How To Pay Off Your Mortgage Faster
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- Опубліковано 12 вер 2024
- How does money really work? Is it good to pay your mortgages as soon as possible? Let's straighten out some common misconceptions in today's episode. Learn what they don't teach you in school, and I'm pretty sure a lot of financial advisers get this wrong too! Stay tuned!
To your abundance!
Doug Andrew
Key Moments In This Episode
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00:28 What I do for people
02:11 A short story
03:49 LASER Fund
05:20 You're not accomplishing anything because...
07:01 Would you do this?
09:48 The Parable of the Talents
What To Watch Next
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How Can I Become My Own Banker?
• How Can I Become My Ow...
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If you'd like to see the math for your situation, you can schedule a free consultation with a recommended specialist: 3dimensionalwealth.com/getstarted
I can show you the math fjr all of it ! It’s a fraud it’s a scam !
This is not education. It’s a commercial.
@@jeremywilde1140 it’s a scam ! These bastards are liars and frauds and we are taking them out
Now that itemization of tax is not getting benefits vs standard tax deduct on.
All mortgage interest
Property tax
Expenses to supprtal rent .gets added to closer to standRd deduction
i paid off my 30 years mortgage in 6 years by attacking the principle hard. after that i’ve been investing 60% of my net salary into my roth and stock accounts. i like to do thing the simple way!
Yeah he'd have you buy an IUL
Question, you have 60% in the stock market. Which is awesome! But how old are you and what happens to your account when (not if) the stock market corrects or crashes again? Is there any way for me to protect my nest egg from the downside?
I’m on year 3 and month 6 I got 26k to go before my house paid bout to do it in less than 5 years like you. Can’t wait!!
@@anthonyyaboytone5Really, how on earth do you do it??? How much was your mortgage to begin with?
@@micaiahmoore4191By buying assets - the market is volatile and unpredictable (past results are not guaranteed). If you’re young enough to be able to absorb losses and crashes and you have the stomach for it, go forth. Otherwise, buy assets instead.
Worked for me, paid 2 houses off in 8 years instead of 15 by extra principal payments. Everyone never considers risk. Foreclosure happen all the time for people who don’t have their mortgage paid off and especially in bad times.
So you payed extra principal payments how often and did it come down faster at the beginning of acquiring your home?
Fantastic! Thanks for sharing!
80% or more of people do not get a tax deduction from a mortgage unless they itemize which most people do do not do because the standard deduction is higher and you lose that when you itemize. So unless you have enough deductions it is not worth it. The standard deduction is somewhere around $26k
Bingo.
Thankyou that was my first thought.
The most they get is deduction for the interest
I never itemize and only take the standard deduction, so you have peaked my interest. I assume you disagree with the gentleman who made the video?
@@kevn33 correct
So the suggestion is to not put more towards paying off your principal balance but instead invest that money towards a possible 3% higher earning fund which the current administration plans to impose a tax on unrealized money.. sounds like a lose lose situation. Think I'll continue chipping away at my principal balance while investing since I can write off most any investment losses.
Definitely, get that mortgage down as soon as possible… this video is Mis-leading
If you can do both, great… but make sure you max fund all your ira, 401k, Roth IRA first .. especially your Roth IRA, eventually the Roth IRA will easily make your mortgage, utilities, house maintenance, property taxes, insurance payments.. it’s the property taxes, insurance, replacement costs that are the problem long term and go up every year.. mortgage fixed stays the same
Most people don’t understand the concept therefore they say it doesn’t work. All I would say is do some real research before you knock the strategy. It is not misleading. Numbers don’t lie.
@@coelhocointech9841have you seen the hit 401ks are taking in this current market?
@@jperkins1269 , numbers are based on constants and in an economic environment where so much is uncertain it's usually best to follow your gut instinct.
If you pay extra principal payments from the beginning of the loan you get the biggest savings.
If you start investing that money right at the beginning of the loan it has more time to compound.
Correct because early on the total loan amount is higher and thus the amount you pay in interest is highest. Getting the loan amount down is the best way to lessen money lost on interest
This is true! The credit union helped me set it up. I will pay off in less than half the time.😁
Extra principal payments helped me pay off my 30-year loan in 17 years. Work bonuses, overtime, side hustles etc went to principal and not fancy cars or toys. Now I can buy the toys I really want..nah. I like my freedom from debt.
Way to go! All I’m saying is that you could gave paid off your mortgage in 15 years-two years sooner-using my method.
I bought my House in Nov 2009. I paid it off in March 2021. I doubled the principle each month. As I do not itemize on my tax return, the house did me no good for taxes. Now my rental properties give me great tax write offs.
It's 'Principal' not principle so what do you know if you can't even spell?
I know the Liberal run school system failed me as it has failed so many others.@@norfolknchance657
Im not buying it. Pay off your mortgage as quickly as you can!!!
I took out a 30 year mortgage in 2020. I have a 2.375% rate. I will never prepay this. I am at about 1.5% after my mortgage interest deduction. That money I would spend paying it down is better invested almost anywhere. Even if I put it in a savings or money market, I do better. The advice in this video is solid. By the way, I own a mortgage company so I have run this math many times.
Even after all that rambling you’re still completely wrong.
@@bobcloughjr😂
😂
Read The Great Taking
@@bobcloughjr😀😀
Paying off your mortgage early and reinvesting that mortgage $ (including the little extra) is the only way to go. He's got you going so many different directions you don't know which way is up. He is using bankers' math (sounds really good), but designed to make the bank rich, not the customer.
I would never leverage my family home for a possible 6% growth (9%- 3% mortgage interest). Taking the cash flow from NOT having a mortgage payment and aggressively investing is much more safer!
There are several possibilities of risk you are not covering. I urge ppl to do some research on the differences.
Just think, if your house was paid off, would you go take a loan on it for the possibility of earning 6-9% minus the interest you are paying them for the loan??!
correct, RISK is never mentioned by the youtube star. We own our home and are not going to mortgage it and be further exposed to the markets, which have done JACK for three years.
You can never have said it better.
I have a 2.6% mortgage. I was sending double payments each month, then it dawned on me: I'm currently earning 12% on my IRA, I diverted extra money from my mortgage to the IRA. Didn't seem like rocket science.
@@HighCountryRambler What will you do if your IRA earnings drop to 2.5%? That's the risk they're talking about.
@@therealctoo4183 Nothing... They have dropped to 2.5% and even negative, but always come back in huge ways in the rebound. Looking at the DOW over 30 yrs it's averaging close to 20% return. Since I no longer itemize it makes no sense to pay off my loan. I have the payments on auto pilot so don't even see them being made.
But I do check my IRA regularly and balance asserts accordingly.
what if the amount of the yearly interest is not higher than the standard tax deduction? so you can't claim it on your taxes.
350K mortgage at 2.5% interest (2.5*2)*10, you'll pay ~50% interest in 30 years, basically 175K just in interest.
If you lower the principal you're also lowering the amount of interest you pay.
Acctuly I did extra every month toward my principle and paid my 30 years loan to 21 years.glad did it and feels good when you are not worries about that damn payment any more....
How much extra?
@@YaBoyDC when I did my 1st home (many many yrs ago) it was as little as $20 /mo to knock off 10 yrs of payments. Smaller loan then than now but still if you pay as little as $50 - 100 /mo you should be able to save about 10 yrs of payments to the bank. It all depends on the interest rate and amount of loan to begin with.
I've watched a lot of these guys but none of them ever mention that your actual interest rate on your mortgage isn't the 3% you think you're paying (look at the last page of your loan docs, that 3% loan is actually costing you 49% because of the way the mortgage company's front load the amortization). That $100,000 house will cost you $300,000 if you pay it off on schedule over 30 years, that's one house for you and 2 houses for the bank, not to mention that for every dollar you pay the bank they can loan out $9, look up fractional banking in America. It's never as simple as they make it seem. Watch those Velocity Banking videos, I don't do it, but the gist of it is to take max HELOC money out of your house and use that flat but variable interest money to pay off your amortized mortgage (in 5-7 years). I'm boring. I'm just putting extra toward principle as best I can. Pull up those loan docs to see what your loan is actually charging for the use of their money.
Yeah the total cost of ownership. But to each their own. As long as people are living under their means, investing their money wisely and staying consistent everyone wins no matter what path they choose. Some ways may be more efficient than other ways depending on circumstances and someone’s comfort level so personal finance is personal and whatever works best for folks is what works best for them. The banks will make out either way as well. Either give them their money back faster or pay them more in the long term. They never lose either as long as they stay disciplined in how much and who they lend money to. Basically if everyone stays disciplined the system should work just fine. But everyone is always trying to sell something or one up on the game.
ummm clearly you missed the part where that 3% is per year x 30 years.... vs (in his example) 6-10% per year x 30 years. If that same $100k house(your example) COSTS you 200% in interest... imagine that $100k EARNING you 400% or $400k.
You guys pay off house ASAP. This guy is insane. Look at the unstable markets now and people getting laid off some living under the bridge.
Guyhas more than one screw lose
Good advice but rather pay it off faster. 30 yrs is a long time never know what could happen. Rather pay off my house in 10-13 and have my kids own it if anything ever happens
Unfortunately, TurboTax says mortgage interest deduction won't count due to the standard deduction being more advantageous (and the mortgage interest deduction being under the shared cap of $10k as state taxes). So I don't think this is relevant anymore, since Doug keeps on saying mortgage interest is deductible, and that is the crux of his argument, on why keeping it around.
Just paid mine off this week and I sent extra principal payments.
Paying extra principal payments worked for me. I paid my mortgage off in 2 years and 11 months. I maintained my liquid cash as well.
Most people don’t pay enough yearly interest on their mortgage to itemize and see any tax savings over the standard deduction.
Agreed....
One LARGE variable missing from your equation - risk.
Im not buying it! Most people can't itemize and write off their interest. Just PAY EXTRA PRINCIPAL EACH MONTH.
The standard deduction is so high now that we get zero deductions for the interest we pay. How does that impact your numbers?
But doesn't that mean you obligate yourself to put in a minimum amount each month? Whereas with making extra principal payments, a person who is not so well off can make extra payments only when it isn't painful
You are still borrowing money to pay off other borrowed money (Mortgage). Yr premise is that you think you are not going into anymore debt....but you are, by vast amounts. So you may indeed pay off your mortgage but you will still be in debt! yr just moving the debt around, you are not going to be debt free anytime sooner. You pay off your mortgage sooner by working more jobs, earning more $$$ and putting it into the principal!!
So we have to buy the book In order learn what kind of account he is talking about
He is talking IUL . Google IUL
Finally someone is giving sane advice. Earning more than you are paying makes sense.
Glad I could help! Make sure to check out the rest of the channel for more great information!
You are talking about a specific mortgage market where mortgage payments influence your tax rate. Not every where it works like that. You should give some number based examples rather than generic talk. If you use any amortisation calculator, you'll realise a $100 voluntary payment can make a heck of a difference if you've small mortgage.
Also, way easier to pay off in the beginning. Took out a mortgage in 2017. The length is supposed to be 2032, however, I'm looking at 7 years from now which is 2030. Hard to do extra when the principal payment is high. After all, you a paying a percent of what is owed. If you knock off $10,000.00 which I have, 2 years are gone. Not sure why they don't consider this as part of the thing. Also, interest rates have sucked for 20 years - only recently going up. Now money in the bank is better than a low interest rate. Now I''m getting more than the 3. whatever and that is not going to last long so I've taken out 5 year CDSs. Also, this is a great time to buy stocks for dividends as many good stocks are down.
You inspired me to do the math in a little spreadsheet. Even without any compound interest earning, I would build up the ability to pay off my house within a couple months of when it would happen by keeping my mortgage as-is. Laser fund is just double bonus liquidity.
Why does it take every UA-camr forever to get to their point?
He did not only babble saying nothing, but he is pushing some garbage "investment".
because youtube pays by the eyeball time spent on the video
Funny, I just put $100K on our mortgage and Walsh! The payments went down by $600/month
Payments don’t go down unless you only had 100K left! If only 100K then you should have invested…a small mortgage is not dangerous
If you put $100k towards your mortgage and pay off 20% of the loan, you get rid of your PMI. Your mortgage payment definitely will drop.
smoking some good green i see. Yeah payments will be the same, doesnt change .
I paid my house off long ago but the insurance and taxes never ends.
Thanks for this it really changed my whole prospective instead of making extra mortgage payments I’m going to put that extra money towards my retirement account where my company matches. So my 500 will actually be 1000 and another 500 in a Roth
No, pay off your mortgage than you can invest double or triple
@@mullboll33 no that’s not realist and it will take me still over 10 years
So when the economy tanks you still have your mortgage to pay.
@@tinamoore5026 and house leveraged against the debt lmao people believe ANYTHING random UA-camrs say
But you pay more taxes on 401 when you withdraw because you put more in.
All I needed to hear was insurance fund/IUL and like Barbara on Shark Tank I’m out 👻
BS scam to sell more IUL & collect huge premiums.
Exactly 😝… that’s why I’m not paying off my mortgage, currently with 2.75% 😊…. Even CD’s is paying me 5.5% 😀
What was the name of that calculator again? Willy Wonkas magical lator or calc?
Always pay your debt as quickly as you can
I have been looking for someone to come on my feed and say this!!! Thank You Sir!! Life Insurance
Glad I could help! Check out the rest of our channel for more great information.
You talk too much. Get to the point.
Yes
😂yes
This video is 3 yo. This only works if mtg interest rates are stupidly low like when he did this video. Now rates are 8% so the math is not even close to the same. Your better off paying down principle, you will payoff early and you won't be buying the bank 2 houses in interest.
Excellent information.
Glad it was helpful! Make sure to check out the rest of the channel for more great information.
These days Im pleased enough if I can make the motgage payment on the due date.
TU Doug for this very informative video, i stumbled upon this maybe for a reason.
When does the video start
Love hear how to invest what type, I get what say not to send extra payments to bank.
I stumbled across this video and do glad I did. I've never seen anybody so clearly and precisely show why it's better to not pay off mortgage by making extra payments.
He didn't actually explain it though. It was "you get this investment here, you put it in this pocket" and "then you have your mortgage over here in this pocket" and then "and I can pay the mortgage off at any time, but why would I? This pocket has waaaay more money".
It reminds me of when the car dealer does the four-square thing with the trade-in value of your car, the payment you'll have, and other mumbo jumbo to avoid give you exact numbers.
I can do both most people use the standard deduction and therefore the tax deduction is not apart of the calculation so I assume you must be richer than Dave Ramsey because your smarter than everybody
Hello Doug,
Can you explain this with examples and numbers please.
Thank you!
Won't be able to that would unmask the truth. Cause investment are always volitional while your principal payment is in stone that won't flatuate.
The State And Local Tax (SALT) cap of $10,000 already screws me from exceeding the standard deduction.
Wth this makes no sense. I pay an extra 100 $ to my principal pmt because i dont want to give the mortgage company any more interest. Am i wrong.
The best decision is based on your current mortgage interest rate and the possible earnings from investments.
Absolutely. 8.5% mortgage interest rate, around 5% investment earnings… for me, it’s a no brainer!
In this economy, go against the ill advice of this video. Always, ALWAYS pay extra on principal, no matter if you invest in something else to pay the house off faster.
Brilliant, I was considering paying my small mortgage with part of my pension, but my pension is doing well. I would pay off my mortgage if my pension investment goes down in the UK.
oh i see. but the financial system is not setup for normal people to walk away with the assets
This makes sense. I need to get the discipline to do this
We would love to help! Learn how these strategies can transform your life by checking out the rest of the channel or browse website to learn more! 3dimensionalwealth.com/getstarted
hi doug,im from canada...who would you recommend i learn from ?
Tax deduction? Most people don’t quality for schedule A when they get their taxes prepared.
I provide massages to strange men in return for money. This is really helping pay my debts.
If I take a 15yr fixed mortgage out and make 2 payments a month 1 regular and 1 principal only payment would that work to?
Does this financial principal style apply? Should I order this book? Have the tax laws changed?
Our clients are finding success. You can order the book at www.laserfund.com and meet with one of our specialists for a free consultation here: 3dimensionalwealth.com/getstarted/
Hi Doug, is there an equivalent in your mind for the LASER Fund for Canadians? Thank you in advance.
Unfortunately, the laws are different in Canada, but the last time we checked there was a way to use insurance in a similar manner. Instead of being able to take loans from insurance companies against your policy for tax-free access, you must borrow from a bank and use the policy for collateral. Check with an insurance specialist and tax specialist in Canada for more details.
I started investing in stocks at 18, grew portfolio to $600k by 33. Recently, lost over 30% and want to mitigate risks. Also, plan to pay off my mortgage and want my portfolio to grow. What should I do for stable cashflow?
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.
I've stuck with the popularly ‘’Melissa Elise Robinson” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
He might have better luck selling ice to Eskimos!
😂
25%? What about the cap life insurance imposes on annual gains??
It depends on the company and product. Currently, most 1 year S&P500 point-to-point strategies have a cap around 10-11%. The 2 year S&P500 index accounts have a cap of around 24%, and a 5 year S&P500 index account has no cap! All these index accounts have a floor of 0%. There are also no cap strategies, a current 1 year S&P500 index with one company has no cap and a spread of 6.5%, and a 2 year strategy with no cap and a spread of 5.75% over that 2 year period. There are also VCIs (volatility control index) accounts that have no cap and high participation rates. These accounts typically have participation rates of 200% to 390%. Meaning you participate in that much of the index return with no cap.
One of my Financial Advisors told me, why pay more of the principal? You are not earning interest.
But to invest that $ that's earning compounded interest
How is extra money in equity dead money? Isn't it canceling interest the borrower would have had to pay? In effect it earns interest at the mortgage interest rate - or am I missing something?
Understand the difference between opportunity cost (what you could be earning in compound interest tax-free on that equity) which is usually double to triple the rate of the deductible “employment cost” you will incur when borrowing. You will either incur employment cost (the cost of borrowing money at a lower rate like banks do) and earning a higher rate -OR- you will incur opportunity cost. I choose to incur a lower employment cost in order to earn a higher return to avoid lost opportunity. For every $100,000 of real estate equity, if I borrow at 6.5% and only earn 8.5% I’ll accumulate an extra $1,300,000 over a 30-year period. Do the math.
@@missedfortuneI mean what, what you’re saying is correct, but how do you borrow at 6.5% and earn 8.5%?
My mortgage interest rate is currently 8.5%, with the likelihood of it rising even further in the near future, and the interest I can earn, even in my superannuation is, at best 6.5%. So the math here’s just not stacking up, and I quit my 401k (or New Zealand’s equivalent of it) voluntary contributions in favour of paying off my mortgage quicker, because of it!
Most banks wont let you do Interest only mortgages. Or at the most for 5 yrs and if its your own home then possibly 2 years at the max. This is the situation in NZ.
Sure, that's common. You sometimes have to be creative with who you work with to get them, and yes they are rarer than they used to be.
Doug in Canada we don’t get an income deduction on our mortgages does this advice still hold?
Most people don't itemize so that tax part is out the window.
Currently the new ROI in your Lazer fund probably isn't going to work
And mortgage rates are now over 7%
Redoing the math is in order with figures and links to do the fund?
if one's interest rate is less than prime/inflation - having a mortgage isn't a bad thing. for example - my interest is 3.5%. mortgages are STARTING 6%. BINGO! of course - you have to be sure you can pay the mortgage.
Makes good sense sir 🙏🏽
Glad to hear it!
Hello Mr. Andrew , I’m a life insurance agent , and I already bought your book , but I’m my agency they keep telling me that in IULs you are break even in like 10 years , what should I do ?
I am getting ready to announce and release my training for agents on how to do this the right way and get the right results! Stay tuned and join the training!
@@missedfortune I'm in
Thanks, I was curious about this question.
What I do is use my ZERO % Ccards and borrow the 5-10k for the 12-18 month zero % time. I’ve done it twice and it worked out perfect.
There are only so many credit cards with 0 interest and it’s only one time when you open card. How do you keep it going long term?
There’s a 3% service fee. At the beginning you failed to mention
Yes and 3% is cheaper than 6% plus hands down
90% of the mtg payments is all Interest
Service fees for transfers are now around 5% with some banks
Nope! You’ll save more in interest by getting your mortgage paid off sooner. The proof is in the pudding!
I’d like to see actual numbers on your math
I was starting to reach the same conclusions but you put together well. Thanks for sharing.
Glad it was helpful!
Great to see Shelley Levine still at it
Dude, get to the point instead of taking forever to sale your books, or put in timestamps.
Your math may work for those in higher tax bracket and at higher mortgage interest rate; however, my low, low mortgage interest rate and low tax bracket doesn’t work too well with your verbiage. Apparently, your verbal video fell into my feed randomly.
The fastest way to build wealth is to be debt free. You need to go back to school brother!
Real Estate mortgage interest is one only remaining tax right offs
Had to rewind a couple of times but I finally think I understand lol…thanks for the information!
You're welcome! Glad it helped!
I get what you are saying but I don't have 30 years to build that wealth.
Amen me either!!
Maybe, maybe not. Make sure you mortgage policy allows it. I paid 50 dollars extra monthly on the principal. It helps.
This seems more like an advertisement, so it's hard to believe anything you say. So I will be doing my own research over the next few months and come up with the best solution for my own situation.
Anyone who uses "quicker" and "faster" in the same sentence is usually full of baloney.
What's a mor-geej?
Can't deduct. Don't have that many deductions.
Not buying into your system.
This is just as bad as the woman that talks about never using cash, but instead everything on credit cards.
No thanx.
He isblowing smoke.His logic is not feasible for most people.
What type of account pays you tax free gains ?
IUL LASER Fund. ua-cam.com/video/ReXr-uMY3k0/v-deo.html
Never heard this method before! Going to setup my LASER fund now
This guy... such conceited salesman. I, I, I... Bored and annoyed in the first minute, endure for five more minutes to find if there was any thing worthily. There was nothing.
How do you put money in the laser fund
You need to have one custom structured for you. Start by talking to an IUL specialist. you can request an introduction here if needed: 3dimensionalwealth.com/getstarted/
Pay for the book😂😂😂
“Allow me the opportunity to buy your book”, 😳. Enjoyed the video even after hearing that
Amazing has always been a pro for real estate but today I under how to do it better.
The lender certainly benefits from this approach
Why payoff your mortgage if your tax equivalent interest is 1.0%
Wonderful