison between RE and Stocks since all of us usually have a mixture of both. thanks!
Welcome kacie! Let’s get rich together!
I havent even watched the full video yet, and I just want to say I love your disclaimer!
I enjoy videos like this! Nice job! Although I'm of the school of thought in favor of paying off the mortgage early and not investing that and thinking I'm going to make more than paying on the mortgage :D I still appreciate everyone's point of view.
Would like to see a similar video except over a 30 year period a person pays off there home in 5-8 years and then for the next 22-25 years invests what the mortgage payment would be. In that case I think paying off the house wins, using 4.5% mortgage and 200k loan.
Andrew Gisler- Theres no better peace of mind than having a house that you have no financial responsibility to, other than property tax, repairs and insurance. Paying off your mortgage is no risk because you're putting your money in an investment that is an essential necessity in life. Once paid off you can have a surplus of extra cash every single month. Stock markets are risky!
It pays to hustle early in a mortgage... Quite literally
Extremely easy voice to listen to. And the examples are the type of math I love to play with on mortgage calculators. This was right up my alley because I paid a year worth of extra payments after refinancing my original 30 year down to a 15 when I still had 22 left to go. Saved on the rate as well by doing so. Shorter term, lower rate and extra payments. Looking forward to being free very soon. Investments are wonderful of course but setting up for retirement with no cash outflow for a mortgage is necessary to truly be retired.
Thank you for posting this video - I really enjoyed it and as someone who is only about two years into paying off a mortgage it really was educational.
Hopefully will be paying it off this Xmas. 20 years early. But we have made many sacrifices. Paying extra whenever possible and holding off on buying many things.
That is also a few days before my target 🎯 date as well actually, my birthday 🎂. I'm hoping that nothing goes wrong. I live and the Lord spares my life and my family. I'm excited and at the same time scared. Every extra dollar goes directly to PRINCIPAL. I'm broke but it a happy broke.
10 year fixed at 2.75%. It'll be paid off in April of 2024!!
Worst desicion ever!!
Why pay a loan with 2.5% before time?
That's almost free money.
Invest the extra money somewhere 3lse and you will make more than 2.5%
I have a 15 year, other than that, I don't pay it down any faster.
perfect timing for me to find this video and channel..lol.you made it very easy to follow. Thank youl!! will check for more info on your channel for mortgage info. keep it coming.
I decided I’m going to paying extra on my mortgage every month whatever I can comfortably afford and on the anniversary of closing make a full extra mortgage payment. I just bought my house, but I’m working on getting rid of pmi as fast as I can.