How to Pay off a 30 Year Home Mortgage in 5-7 Years

How do you pay off your mortgage faster in 5-7 years even its for example a 30-year mortgage?

Link: https://www.nerdwallet.com/blog/mortgages/early-mortgage-payoff-calculator/

1. Here is exactly what they do and how it works
– When you buy a house you a mortgage, as you keep paying mortgage you build equity on your home
– As the value of your home also goes up you also build equity in a way
– But the problem, the money you pay for you home, you cant use it whenever you want to ( and honestly you shouldn’t )

But what they do is this:
– Once they have enough equity in the house by paying and also an appreciation
– They take out a HELOC: that is a Home equity line of Credit
– So imagine if you bought a house for 200k and you paid off so far 40k and it went up in value by around 20k ( that’s 60k in equity, and your HELOC lets you borrow up to 80% of that)
– So you basically get a loan of $48k ( aka a Heloc) – and you can pay it off in 10 years

Btw:
– Right now the rates for a Hiloc are around 5.17% but can vary depending on the economy, and go up to 9-10% you never know
– And right now a lot of banks offer a HELOC without an application fee, a closing fee or any fees honestly
– But why would you do this and what do you do with the money

Here is how it works:
– You would grab that 48k and put it towards your mortgage to lower the amount of money you and also the amount of interest you pay because the balance is a lot higher
– But you are probably thinking I still owe 48k on the HELOC at a higher rate, well yes but here what you would do to help you with that
– The idea, every time you get paid to put all the money into the Heloc, you use a credit to pay for you all your bills ( they give you 23-30 days to pay without any interest)

Here is what happens:
– Because your full salary is the HELOC, and you leave it there for 30 days the interest is going to based on that balance
– Before the credit can charge you interest you pay it in full with money you take out the HELOC
– That way you avoid credit card interest and also have a lower interest due on the Heloc because you left he money their

But there is one thing you have to know:
– This only works if you spend less than what you get paid ( make 4000 and spend 3000 including the mortgage)
– That way when you pay off the Credit card and the mortgage, you still have $1k being paid to the Heloc to pay it off fast

Tip: if you have a fancy credit card, you also get points, if you put all your expenses on a credit card It will begin to add up fairly quickly

2. SO overall:
– The idea behind this strategy is a smart way to pay of your debt faster
– By making extra payments and leverage the interest rate and also making money from points
– But as you can tell it can be very complicated to actually understand

Simple Step by Step :
– Get a HELOC
– Put the money into your mortgage
– Put your salary in the heloc and use a credit card to pay your expenses ( wait 30 days before paying the CC to save on interest )
– And rinse and repeat

But the problem is:
– Interest rates on HELOCs are not fixed they can vary and go up as high as 9-10% even more
– And top of that if you make a mistake and lose your job or something, then they have lean again your house ( they can foreclose on your )
– If you have a bad credit score, you most likely won’t qualify for a good lender and will get hit fees for opening, closing and even maintaining the account open
– And for some people, they use the money to buy something and just end up having a double loan

3. Would I Do it
– the answer is now unless you can handle this form of budgeting
– for me a rather make extra payments.

* PRO TIP*
INFORMATION IS EVERYTHING

💲1 on 1 Talk + My Budget + Stock Investments💲
https://www.patreon.com/tommybryson

👕Merch👕
https://teespring.com/stores/tommybryson

✅2 FREE AUDIOBOOKS✅
https://amzn.to/2Enayo8¬¬¬

🎁ACORN FREE $5🎁
Link: https://acorns.com/invite/38EYSU

⚡FREE KINDLE UNLIMITED⚡ (traditional reading)
Link: https://amzn.to/2VGbxt9

👨🏽‍💻DISCORD PRIVATE GROUP👨🏽‍💻
https://discord.gg/EcZEHpA

My Camera Gear: https://amazon.com/shop/tommybryson

✔ Help Us Reach 250,000 Subscribers: https://goo.gl/0wvm6w

😎All My Social Media😎
Link: https://linktr.ee/tommybryson

*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

source