This Mortgage Hack Actually Works! (Here's Why)
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- Опубликовано: 28 сен 2024
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About this episode:
There’s a trending mortgage hack floating around the interwebs claiming to save you hundreds of thousands in interest and shave years off your payoff timeline. In this video, you’ll learn how it works and why it’s ultimately not the strategy I personally used to pay off my mortgage early.
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Mortgage rates are currently at an all time high since 2000(24 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market
True, I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
in my opinion, it was much easier investing back in the 60s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
my partner’s been considering going the same route, could you share more info please on the advisor that guides you.
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
Mind if I ask you to recommend this particular manager?
I’m with Sonya Lee Mitchell, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
Keep in mind that during the 80’s people were encouraged to save due to the interest rates. Right now there’s very little incentive to save because those who are saving are watching those who are reckless taking it in. I’ve been trying to save for a home and it’s been discouraging to watch prices continue to not budge because there’s people willing to get into a mortgage where they’re paying 40% of their income. It’s insane.
To balance out your real estate holdings, I suggest investing in equities. If you're cautious, even the worst recessions can present fantastic buying opportunities. Additionally, volatility can produce fantastic short-term purchase and sell opportunities. This is not financial advise, but you should buy immediately away because money isn't king right now!
You're right! With the help of an experienced coach, I made some changes in my investments. I started with $321k, and now I have more than $750k by investing in stocks, ETFs, and bonds. I think housing prices won't go down much until there are more houses available.
@@mikegarvey17Mind if I ask you to recommend this particular coach you using their service?
'Gertrude Margaret Quinto' maintains an online presence. Just make a simple search for her name online.
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
I paid up all my mortgages in 2yrs while working with a Financial Adviser. I’m 50 and my husband 54 we are both retired with over $3 million in net worth and no debts. We got to realize that the secret to financial freedom is making better investments.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
Thank goodness you brought this up! Truly, investing has changed my perspective on how one can succeed in life; working multiple jobs isn't the optimal way to attain financial freedom and unfortunately, we discover this later in life. Currently earn as much as 10 grand weekly and this has improved my financial life. Great piece!
Wow, congratulations on your impressive investment success! Your discipline and focus on delayed gratification is truly inspiring. I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing? Thanks for sharing your story!
Do you mind sharing info on the adviser who
assisted you? I'm 39 now and would love to
grow my portfolio and plan my retirement
She's OLIVIA SULLIVAN FINANCIALS
she's a known advisor. I actually did look her up curiously and went through her credentials on her webbsite... Top-notch! I wrote her an email, hopefully she's accepting new intakes.
I'm definitely gonna check her out. Do yo have any idea if she manages family fund?
The hack I used on top of paying every 2 weeks was to take the amount of 1 monthly payment (in this case $2200) and divide that by 26 (which would come to $85) and add that to my biweekly payment. Over time I added more and more to that extra amount until I was paying $200 every other week by the end. The last $100,000 of my mortgage disappeared in no time.
Great planning!
By no time, you mean a few years right?
Thank you. Good idea.
Got. 30 yr mortgage. Made extra payments as I could. Paid it off in 19hrs 😊
19 hours is pretty impressive
@@collinhalligan9921 😯....🤔....😄..😁😂😂
Whoa less than 1 day?! Teach me your secrets.
So YOURE who robbed the local bank
Lol
Risk free investment rate (money market etc) is 5%+ currently. Put the extra payment amounts into a money market, pay taxes on the interest, collect interest, pay off the mortgage faster. This sort of triage opportunity won’t last forever but if you’re lucky enough to have a 2-3% mortgage you’re in the money
Just paid off our student loan yesterday! Our next goal is the house! We’re going to double our mortgage payment because we have the margin. Should be done in 6 years if we keep it up
As he said, make sure the extra payment goes to the principal only
My bank actually tried to credit me with multiple payments when i sent them additional funds
After several times and repeated calls after each mistake on their part i finally gave up and stacked the money until had enough to pay off the entire amount
Shysters
I thought the government was making college free and paying everybody’s loans off
@@wildtill9 and in fairness if you have the discipline and the appetite, on average investing your excess funds and using that to pay off in a lump sum at the end will get it done faster than just paying down the priciple.
@@Waddywoos360 thank you for your reply
@@Waddywoos360 This increases the risk of losing your home and is basically no different than leveraging your home to gamble at the casino (stock market)
I and my wife own single home family rentals. we have 200,000 U.S left on mortgages. We are now considering the possibility of maintaining 70,000 U.S annual income by selling and investing in stocks and bonds. How does this work out?
Sell and invest option is viable, but crucial to consult a reputed f/a for income projections aligned with your goals.
I agree. . .monicamarystrigle; a renowned figure in manhattan, grew my entire portfoloi by 227percent last year
I'm in charge of fund allocation while they handle the copying trades from master to my account.
There are a good bunch as well as a bad bunch. You gotta do due diligence and use discretion. I work with Monica Mary Strigle sh’s big timer in New York w/ over 600 m worth assets under management
How can one get to interview advisors? And what questions should you ask?
Making one additional payment each year in December is not the same as bi-weekly payments. You pay interest on an amortized loan everyday that you are borrowing the principal. With bi-weekly payments you have 2 partial payments through the year directly to the principal balance therefore reducing the interest accrual. If you make one principal payment each year, only in December, you’ve already been charged interest the last 12 months.
Ok an extra payment each january sound better?
What if you just doubled the payment? Seems odd to do biweekly payments when you could just add more to the one payment you already make each month.
@@alleriodrone You can do both. The bi-weekly payment schedule is supposed to be an insidious "set it and forget it" way to pay down your principle faster. It's purely psychological. It's not supposed to be some kind of miracle hack for paying off your mortgage; you still have to pay back every cent that you borrowed.
What baloney. Any extra you can manage is a great idea. Don't feel badly about paying extra whenever it is possible - and Pat yourself on the back for doing so!
@@roseother8306100% this! Anyone doing anything above and beyond regardless of the amount and time should be proud of themselves!
My mortgage is 780 a month and currently I am sending 2700 dllrs a month and on track to pay it off in 3 more years.
Wow! How long have you been paying it?
paid cash 11 years ago. do it if you can.
better than the market and we slept like babies.
'' i stand here before you, owing to no man...''
Mortgage hack: mortgage interest is all front loaded, so if you are ever going to make extra payments, it helps a lot more if you pay them earlier in the life of the loan vs. near the end.
Eh, yes and no. It’s just the way an amortization schedule works when you have a fixed rate and fixed payment term. But, the interest you’ll pay beyond ANY given point is truly reflective of the rate you have applied to the remaining outstanding principal balance. So, pay an extra $200 on your first payment of 360 mortgage payments… and you save 359 months of INTEREST charges on that $200. That’s why you chop off so many years by accelerating principal pay down. In short, the longer you owe someone else money the more you’ll end up paying them. Plain and simple. And at around TWENTY percent, this is why so many people get trapped in credit card quicksand
No, you pay the required amount monthly. Then you make an additional payment to the principal. Why would you ever pay that interest first?
This. This. This.
It helps more due to the effect of compound interest of the interest you're not paying on the loan amount that you've paid off. Not because of the front loading.
I’m on track to having my 30yr mortgage paid off at the 15yr mark. Using large extra payments each month.
Why don't you invest those extra payments? Watch what compound intrest does with it.
Yeah, sorry, I agree with you guys on a lot, but I'm not aggressively paying off a 3% mortgage to miss out on twice (at least) that in stock gains.
they refuse to change their perspective at all. They have great advice to get rid of debt but have horrible money managing/investing principle
It only makes psychological/peace of mind sense for certain low interest debts. There's no way in hell I'm paying off my $80/m 0% student loan early, but I'm investing 20% and paying ~400/m extra on my mortgage for the sense of security of owning outright
5% is a typical "pay extra instead of investing" tipping point and he's assuming 8, so it's not crazy to choose to pay extra in this scenario
@@TH0KHhow did u get 0%
The math doesn't add up. 3% over 30 years adds up to 100s of thousands of dollars. I doubt your investments are surpassing the amount of interest you are paying on your house.
Risk. Where’s the calculation on that. If you lose your job, economy tanks, theirs is the best strategy for real long term wealth.
Yeah. Honestly this is good advice. I would add.. that there's some additional nuances to this. The earlier you are in you loan, the better results you get. If your mid way into your loan. This really doesn't cut that much time off. But.. just use a debt payoff calculator and if the numbers work out to your satisfaction. It's a great method.
Also a nuance... technically in paying off loans. Paying over time generally performs better than saving a bunch and making lump sum payments. Again. Some nuances to this. Depends on how long. What your doing with the saved money. And obviously if the lump sum pays off the loan today. Thats better than paying that amount over time. Etc. What I'm specifically talking about are short term lump sum payments. Like... say you want to put 20k towards the principal this year. And it doesn't pay off the house. You decide to pay once in July. And the rest in December. In the long haul, if you do something like this frequently. You would have a slightly faster payoff and pay less interest if you had just increased your payment by $1667 per month. Because in loan repayment much of the savings in interest happens in earlier payments. So delaying additional payments means you get hit with the interest you would have missed with regular payments. But.. yeah. Sometimes the fastest way isn't the best way for you.
One thing to remember on this point is some companies hold the funds until the completed payment is received if the loan is set up on monthly payments. Weird I know... most mortgages have to be set up with biweekly payments when the loan is created, in addition some do not let you make the biweekly. You can get this by just dropping an extra payment on each year. Loving the videos.
Correct.
Instead of doing 1/2 every two weeks, I just pay a full payment every 28 days, which is still 1 extra payment a year. It literally feels no different at all from paying it once a month.
We had a 25 year mortgage. Weekly payments with options to pay extra any time we wanted. We were able to make at least one extra payment every month. We paid it off in 12 years.
A big flaw in your analysis is investing the $1775/month. If the payment is PITI, you still have to pay property taxes and insurance on your paid for home, so you really only can save the principal + interest portion of your payment (approx. $1000-$1100/month depending upon your taxes). The context of the video is great, but I felt you missed it there.
That was a pilot emoji, not a flight attendant...
Thanks for pointing that out 👩✈️
...ok?
Fun fact: cauliflower,broccoli, cabbage kale and Brussels sprouts all come from the same species of plant
It all depends on your interest rate. Interest rates being what they are now (~7%) it makes more sense to pay off early. With interest rates lower than 3% like in the past, you are losing real gains in the market by paying the mortgage early. One gets much further ahead mathematically by taking the extra you'd pay to principal and investing that. Do the math...
One choice carries risk, the other does not. You can make hella extra payments at the start of your loan and then decide to invest those extra funds later and have the best of both.
@@TaylorOwen Over the course of 30 years there's very little risk in the stock market historically.
Housing also does absolutely carry risk.
@@NiceGuyDan08 That’s exactly my point. I’d rather know my housing is secure by paying off my 30 year mortgage in the first 10 years, and spend the next 20 years investing my typical principle + interest payments. Am I missing out on 4% of interest growth over ten years? Maybe, idk I’m new to investing… but I’ve done dumber things in life.
@@TaylorOwenTaylor Owen for the Win! 💯
Cooked and mashed cauliflower makes a pretty good substitute for mashed potatoes. Just saying...
I’ve got a cheap mortgage (2.7%) so it’s hard to convince myself that I should pay it off with inflation running so high (over 3%) but based on this channel I’m now paying 2x my monthly payment so that my 30 year gets cut down to a 15 year. I could pay it off today but then I’d drain my savings, which is earning 5% at the bank, and paying it in 2024 dollars when in the future, dollars will be worth less and I can pay it off with cheaper future dollars.
If you are paying twice the monthly payment you will be done a lot sooner then half the time. Take the time to do the math.
Pay it off. The peace of mind is priceless. To each his own. Cheers!
Agreed. I have a 15-year mortgage with Chase @ 2.49%, but I also have a large CD at Chase earning 5%. They are essentially paying me MORE to borrow my money than I am paying to borrow their money.
@@vintagecrazyjay4970never drain all of your savings to pay something off. Especially if it’s not hard to make the payment. Stack some more cash before paying off. Never know what might happen.
Ok but hear me out. Mathematically it makes much more sense to just keep a healthy financial cushion (3-6 months emergency savings) and put the rest into S&P 500. 3% is basically the inflation rate, you’ll be much more ahead if you don’t put it all in mortgage and invest the difference instead
I just make big chunk payments as I can. This month my car insurance is due which I pay in full, so there really wont be any extra this month. We have 138k left on out mortgage, 6 years into our 30 year mortgage. I enjoy seeing the balance dropping quickly
I do bi-weekly + add an extra payment each month that is equal to the amount of 1 bi-weekly payment, If I keep paying this much I'll have my mortgage paid off in 12years instead of 30! Plus I'll save myself 200k in interest!
In 2024,don't set new year financial goals without consulting a financial adviser.there expertise ensure a solid plan for success.Building wealth involves developing good habits like regular putting money away in intervals for solid investments.
Thanks for the advice! I'm new to financial planning and wasn't sure where to start.Any tips on finding a reliable financial adviser or resource to guide beginners?
How can I participate in this?I sincerely aspire to establish a secure financial future and am eager to participate.who is the driving force behind your success?.
Marie Ann Treloar
She has been my counselor and coach.
Research her name on gogle and you will find the necessary information and also her web page to make a contact and schedule an appointment with her.
You don't need to be making an extra payment each year. You just need to be making all your payments the day you get paid.
Interest on your mortgage will typically be calculated daily, charged monthly. If you get paid fortnightly but pay your mortgage monthly, then for a chunk of every month you have money sitting in your primary bank account not earning interest, when you could put it in your mortgage and have it saving interest. You can put exactly the same number of dollars into your mortgage every year and still end up better off simply by paying the appropriate amount of money into your mortgage every time you get paid.
Of course, any extra money you pay into your mortgage above the required payments will also make a big difference. Twenty dollars a fortnight, fifty dollars a fortnight - it's amazing how it adds up over the lifetime of your loan.
I don’t disagree with this but I think people should in general be prioritizing maxing out Roth and 401ks first. It’s not that you can’t put more down than the principal it’s just you shouldn’t disrupt from an optimized retirement savings plan to pay off a 4% mortgage
Everyone with an under 4% mortgage trying to figure out how to extend their mortgage...
No they are figuring out how to pay it off quicker to not pay even 2% extra. No one smart is extending lol
@@dreams2383 I have a 3.3% mortgage and I'm riding it out for the full 30 years, while my portfolio has averaged 15% over that decade. Thank God I didn't rush to pay it off, I'd be worth a third of what I am now.
@@dreams2383 why would I? My portfolio has outperformed my 3.3% mortgage by a huge margin, over the last decade. I'd be so much further from retirement if I'd put all my money into my house...
@@dreams2383 no I'm not. I'm riding out my 30 year mortgage to the very end, while I put my money into something that appreciates more than a house.
@@dreams2383no, if your mortgage is has a low enough interest rate, you can invest that money for even better yields. For example, at less than 4% mortgage that money goes further in most high interest savings account, many have higher than 4% rate. If interest rates drop, then you can put more of that money into your home instead. Or at 2 or 3 percent you may be better off investing in the stock market (although it is a bit riskier)
We were afraid of a strike slashing our income so did low payments biweekly and doubled them. Then if disaster struck we could return to single payments. Every renewal date we dumped our income tax money on the mortgage ballance. Worked well for us.
A home is an investment similar to other investments. My mortgage is 2.75% fixed, and I have a $1600 payment every month. I could put another $400 into the mortgage every month, or I can put that money into my 401k. The $400 into the 401k is a better choice than $400 extra into the mortgage every month. The numbers work out better. Investing that $400 into even a basic index fund would work out better financially.
Of course it takes you actually investing that money. I think the Ramsey assumption is that for most people, it is mentally easier on them to pay down debt rather than look at a long term investment strategy.
They gotta tow that Ramsey line… 😅
You’re not accounting for risk. The Ramsey method is to put 15% of your gross (not including any match) into your retirement investments. Anything above 15% goes to your mortgage.
But even in your case, the mortgage pay down is a guaranteed 4% return. Investing your money in stock market is not a guaranteed return. It’s all about your risk tolerance
I started out (when I was younger and cash-poor) by sending in the next month's principal with each payment. At the beginning of a home loan, most of your payment is interest, so even a small amount of extra principal at the beginning of the loan's duration makes a bigger impact than you might expect.
You do have to remember to check the box to direct it to principal, though.
So I'm in a weird situation. I got out of grad school with a ton of student debt, and went with a modified gazelle mode to save it all up in a high yield savings account during the pause. Then I saved up enough to get into a fairly cheap house hack golden opportunity that I just couldn't pass up, so now I'm in more debt, but still have much of what I saved up held back in the HYSA. The student debt and mortgage are similarly sized, but I could literally pay one or the other off in about a year or maybe a little over a year while keeping a solid emergency fund. Which one should I prioritize? I kind of feel like outright owning a roof over my head that cash flows toward me in my late 20's would be pretty great, and then I can relax a bit but just stay intentional on the student debt and pay that off over like 6 years. Thoughts? I know it's not precisely following the baby steps.
I’m glad you mentioned the bit about just figuring for the monthly extra and paying it still monthly accomplishing the same thing. I was wondering the point of paying bi weekly instead of doing that.
Why would anyone pay off a 3% mortgage if they can get put the money to work at 12%pa in his pal DR's "growth stock mutual funds" ??
Heeey we love cats George! Be nice to the strays! They can’t help it! 🐈
It’s mediocre advice. A 30 year mortgage gets you in a better home when raising a family, plus allows longer time to invest in retirement accounts. Obviously get rid of the mortgage before retiring.
His argument ignores the impact of inflation on mortgage payments
@Georgekamel8-telegraam01 Thanks enjoy the content and you. I’m semi retired EDM, baby step 7. Did it mostly my way which is similar to Dave’s way.
I don't think all places let you make partial payments.
Just make one additional principal payment every year and call it a day. Works out to be about the same with bi weekly payments.. For 30 years it be reduced to about 23 years..
Property taxes and or state and city income taxes. For us, they eclipse the mortgage, and they never go away.
We paid our regular mortgage payment monthly, and then paid the next two principal payments monthly (effectively paying three principal payments monthly, along with one interest payment).
And how long did you do that for?
@@chief5981 it was towards the end (about $80k remaining). Did it for three years or so. We found RS late in our mortgage payoff game. If we'd done it earlier, obviously we'd have paid it off sooner.
George, the other benefit that you SADLY did NOT mention of bi-weekly payments is that the interest that you are paying when you make your second payment of the month is off a lower principle and there YOU PAY LESS IN INTEREST EACH MONTH. I have my mortgage set on autopay to pay weekly, so 4 payments each month so payments 2 through 4 are always off a lower principle so less interest paid over all. I say this is pure genius, and yes I did come up with this idea on my own. BAM!!!! When can we get coffee, that is organic and Fair Trade, and ride in your hip Tesla?
note: to do this successfully, first get ahead of your mortgage by a month or 2, then set your mortgage on weekly autopay.
i have a mortgage with a 2.625% interest rate and my bank offered a 4.5% high yield savings account, so the money i was going ot put towards my mortgage i put in the savings account where i cover the cost of the mortgage interest and get a little bit more back. and i also feel a little bit more comfortable having it more readily available becasue if i put the money into the house, then in order to extract that money to use, i would have to sell my house or take out a heloc or something, so overall i feel more comfortable having my money earn more interest than im paying, and be more accessible. any thoughts?
A lot of people are doing that right now. The challenge will be when the interest rates drop and your HYSA only makes 3%, at that point the taxes you pay on the interest will probably bring the effective earnings to about the same or lower, so you may throw a big chunk of money at it to start saving more in interest.
@@LukeofAllTrades. when the HYSA interest rate drops he should put his cash in an ETF or mutual fund.
@@V8Brah That's certainly a popular approach, just have to watch for taxes and such. I plan to just pay off the mortgage and then invest the payment plus the extra I had been putting towards it. Simpler for me.
The premise makes sense, but if you invested the money you would have put toward paying the mortgage, doesn't it typically yield a better return? If you're interest is 7%, and your average return is around 10%, doesn't that gain you 3%?
I bought a duplex with the intention of living in half. The other half pays the entire mortgage. The plan is to move to a single family home and the income from the half I currently live in (and will move out of) will pay for more than half of the new mortgage.
Hey now. Don't be hating on cauliflower pizza crust. It's actually really good.
This works if your bank allows partial payments. Mine left it in a “suspense account until the end of the month and it got the other half.
It's the 13 payments (26 biweekly), not the bank holding until it receives the 2nd 1/2. Most do this. Eventually throughout the year you get to the month with 3 paydays. Call and make that payment with an agent and have it applied to principal only. Thats how I do it. Also you can ask your mortgage company about the biweekly payment program. Most charge a fee to set it up though. I chose to manage it myself as described above.
I'd rather put extra in my retirement
Take the monthly payment, divide by 25, and pay that every day
Just curious why divide by 25?
What to do if your banks only allows you to pay only 20%extra?And you like to pay more
I have a mortgage (
Yeah Jeremy! Nice teamwork y’all!
Not a regular commenter, but I had to show some appreciation of the absolutely elite perspective on cauliflower. It is seriously overrated, and I cannot agree with you more George!
I just invest the extra rather then pay down the mortgage and once I can pay it off in one shot I may do that
I’m curious which is better bimonthly payments VS dividing the payments by 12 and pay that additional each month?
According to Dave ramsey u can get an average of 10% to 12% in the stock market. Why pay off a 3% mortgage when you can add all that to the stock market and make more money. Hmmm🤔🤔
He's an idiot. He's telling people to give up a risk free rate of return of 5% to pay off a 3% mortgage and calling it a hack.
Why would anybody get a $300,000 mortgage with an interest rate of 8%? That’s crazy high! Rent until rates come down. My mortgage rate is 2.6%.
Because sometimes your the hammer and sometimes your the nail. Just happens.
Because "The price is the price." Take whatever the rate is. When rates go down, refinance at the new lower rate.
Historically rates have been significantly higher than 2.6 percent. You might wait until you drop dead to get a rate like that again…
Great advice, George. Just an FYI - I believe your emoji, Whitney, is a Pilot, not a Flight Attendant. Note the Pilot hat
It is because of how often the interest is calculated
What if you want to sell your house in the next few years?
average mortgage is closer to 3k than 2k.
I can barely hang on with mine with these rates.
Make sure you don’t have a pre payment penalty on your account.
Why don't you run the numbers for someone who invests the difference of a fifteen year mortgage while keeping a 30 year? 🤔
Hiring an mma coach works be ideal lol
“Assuming a 10 per cent annual rate of return”. Will not happen. Long term returns are more like 8%.
I prefer a 15 year mortgage. It really reduced the interest paid over the life of the loan
That's the typical Ramsey advice, you can't afford a house unless you can afford it at 25% of your income or less on a 15y mortgage
First step find a house that’s under $300k :(
Don't forget about your property tax and insurance payment being part of that average mortgage payment, I assume!
Well, that is in escrow, but after you pay off, that should transfer to just you so you need to save that portion of the mortgage payment to prevent a tax bill surprise in Dec.
@@Matthew-wz8ng for sure - just pointing it out and he framed it as getting the full payment back into your budget
Great info. George!
I like this, but it isn't a "hack". It is simply paying more monthly. And make sure there is no early payoff penalties.
I am not sure about the states but Canada has accelerated payment programs
I mean you would probably have more like 1300 to 1200 dollars freed up from your mortgage if 1775 was you payment per month. You would still need to set aside money for property taxes.
Paid off 20 year mortgage within 3 years… tripled my monthly payment, wherein the 2 extra payments are paid directly to principal… Best decision ever… Now, I’m working on for my downpayment for my 3rd property. 🎉🎉🎉🎉 Slowly but surely.. ❤
This was a good one! Thank you for sharing 🤑
Yikes. Average mortgage payments are 2600 per month here for a 3 bedroom house….
Uncut gems reference epic
Georgian here…. Do not take your kid to Six Flags over Georgia… it’s gotten ghetto and dangerous.
The whole USA is ghetto and dangerous.
Why do these models always way “assuming a 10% rate of return”? I have never gotten 10% on anything. If I find a 5% CD, I get excited… 😕
Exactly my issue ! Nothing nearly that high is available to me 😅
They aren't talking about savings accts. They're talking about index funds on the stock market. S & P 500 averages 10%historically. Mine is 30%this past year alone.
My Avicii mix is on 10 and I’m rolling balls to the wall with extra payment glow sticks
But what if you invested now and earned 10% per year (on average) instead of paying off debt that someone is only charging you 3-4% for? Wouldnt that 6-7% arbitrage be better?
There's a limit to how much interest you can save by paying your mortgage off early. But There's no limit to how much upside there is by investing your money in low cost index funds.
The therape plug blew my mind
"thats been in heat since Tuesday and won't stop screaming" 😆😆😆😆
How do you make sure it’s applied to the principal balance?
Pay online and it should have instructions that are pretty clear…it’ll usually say pay extra payments or only toward principal
I think Whitney is a pilot, not a flight attendant.
How can I possibly save "hundreds of thousands" on my mortgage, when I don't even owe hundreds of thousands? My house isn't even worth "hundreds of thousands." That would only be possible on a mansion costing millions, and the people I know that buy mansions can buy them outright without a mortgage.
How much money do you make on your RUclips channel?
Albino Broccoli hahahahaha good one.
That’s my foods food should have been Ron Swanson in parks and rec 😂
Same strategy for car payment?
😂😂Albino broccoli!!😂😂
Bro clearly hasn’t had oven roasted cauliflower
This isn't really a hack it's just paying off a mortgage quicker using normal ways to do so. The real issue with paying off a mortgage early is that a mortgage is basically the lowest interest loan most people will ever be able to get in their lives. In this video he talks about investing money saved from interest by paying off early and assumes a 10% return. He also shows someone with an 8% mortgage. If you invest all the money used to pay off your mortgage early and make 10% vice saving 8% you're pocketing 2% (though you have to consider taxation and there is no guaranteed return from an investment.) I'm Canadian we get rates guaranteed for shorter periods of time which make them change while you own your home but also generally better than an American would get so even with the recent surge in interest rates someone with good credit can get a 5 year fixed rate under 5%. Anyway all this to say if you have enough financial security to weather temporary market conditions and know what you're doing with your investments, paying off your mortgage early or buying a house cash is likely a really really bad financial decision that costs you money.
More cr+p from the Ramsey group. Paying off a mortgage early with extra payments only helps build wealth if the mortgage rate is very high. Even when the rate is high, it is very likely rates with drop and permit refinancing at a much lower rate. Putting those additional payments in mutual funds with compound and result in often hundreds of thousands of dollars of additional wealth. Ramsey is fond of saying you can expect 12% a year returns. That is also cr+p, but over the long run of a mortgage 7-8% in a balanced, conservative portfolio is more than likely. I also wish the Ramsey group would stop telling people how great it feels not to have a mortgage. I can tell you for sure that being a couple hundred thousand ahead in only about 10 years feels really great. Financial decisions should be based on sound logic, not emotions.
Link to mortgage calculator?
I love cats! Seriously though, how does the extra payments not get applied to the interest???
Just make one extra payment a year.