The Power Of Additional Mortgage Payments
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- čas přidán 27. 04. 2021
- The power of additional mortgage payments. A few examples to show just how beneficial it can be for you in the long-term. Anytime you can make an extra payment toward the principal, you are putting money in a good place.
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Your point(s) are valid, but remembering... The dollars you save are "future" dollars, so they will be worth less bling-bling. This stated, I refi'd in 2021 from being 5 yrs into a 15-yr mortgage at 3.125%. Picked up a 10-year at 1.875% (and that's without discount points). The payment is not cheap, but yeah. Talk about am'ing rapidly. This noted, re: extra $ here in 2024 ? Straight to my Schwab MMA. Seww..... At least for right now, earning 5.1%, or about 3.4% after-tax. Extra $ is going there......
Outstanding! Both entertaining and a very useful subject. I also love the preliminary discussion about when this might not make sense for people. You're the man!
Jeff you are the best! Thank you for the feedback, it means a lot!
We paid off a 25 year mortgage in 10 years by paying extra into it and reducing the capital, saved a fortune then put what we would have been the mortgage payments into pensions with tax relief, made a fortune…sitting pretty at 62.
I'm one of those people. I love saving money. I'm about to buy at 7.6% interest, and plan to refinance when rates go back down. I'm thinking NOT to make extra payments now, but wait until I refinance. Is this right? I bow to your expertise. PS: I used to live in Bridgewater and then JP. Never owned in Mass though.
Lol I appreciate it! It's really such a personal decision. I know for me, I've been in financial positions where, even if I'd like to make additional payments, they'd just cut into my theoretical emergency savings. In fact I've sort of gone the opposite approach at times, making extra payments for the next few months ahead, rather than a payment toward the principal. I've found I get some peace of mind knowing my mortgage is paid 120 days ahead. (I think part of the reason is I work on commission in a very odd & low inventory real estate market, so I never know what's around the bend.)
If you have a true surplus and it wouldn't cause you the slightest bit of stress, I'd say the interest rate has nothing to do with it. I'd say make those payments whenever you're in position to, and especially if it helps you toward the goal of getting rid of PMI, you might feel a little extra motivation. Hope that helps, just an opinion! Thanks for watching!
@@powerrealtyadvisorsI haven’t thought about making mortgage payments in advance, but I love the idea!
I’m 3 years in on a 2.25% 15 year loan. I make an extra payment when possible to get ahead of payments. It’s comforting seeing my next payment isn’t due for 3 months. This is better than paying down principal and payment still due next month.
I couldn't agree more. No matter the strategy for paying it down, I'm all in favor of throwing more money at your primary residence. The feeling of financial security is a good one.
That’s VERY STUPID!!! You can MAKE 6% at a BANK, with ZERO RISK!!!!
@@powerrealtyadvisorsYOU…are a DOPE!!!! BANKS are paying 6%, with ZERO RISK!!!! It’s NUTS to pay extra and “MAKE” only 2.25%.
@@traybern no such thing as zero risk. I sleep better knowing I’m 3 months ahead on payments. I care less about the extra 20 bucks in interest. But, I understand your absolute finance prospective that my approach is stupid to you. To each his own.
@@traybern You are the type of STUPID that will be paying a mortgage well into your retirement age because you 'invested' all your money and the market tanked.
I pay extra principal to my mortgage and will shave 17 years off of a 30 year mortgage, and will be done in 2 years.....then, after saving $70k in interest, I can stack cash and invest PROPERLY with no mortgage to worry about.....and what bank is paying 6%.....NONE OF THEM!
Be sure your extra payments are to the principal only. The mortgage companies will try to minimize this option on their apps or when you call to set up extra payments, so be careful.
You are right! These payments can be incorrectly assessed.
That is very nice. What if you put 100$ every month in stocks or funds? you would have similar financial results with more liquidity, right?
There is a certain philosophy to this, a type of emergency planning consideration, as opposed to focusing on the pure returns. I am still a believer in this idea.
You’d have better results, actually
I paid off my mortgage 13 years early. Its not rocket science . Any moron can take any extra cash you have and pay towards the principal. I did not need a You tube video to tell me how.
Hell yea bro thanx for the clix
Lol!!! Just go watch another video instead. People need reminders of the right steps to take.
@@Cevicheconcoca thank u also for clix
Congratulations to you for paying your mortgage off so quickly, but you would be surprised how many people don't know how to do this the proper way which is why they watch these videos. This leads me to wonder why you're watching it. If I paid my mortgage off, I wouldn't be watching this kind of video in the first place, unless trolling was my profession.
I close over 400 loans on refi's and purchases each year and in my experience, about 60% or more of my clients never knew this, but I don't leave the closing assuming they're morons. Instead, I offer the information to be helpful and educate them because no school or even parent will explain this. These videos wouldn't be so popular if everyone knew this information already.
I enjoy helping people and take no pleasure in making them feel bad. If everyone made the decision to help others, the world would be a much better place. The only problem I have with all of these videos is there are better ways than this to pay off a mortgage even faster and save even more interest, yet nobody is informing people or maybe they don't even know the other ways, so I guess I'll need to make a video myself so I can continue to help more people which really makes my heart feel good.
Thank you for your input@@cvillelister