beenz
Rap Guerilla
why? I'm already doing it now. I'll simply be be purchasing more.
Paying off your mortgage early is the worst financial decision you can ever make
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why? I'm already doing it now. I'll simply be be purchasing more.
This still doesn’t compare to Turning 800k to 6 million over the life of the mortgage836K is payment over 30 years...you can slash 1/3 from it if you make extra mortgage payments so it doesn't take you 30 years.
Even the banks know this is a win for the consumer which is why some have started introducing "pre-payment penalties" . They want to discourage the practice.
Prepayment Penalty: What It Is And How To Avoid It
Prepayment penalty: What it is and how to avoid it
A prepayment penalty is a fee some lenders charge when you pay all or part of your loan off early. Find out what triggers the fee and how to avoid it.www.rocketmortgage.com
I’ve already explained why
Tres Leches
Empire Business
The higher the interest rate the more bs this is
I'm not sure you're making sense. Other than paying for the house in cash, the bank is eventually going to win when you take a mortgage. The goal is the reduce the amount of money the bank gets for the lifetime of the loan.
Are you suggesting people do not take a loan and buy the house in cash?
Isn’t the premise of this thread about paying off a mortgage early? I would assume to be in this position the person has a lump sum of cash
The smartest thing to do is to continue to pay your mortgage monthly and grow that lump sum of money
Paying your house off early isn’t dumb. It’s just not the smartest thing to do with your money
bigsausagepizzapapi
Rookie
It's not always the best financial decision but it's considered "forced" savings.
A lot of people will spend the money instead of invest it, that's the double edged sword of illiquidity.
A lot of people will spend the money instead of invest it, that's the double edged sword of illiquidity.
Cakebatter
All Star
That's some spooky math right there, buddy. The home price in the example you responded to was only $420k. Where is your $836k investment coming from? That $6.6 million figure is from investing $836k @ 7% and letting it ride for 30 years. No one is recommending dropping $836k down at the closing of a $420k home purchase. The traditional advice is to make one extra payment per year, which normally comes to a few hundred dollars a month. Its typically only recommended for the first 5 years, when your mortgage payment is nearly all interest.You don’t have to be good with investments to earn 7% annually. That’s what the sp500 has historically done
836k in 30 years is 6.6 million dollars
Y’all are in here saying you should forgo over 6 million dollars in returns to save 400k
I misread and thought the home was 836. Replace that with 420 and the point remains
Womb Raider
5* Gooneral
Seriously?Our rental property we used to live in is on a 5.5% from back in 09. It’s now generating a monthly income with tenants and we have $23k left to pay on it.
I’m paying off that mortgage hopefully this year, fk what he talking about
All my tenants money becomes my money and it earns just a little more than a 40hr a week min wage job
I don’t know…
This only works if money comes at once.
Over those 30 years the mortgage is relatively fixed price. Don't forget housing will increase at a good clip as well. So yes you might not own a home but cost of housing will increase as well.
I haven't done the math but I think a 2-5% difference compounded is about right comparing apples to apples. I get it if you already have your forever home, however I do understand housing can go down (2008).
Yes, rent nets $20,400 before property taxes and hoa fees. $8.56 per hour on a 40hr work week if we want to get technical, after hoa and taxes.
Womb Raider
5* Gooneral
is living off of properties not viable?
I think the part of the issue is your premise isn’t completely correct. Most people here are talking adding an additional amount (a couple hundred) to the monthly mortgage payment, not having a large lump some that you use to pay of the remainder of your mortgage.