I see these methods like this one, to save a lot of money on mortgages. Anyone do this?
Do you ever do "velocity Banking"?
- Thread starter daves66nova
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Trickster games on all ends.
She's not "wrong" - BUT she is really telling us a 30 year mortgage is abusive. I'm not sure doing that $10K HELOC is that smart from a total debt POV
She's not "wrong" - BUT she is really telling us a 30 year mortgage is abusive. I'm not sure doing that $10K HELOC is that smart from a total debt POV
Monetary rules to try to live by;
"Interest is better recceived than paid"
"Interest is better recceived than paid"
I didn't watch the vid, house has been paid off for 20+ years.
Housing prices are wild though. We are building our retirement house as we save up the money to build/install milestone by milestone. It is about 75% done so I have a decent idea about what it will cost per sq. ft. once completed, then my Cali BIL tells me about house prices out there and I know there is a scam somewhere at easily 6-8 times the cost per sq. ft. as what it would cost to build build on a lot.
Housing prices are wild though. We are building our retirement house as we save up the money to build/install milestone by milestone. It is about 75% done so I have a decent idea about what it will cost per sq. ft. once completed, then my Cali BIL tells me about house prices out there and I know there is a scam somewhere at easily 6-8 times the cost per sq. ft. as what it would cost to build build on a lot.
It's nice to see posts like this. Let's forget the HELOC the public is CLUELESS as to what a 30 year mortgage cost them. This does help educate.
I dont agree taking more credit to pay other credit. I find it more simple to calculate extra monthly payments. It's clean and simple.
Thing is the public at large is not disciplined. Debt is a drug.
I STRONGLY encourage anyone with a mortgage to use this calculator to show you how much money you save by adding extra principle payments to your mortgage. Having a 30 year mortgage is insane. Pay as much as you can for the first 15 years.
Once you enter your stats, another page will come up to enter how much extra you would like to pay, once you enter the amount, you can then enter, one time payment, monthly payment, annual payment. It will show you the savings.
She is correct, you buy a $500,000 house but pay back 1.2 million if you take out a 30 year mortgage.
When will we ever educate our kids? You have to do it, it will never be done in schools, the banking industry way to powerful, however social media might help even the score.
www.ramseysolutions.com
I dont agree taking more credit to pay other credit. I find it more simple to calculate extra monthly payments. It's clean and simple.
Thing is the public at large is not disciplined. Debt is a drug.
I STRONGLY encourage anyone with a mortgage to use this calculator to show you how much money you save by adding extra principle payments to your mortgage. Having a 30 year mortgage is insane. Pay as much as you can for the first 15 years.
Once you enter your stats, another page will come up to enter how much extra you would like to pay, once you enter the amount, you can then enter, one time payment, monthly payment, annual payment. It will show you the savings.
She is correct, you buy a $500,000 house but pay back 1.2 million if you take out a 30 year mortgage.
When will we ever educate our kids? You have to do it, it will never be done in schools, the banking industry way to powerful, however social media might help even the score.
Mortgage Calculator
Use our free mortgage calculator to easily estimate your monthly payment. See which type of mortgage is right for you and how much house you can afford.
www.ramseysolutions.com
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For my first (and only, still living in it) house, I searched until I found a mortgage lender who offered what they called a half-pay mortgage. The jist of it is that the borrower sends in a check (transfer whatever) every two weeks (for half the monthly mortgage amount, not optional, contractually required) instead of once every month. So instead of sending in a check for example $2000 every month you send in a check for $1000 every two weeks.
No difference you say, well by doing that payment option a 30 year mortgage is paid off in 23 years. We took out a 15 year half-pay mortgage and it was paid off in slightly more than 11 years.
Having my home paid off free and clear in my early 40’s has been liberating for both my mind and soul.
www.bankrate.com
No difference you say, well by doing that payment option a 30 year mortgage is paid off in 23 years. We took out a 15 year half-pay mortgage and it was paid off in slightly more than 11 years.
Having my home paid off free and clear in my early 40’s has been liberating for both my mind and soul.
Biweekly Mortgage Payments: What They Are and How They Work | Bankrate
Paying your mortgage biweekly cuts down on interest and helps build equity. Here’s what you need to know about biweekly mortgage payments.
I paid off a 30 year mortgage in less than 9 years and have been debt free for the last 30 years. I don't buy cars often(about every 10 years) but when I do, I pay cash. I save up money for purchases and don't make impulse buys that create debt. Takes discipline but it works. Taught my son this behavior and he lives that way as well.
I've had a couple 30 year mortgages, paid them both off early. This house refi for 15 yr, when rates were low. Plus I add an extra hundred a month, so that makes it about a 13 1/2 year mortgage.
New roof (thank you Homeowners ins.) just set me back 18 grand, or I would have paid this one off early too.
New roof (thank you Homeowners ins.) just set me back 18 grand, or I would have paid this one off early too.
Awesome and what great parenting. I have done the same, my daughter picked up on it real well when after college I printed up and taught her about amortization sheets on her college loans. She knocked them out in five years (with an incentive from us too)
She lives that life though of not wanting loans and saving money (she is doing well)
My son, ummm, maybe not as much but the idea and principle have stuck with him and he is better than I was at his age. So I call that a success. I do wish someone taught me at an early age, though I did learn in business, self taught and with a partner.
My parents, now gone, did well for themselves and even though I knew how they did it, they never really sat us down to show us.
Someone recently said "drive around any middle class neighborhood, look at the cars in the driveways, the majority of the driveways with older cars instead of new will retire millionaires."
Not absolute but to some extent it will be true.
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For my first (and only, still living in it) house, I searched until I found a mortgage lender who offered what they called a half-pay mortgage. The jist of it is that the borrower sends in a check (transfer whatever) every two weeks (for half the monthly mortgage amount, not optional, contractually required) instead of once every month. So instead of sending in a check for example $2000 every month you send in a check for $1000 every two weeks.
No difference you say, well by doing that payment option a 30 year mortgage is paid off in 23 years. We took out a 15 year half-pay mortgage and it was paid off in slightly more than 11 years.
Having my home paid off free and clear in my early 40’s has been liberating for both my mind and soul.
Biweekly Mortgage Payments: What They Are and How They Work | Bankrate
Paying your mortgage biweekly cuts down on interest and helps build equity. Here’s what you need to know about biweekly mortgage payments.
While definitely a good thing to do, there's a detail missing.
There are two months a year where you will be making 3 payments. So you're effectively sending $2167 a month instead of the $2000/month which is basically doing the same thing.
What you found definitely keeps people "honest" rather than just telling themselves they are going to do it and never actually doing it.
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Yes. No free lunches when it comes to love or banking. You are effectively sending in 13 monthly payments spread out over 12 months. It’s the financial discipline you are committed to that makes it work. No excuses allowed. If financially committing to this is a reach for the borrower then it is not for them.
Paying down your mortgage early always works and saves LOTS of money. However, her $69,230 saved in two years is nonsense. There is no way a $10,000 HELOC does that. The proper comparison between costs is how much you might pay in rent and how much your mortgage, tax and insurance is. There is nothing wrong with a 30 year mortgage, what is wrong is not paying it off as quickly as possible. There is nothing more comforting than a paid for home. That is security.
She is right in saying refinancing is NOT the right thing to do, unless it is for a much better interest rate. Then keep in mind how much you pay in fees to refinance.
But, you say, I get to write off the interest on my tax return. Not really. You already get a large standard deduction and only get to write off the excess of deductions over the standard deduction. It NEVER makes sense to buy tax deductions.
I am severely allergic to debt. I pay it off as quickly as possible. I use credit cards and pay them in full every month.
She is right in saying refinancing is NOT the right thing to do, unless it is for a much better interest rate. Then keep in mind how much you pay in fees to refinance.
But, you say, I get to write off the interest on my tax return. Not really. You already get a large standard deduction and only get to write off the excess of deductions over the standard deduction. It NEVER makes sense to buy tax deductions.
I am severely allergic to debt. I pay it off as quickly as possible. I use credit cards and pay them in full every month.
Honestly the only thing about these "30 year fixed is bad" or "HELOC is scary" thing, is really about people not having the discipline to pay off their debt when they can, to reduce the compounding interest.
Paying every month vs every 2 week is really a rounding error. You are taking investment money out of compounding to put in your mortgage to reduce the compounding there. If you are not investing the money or keeping it as rainy day fund just pay mortgage off, sooner than the term. Longer term loan will have higher interest, but lower risk will make you less likely to be in trouble if interest rate goes up or if you are laid off.
Most people's problem is they spend their money instead of paying off loans sooner. If they can get that mentality fixed, what types of loans they get is just not that big of a deal, because they will find a way to pay off sooner.
Paying every month vs every 2 week is really a rounding error. You are taking investment money out of compounding to put in your mortgage to reduce the compounding there. If you are not investing the money or keeping it as rainy day fund just pay mortgage off, sooner than the term. Longer term loan will have higher interest, but lower risk will make you less likely to be in trouble if interest rate goes up or if you are laid off.
Most people's problem is they spend their money instead of paying off loans sooner. If they can get that mentality fixed, what types of loans they get is just not that big of a deal, because they will find a way to pay off sooner.
Is velocity banking when your buddy keeps the engine running?
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I agree, nonsense. As we say in our house "it doesn't work that way" (from an old PC game)
I agree that having a paid for home and not paying mortgage interest can be comfortable, fully comforting. There are some cases when and if the cash that could pay the mortgage makes more than not only the interest being paid, but the principal as well. This can almost universally only happen with a very low interest mortgage, when and during a raising rate situation. Say when the mortgage is in the 2-3% range and the money is making 5+%. Of course not many people have this cash, discipline or will.
I’m always surprised at the impulsive buying habits of people in the 40’s and 50’s.
I can understand people in their 20’s and poor spending habits.
Amusing, in a somewhat unfunny way. On Monday my bank got robbed by an idiot whose partner waited outside in the pickup. They got a couple of miles before being stopped behind the Napa where the robber got shot to pieces by police when he pulled a gun. One officer was slightly wounded. The robber (not going to say suspect) is in a Las Vegas trauma center. His partner went into the Napa and called a cab. The police easily tracked him down and picked him up that evening. All for $1,715.
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