How to pay off your mortgage in 7-10 Years & Retire Early
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- Опубліковано 12 чер 2023
- Want to pay off your mortgage quickly, today's video is for you. Azul shares one strategy that is relatively low risk and another popular strategy that he feels is very risky. Watch today's video and find out which is which.
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This information is only provided as an informational resource and should not be viewed as investment advice or recommendations. To get professional financial advice from a fee-only financial advisor near you, please visit www.napfa.org.
The decisions on how to invest, when to retire, and other financial planning topics are some of the most important financial decisions you will make in your life. I urge you to seek professional financial advice as you make this decision. Ideally, from a financial adviser, AND a CPA AND an attorney. Having the perspective of all three professions will help you make the right decision for you and your family.
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Spoiler Alert: There are no "get rich" programs. Rather, just basic blocking & tackling and putting in time and care. Do your homework, choose wisely and (IMHO) work with experienced professionals who are fiduciary to you 100% of the time.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
Interesting Roger. I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
Insightful... I curiously looked up her name on the internet and I found her site and i must say she seems proficient, wrote her an email outlining my objectives. Thanks for sharing.
Thanks Scam bot thread !
We paid off two mortgages early and rarely made a six figure income. No regrets and we plan to retire in 2-3 years!
Wowza! That’s amazing. Congrats on both fronts!
How much was each mortgage?
A technique - buy a home you can afford, not based on the MAX loan you are approved for, but max you want to be strapped with every month for the next X years (X = loan timeframe).
Azul, that first 1/3 of the mortgage curve, THIS is when you'd want to pile on the principle - only payments. Greatly reduces total interest paid on the loan.
Azul, I'm not sure where you think these hypothetical people are that have an extra $1500 a month?? Life is crazy expensive man!!
They exist.
We owe 100k with 2.85%. Wouldn't it be better to put Extra income in a high interest savings account? I plan to Retire. In 4 years at 62
I enjoyed many of your tapes. Do you have a tape about the advantages of moving from states like California (have state income tax) to Nevada (no state income tax) during retirement.
I have a 2.5% fixed mortgage rate when I was able to refi during the pandemic. And my car loan is 2.3%. This is the cheapest capital I'll probably ever see in my lifetime, so I'm holding onto these loans as long as possible and just investing the extra money in my retirement and savings even while riding out these wacky markets. My student loans on the other hand... I've taken advantage of the 0% interest and haven't paid those in a while, but I'll probably take my profits and apply them to pay that down quicker. The government was far less generous than the banks were with their interest rates.
I know so many people who refinanced in January-February-March in 2021. Got a great deal on the interest rate.
I just bought a house at 7.375 interest rate. My plan is to put every extra penny I get to that mortgage. Otherwise my 1300 P&I is only putting 125 to the "P" part of that equation. 5k extra will cut THREE years off that mortgage! So I am doubling the payments as long as I am able. No debts to speak of and emergency fund is there. I think in the first year I can cut at least 10 years off that mortgage. I paid my last one off totally in 8 years, but I didn't start agressive payments until about year 5. I am going to attempt to beat that, even though the rate is higher, I am starting at day one. I would rather have a paid off house than a retirement fund that may or may not be there due to the fluctuations in the market. At 60 I am more concerned about being totally debt free than markets activities.
Always great content. Thank you Azul
We had a 30 year fixed mortgage at 10% in 1987, refinanced it for about 7% in a few years later and made extra payments. I think we should have refinanced for 15 years instead. We then sold it in 2000 and made a small profit of about $120k. We bought a smaller house with a $100,000 mortgage for 15 years. We did pay it off on time took about 16 years. We did refinance it alter 2 years at 5%.
Thanks
The extra payment should be towards your the Principal right?
So from your example, the payment should be the monthly payment of $3200 then an extra $500 paid towards the Principal or whatever extra should be paid towards the Principal?
What we have been doing is bi-weekly payments plus an additional $400/mo. We're about 32 months into a 30 yr fixed at 2.6% and the payment is already more towards principal than interest... slightly, but ahead nonetheless.
Should mention that you need to make sure that the extra payments go towards principle. Not just being applied to the next scheduled payment...
Yes. Although that actually helps too.
Our mortgage rate is 4.25%. I am not in any hurry to pay it off. Our remaining principal is under 80K, I am investing the max in my 401k as it is growing more than the 4.25%. Is that logical?
What do you think of the Smith manoeuvre regarding the mortgage?
We've never regretted paying our house off at 37!
I am throwing what I can to the mortgage paydown before retirement, on what I earn. If I retire with mortgage debt, I retire with mortgage debt. I am at the point in my mortgage that with each payment, if I didn't add to the principle, 67% goes to principle, and 33% goes to interest, now. If I can get that ratio to let's say 75/25, then in retirement I will be paying down the mortgage faster on the normal payment. This is the way I look at it. I'm tired of postponing my life, man.
I realize it’s risky but all of Australia has a system very similar to the Heloc way. I tried to explain a fixed rate mortgage to an Australian they said that certainly benefits the bank. Bottom line don’t don’t take a mortgage into retirement.
Option number 3 is invest the extra $1,000 per month. Probably the best choice if you have a rate locked in at under 4%.
People borrowing today at 6-6 1/2% will probably get a change to refinance at under 4% at some point. That’s the time to switch into a 15 year loan.
I wouldn’t recommend pre paying a mortgage until you are very liquid. At least 1-2 times your annual take home income saved, invested but easily liquidated. Once you pay into the loan, you can’t get that money back.
I agree with this
Another great vidio, from a frugal Scotsman 😂
I think you forgot to factor in the tax savings by being able to deduct the mortgage interest on your taxes?
Can you pay off your mortgage faster if you make 2 equals payments the same amount as one payment
Yes. 🎉
From my very first payment I added a side car of 100.00/month toward principal. Knocking down that principal quickly
I own two homes and paid them each off in less than 7 years. They are worth 2 million each at this point. My secret was calling the mortgage company every time I sent an additional payment, over and above the normal payment, and insisted that they apply the additional payment to the balance and not prepaying interest. Believe it or not, if you don't do this, they can apply the overpayment to prepaid interest!!
Thanks for pointing that out BD Flavors. And congrats on paying off both of those houses so quickly. 😎 Azul
Couldn’t you just pay by check and put “principal payment” in the Note section
@@GusMahn probably not, they may stick to their policy that you agreed to when you signed the mortgage loan. Sometimes if you try this they will try to sign you to another loan with payments every 2 weeks. With fees for setting it up and likely a higher interest rate since they won't have a hand in your wallet for so long.
At 50 bought a home, saving 10 yrs from $0 for down payment. 50% take home goes to housing, plus 20% to extra principle, plus saving for retirement. All on a very modest single income in $$$ area. Sacrifice? Yes, way too much! But goal to pay off loans in 10 years so I can retire and spend time with aging family, if I'm lucky. Interest portion of payment has gone down quite a bit with extra payments over 5 years.
Some mortgage companies charge you to overpay your mortgage. Is it better to take out a longer term mortgage and pay extra or just take out a 10-15 year mortgage initially for an inexpensive place?
Thank you
The best way to pay off your mortgage is split your current mortgage into bi weekly payments using the same mortgage payment. Example... $2000 mortgage payment a month, but you split that into $1000 every two weeks. You will save an average of you will save 5 to 7 years off your mortgage. Best strategy out there. Just ask your lender.
My mortgage company holds that payment until the rest is Pais then they apply it to the mortgage
I am on track to pay mine off in 4 more years for a total of 7 years since the home was purchased. I am sacrificing wants for later in life.
Work and hard labor builds a strong body and mind. It builds character, defines a purpose and contributes to the common good of man. Keeps people from being loafers, sluggards, and day dreamers of no rapport with those in his circle. The last thing we should want to do is retire from those great aims. Let's instead take up the command to work ALL the days of our lives. By the sweat of our brows as is stated. The woman if reading of course should be about caring for children, making the home an organized, clean and wonderful place. Her work is a helpmate for the husband (married with children). The aim of the home should be cleanliness, organized and well maintained. These are better aims for a society tipped on its head by not following the directive. Would be great to see the call to be to that, and not to "retiring".
i paid off my mortgage as soon as possible - even though the rate was quite low (2.75% after refinancing and and converting 30 yr to 15 yr). Very happy to be done with it - just in time to redirect monies to kid's university.....
cat eyes!
Sacrifice is never easy or it is no true sacrifice.
I bought a house and being made right now and hope to pay it off in 10 years and then keep staying there. But I dont plan to retire since retirement is boring and I am a software engineer so can work since no physical labor at all and work from home
I like my plan better.
If you don't mind what's your plan??
@@Cenlalowell careful the plan could be to take your money!