What an extra payment can do... #shorts

How to save when it comes to Mortgages #shorts #didyouknow #mortgage

🖌 Links:

🖌 Free Stocks:

📲 FOLLOW ME & FRIENDS:

PS: I am not a Financial Advisor, any investment commentary are my opinions only. Some of the links in this description are affiliate links that I do receive a commission for & they help support the channel

[richardwebb]

This works with about 91% of all loans. Unless the policy loan policy changes, let’s say my friends wasn’t happy with her old bank when she did this 😅.

[diabolicallink]

“Want to pay off a loan faster? Just have more money!”
Genius. Why didn’t I think of that myself.

[uvscja]

No way you've just tried to explain that paying more towards a loan will reduce it quicker 😯😯😯😯😯

[ambercrawford]

“Just get more money” thanks for the tip

[momouwu]

I'm glad he didn't say that line "how did you know this?" "well, I follow Humphry Yang". It would been cringe

[unavailtroll]

Counter: if you put the same 100 extra towards the s&p500 every month starting in august 1992 instead, it would hold a value of 170k. 130k more than the amount saved by paying it towards the mortgage in this case.

[darkbeetlebot]

This advice summed up: "Just have more money! :shrug:"

[sadeknight]

Money saving tip: buy a house up front with cash! No interest at all!

[jonathanballoch]

This is the catch: most loans have an interest rate of <5%. the average rate of return on the stock market over long time horizons (like the length of a mortgage) is >5%. so if you have an extra $100 you might be better off putting it into an total-market ETF, even better if it is put away in tax avoidance like a Roth IRA. Everyone should remember that to maximize your returns, you need to compare ALL the options.

[lai]

This only works as long as there's no penalty on those accelerated prepayment.

[friedpancakes]

A coworker of mine got secondary cashier job and put every penny of it into paying off her house. It worked, she paid off her home 13 years early

[justifiably_stupid]

I do this with my car loans every time I get a tax return.

[kbee]

He paid 100 dollars extra each month for 26 years. That is around 31000. He only saved 9 grand of interest. Factor in the inflation and such and I'd say I'd just pay when I can.

[-w-]

damn 27 years went by and Humphrey stays young

[FinancialfitDiva]

Be sure to lookout for prepayment penalties. I don't think a lot of conventional mortgages have them now but if you have a prepayment penalty attached to your loan it can cost you. I would recommend increasing those $100 principal payments every time you get a raise

[Noltie]

I don’t know about the US, but it the Netherlands you can’t do that. The loan is set, so are the payments. When you pay off early, there’s a penalty.

[davidhoffman]

Another strategy is to request weekly or biweekly payments instead of monthly payments. Automatic deduction from paycheck or bank account. It reduces the overall cost of the loan

[papasquat]

The other guy invested the $100 in the s&p and is now a millionaire with a paid off house. But you saved $40k. Cool

[lordofhack]

This has the same energy as "just don't be poor"

[joeymachado]

no one discusses the opportunity cost of putting that yearly 1.2k in better investments instead of the mortgage and getting a higher return on that money