Yes it is front-loaded, but it is not deliberate or some conspiracy that you allude to. they could spread out the interest, but they don't. and who the f#@k has 200k for a downpayment on a home??
Perfectly explained. I think what most people get wrong about it is that they disregard the monthly payments. They believe that the monthly payment should be fluid. If it was fluid then they'd pay more when they owed more and less as they got closer to the end of their loan. But since its a static monthly payment, they have trouble conceptualizing that they'd have to pay more interest in the beginning of the loan vs the end.
Banks absolutely front load the interest. If we talk about the payment itself, in the beginning, only about 15% is paid to the principal, the rest is interest. If there wasn’t this problem, people wouldn’t try to get the lowest interest rate. If you got 0% interest you’d pay 100% principal ever single payment
But it’s just math. Did you watch the video? They are not front loading interest. It’s not like they sit in a room and discuss how much interest they can get away with charging in the beginning of the loan.
No they don’t. If you actually watch the video you see the monthly interest amount is calculated on the current balance. Do this if you have a calculator. Take a 100,000 loan at 3% with a required monthly payment of $1000. The interest for 1 month would be $250. The next month the remaining balance would be $99250. The interest would be $248. The interest is calculated on the existing principal. Christy and others will try to convince people that a 10% LOC is better than just paying extra to the principal balance. She will never do an honest side by side comparison. 175k followers as of today who can’t or won’t do the math for themselves. She is making a LOT of money from people who want to believe that money is created out of thin air. Myself, this gentleman, or several others can prove her wrong time after time. The lowest interest rate always wins when comparing the same amount applied to the principal whether thru velocity banking or just paying cash flow to the loan.
Great video and very clearly explained. I know of some people who believe in “paying down’ their mortgage by putting payments towards the interest and not the principle, thinking this is helping reduce what they owe. I’m sure the banks absolutely love it.
Great explanations and strange how the VB advocates like Christy Vann will not use when comparing debt payoff methods. Would you please make a video explaining the VB myth of "increased cash flow"'next? Her followers need to watch your videos to see how it truly is "just math". Thank you.
Thank you. I didn’t know front loading was a thing. A CZcamsr was saying it was, banks are cheating us, etc. I’m glad it’s not a real thing. That’s just math. No tricks.
I appreciate learning this! I always thought that my mortgage interest was front loaded lol. Please keep these videos coming for people like me who can't math the math ! 😅
So many ppl don't understand the concept, it's just simple math. For every $400 ish you thru at the balance, you would have saved a month's worth of interest payment. It gets worse for longer amortized mortgages.
Do you believe banks front load the interest on mortgages?
@@CurieBohrdid you watch the video?
@@CurieBohr nice! Thanks!
Absolutely!
Yes it is front-loaded, but it is not deliberate or some conspiracy that you allude to. they could spread out the interest, but they don't. and who the f#@k has 200k for a downpayment on a home??
Perfectly explained. I think what most people get wrong about it is that they disregard the monthly payments. They believe that the monthly payment should be fluid. If it was fluid then they'd pay more when they owed more and less as they got closer to the end of their loan. But since its a static monthly payment, they have trouble conceptualizing that they'd have to pay more interest in the beginning of the loan vs the end.
Thanks for your comment!!
Banks absolutely front load the interest. If we talk about the payment itself, in the beginning, only about 15% is paid to the principal, the rest is interest. If there wasn’t this problem, people wouldn’t try to get the lowest interest rate. If you got 0% interest you’d pay 100% principal ever single payment
But it’s just math. Did you watch the video? They are not front loading interest. It’s not like they sit in a room and discuss how much interest they can get away with charging in the beginning of the loan.
No they don’t. If you actually watch the video you see the monthly interest amount is calculated on the current balance. Do this if you have a calculator. Take a 100,000 loan at 3% with a required monthly payment of $1000. The interest for 1 month would be $250. The next month the remaining balance would be $99250. The interest would be $248. The interest is calculated on the existing principal. Christy and others will try to convince people that a 10% LOC is better than just paying extra to the principal balance. She will never do an honest side by side comparison. 175k followers as of today who can’t or won’t do the math for themselves. She is making a LOT of money from people who want to believe that money is created out of thin air. Myself, this gentleman, or several others can prove her wrong time after time. The lowest interest rate always wins when comparing the same amount applied to the principal whether thru velocity banking or just paying cash flow to the loan.
Great video and very clearly explained. I know of some people who believe in “paying down’ their mortgage by putting payments towards the interest and not the principle, thinking this is helping reduce what they owe. I’m sure the banks absolutely love it.
Thanks Michelle!!
Great explanations and strange how the VB advocates like Christy Vann will not use when comparing debt payoff methods. Would you please make a video explaining the VB myth of "increased cash flow"'next? Her followers need to watch your videos to see how it truly is "just math". Thank you.
Thanks! It seems like no matter what the math says people will believe what they want to believe.
Thank you. I didn’t know front loading was a thing. A CZcamsr was saying it was, banks are cheating us, etc. I’m glad it’s not a real thing. That’s just math. No tricks.
Yup! Thanks for your comment!
I appreciate learning this! I always thought that my mortgage interest was front loaded lol. Please keep these videos coming for people like me who can't math the math ! 😅
Appreciate your comment! Thanks.
Well explained. If I was Elementary profesor, I will teach this to the kids from 3 grade up
Thank you!! Yes, they need to learn this at a young age.
So many ppl don't understand the concept, it's just simple math. For every $400 ish you thru at the balance, you would have saved a month's worth of interest payment. It gets worse for longer amortized mortgages.
Thanks!
Good video
Appreciate it!