How to pay off a 30 year home mortgage in 5-7 years (2023)

How to pay off a 30 year home mortgage in 5 to 7 years. This is the most up to date version of our explanation on how you can pay off a 30-year mortgage in just 5 to 7 years on average.
In the video, I will demonstrate how a banking strategy can be used to pay off a 30 year home mortgage in just 5-7 years without sending double payments, changing your current level of income, without refinancing, without loan modification, and without hurting your credit.
Download Our FREE Strategy Calculator: chopmymortgage.com
Key Parts:
0:00 Introduction
0:40 Disclaimer
0:54 Why is Your Mortgage Dangerous?
6:11 Why you should never Refinance!?
8:13 Intro to HELOC
8:32 HELOC vs Mortgage
11:19 Intro to Average Daily Interest
15:00 Intro to 1st Lien HELOC Strategy
22:52 Recession Impact on HELOC?
23:51 Free HELOC Calculator Download
Disclaimer: I am not an attorney, accountant, or financial planner. This video is intended to be an educational video. This video should not be taken as financial, legal, and/or tax advice. Sam Kwak is a Certified Credit Counselor #11613. This is not a credit counseling session. I suggest that all viewers consult with professionals prior to implementing any or all parts of our strategy.
RECAP OF THE VIDEO:
I start this video with an explanation as to why a 30-year mortgage is like a trap for 21st-century homeowners. The reason being is that Americans (and Canadians) experience frequent life changes that cause them to move or they are eluded to refinancing because the refinance rates might be low. Unfortunately, such an event happens before 7-10 years into the mortgage. In the first 5-7 years, the vast majority of your mortgage payment goes straight to interest payment. A very small portion of your monthly payment actually goes to pay down the principal balance of the mortgage. Fortunately, there is a way to escape this. We're going to introduce a new tool to help us with this called a Home Equity Line of Credit (HELOC)
A HELOC is different than a traditional mortgage in several ways. The two main things to remember are (1) a HELOC is a revolving line of credit - which means you have the ability to pay back and re-use any available limit of the HELOC; and (2) a HELOC uses average daily interest calculation (simple interest) instead of an amortization interest calculation which is used by your 30-year mortgage. There's a common myth out there saying that HELOC interest rates are always variable and higher. This isn't true... There are HELOCs out there with fixed interests rate and some even have lower interest rates.
Now, in 2021 - the best version of this strategy (in my opinion) is to use a 1st lien HELOC to completely replace your mortgage. By doing this, we now only have one debt against your home. No more 30 year amortized mortgage! Just a 1st lien HELOC. With the 1st lien HELOC, you're now able to deposit all of your income (and event savings) into the HELOC balance to reduce the average daily balance - which ultimately means a lower interest amount you'll pay on a daily basis. Doing this will keep the interest bill low while still being able to draw the funds out for expenses, emergencies, or even a rare investment opportunity.
Now, you may have questions such as a.) couldn't the banks freeze my HELOC? b.) are the banks still lending HELOCs? c.) how do you qualify for a HELOC? d.) What if I don't have any equity? - I answer most of these questions on our other videos and free virtual classes that I offer. Be sure to download your free calculator to also attend our in-depth virtual class: chopmymortgage.com
This strategy has many names such as: velocity banking, debt acceleration, mortgage acceleration, the "pill method", or even the velocity method. Here at the Kwak Brothers, we call it: "Accelerated Banking Concept" or ABC for short.
😃 Thanks for Subscribing & Liking our Video!
#heloc #mortgage #refinance
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--DISCLAIMER-- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.

[@Riggsnic_co]

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

[@usieey]

If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.

[@maga_zineng7810]

Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.

[@kevinmarten]

I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?

[@usieey]

There are advisors in cities around you but I needed services of one who can guide me irrespective of location. Catherine Morrison Evans comes highly recommended especially in times like this. I am hedging and haven't lost much to the recession. I found her in 2020 when the market was at an all time low. Look her up and thank me later.

[@kevinmarten]

I am on her site doing my due diligence. She seems proficient. I wrote her an email and scheduled a phone call. Thanks for sharing

[@justinsanders195]

How to pay off your mortgage faster: trim unnecessary expenses. Increase principle payments. Simple

[@Rainbowsun1]

Thats what I am doing, after my divorce I refinance at a lower interest rate and did a 15 yr instead of 30yr.

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@Rainbowsun1check her out on Google or check her website

[@xterra4hire]

Sure we are going to talk about helix’s in this video but I’ll give it a chance

[@user-gr6fv3pp1q]

​@@Rainbowsun1you still paid mostly interest at first

[@cw5437]

I paid off my mortgage in 8 years. Was paid off the year before Covid. Best decision I ever made. I have no CC debt either. Everyone talks about inflation and high interest rates but i haven't noticed. I created my own personal economy so I don't need to worry about interest and inflation. 🙂🙂

[@Izzy267NZ]

Did you use this method?

[@cw5437]

@@Izzy267NZ I did huge prepayments (took on extra work for few years) and was lucky enough to lock into a really low interest rate at the time. The big monthly prepayments ($1500+ my regular payment) really made it go down fast. I was super focused on it though. Now I'm focused on retirement savings because I'm not quite where I want to be. I don't want to live on Ramen noodles when I retire, but I also don't want to travel the world or anything either. Lol

[@julget3648]

Why didn’t you put that money in stock market? You would have some profit. During the Covid the rates were super low, people were getting refinancing. It was basically free money with 2.2 - 2.5% interest rate.

[@cw5437]

@@julget3648 It is a far better rate of return to pay off a 25 year amortization with current interest rates rising fast. Plus, the value of my house has now risen to almost 3 times what I paid for it, and I now have no mortgage. Way more profitable than a 2% return on higher risk stocks. I also wanted to semi retire sooner by paying off my mortgage.

[@cw5437]

@@purplenaturellc733 this is incorrect due to the trading fees it would cost per investment transaction as I'm not from the US. I do have some investments in equity growth funds which are doing well. I believe in balance and security so I'm personally more comfortable with a paid off mortgage and investments on the side.

[@mathebulamkhize876]

Year-over-year inflation stood at 6.5% in December 2022-the lowest that figure has been in more than a year. Inflation was in line with what economists expected and gave many of them a reason to believe that the peak of inflation may be behind us. I have approximately $150k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?

[@russellbateman3293]

Despite the naysayers posting in here, we did this circa 2006 and, while we didn't pay in 5-7 years, we did kill it pretty much in 10 (instead of 30). It does work.

[@TheKwakBrothers]

BOOM!

[@klk538]

Bad ideas to pay off mortgage. How about never pay it off and use equity fir more properties instead and make more money live rent free

[@TheKwakBrothers]

@@klk538 interesting... That's exactly what we teach on our channel. So who are you arguing against here?

[@johnmoss7578]

I can see how this strategy would be incomplete without using your new found equity increase to investment opportunity and therefore pay down your increased debt! Crazy but i think it woukd work. @klk538

[@imdoc7872]

Great video. I’m making my last mortgage payment this month. It took me 7 years to pay off my house after paying off $200k in student loans. Discipline and living within your means was key.

[@yeseniareyes538]

Your an inspiration 🎉😊

[@ToOpen6seven]

How much was your mortgage and what is your salary? Those numbers matters as well.

[@imdoc7872]

@@ToOpen6seven I make $370k per year and my total mortgage was for $360k. But I pay $70k for my children’s schooling per year while saving $150k in their 529s.

[@aminbalank9962]

@@imdoc7872 what were you doing to be making 370k a year

[@imdoc7872]

@@aminbalank9962 I’m a doctor. That’s my salary.

[@ExxonMobilCompany]

I wasn't financial free until my 40's and I'm still in my 40's, bought my third house already, earn on a monthly through passive income, and got 4 out of 5 goals, just hope it encourages someone that it doesn't matter if you don't have any of them right now, you can start today regardless your age invest and change your future! Investing in the financial market is a grand choice I made.

[@obodoaghahenry9297]

I understand that tomorrow isn't promised to anyone, but investing today is hard for me now because I have no idea of how and where to invest in. I would be happy if you could advise me based on how you went about yours, as am ready to go the passive income path.

[@marcelrobert9569]

@@obodoaghahenry9297 Even with the right technique and assets some investors would still make more than others, as an investor, you should've known that by now, nothing beats experience and that's final, personally I had to reach out to a stock expert for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I'm buying again.

[@marcelrobert9569]

@@Manuelcliford Sure, My advisor I'm in touch with is "Julie Anne Hoover" , she works with Smith incorporated and interviewed on CNBC Television. You can use something else, for me her strategy works hence my result. he provides entry and exit point for the securities I focus on.

[@charlotteflair1043]

@@marcelrobert9569 I just looked up this person out of curiosity on the Google internet; surprisingly, she seems proficient. I thought this was just some overrated BS, appreciate this.

[@russellash8755]

No one cares

[@torqued6881]

This is the type of stuff that should be taught to us in high school.

[@TheKwakBrothers]

EXACTLY!

[@brettmortenson5181]

Fr Fr! I would have loved to learn in high school that I can get a HELOC against the value of my home. Who needs equity in a home “equity” line of credit? Not me!

[@AnalyticalMenace]

No, it really shouldn't. I can understand why most millennials and zoomers say they'll never own a home or retire.

[@albajessicalove]

​@@brettmortenson5181Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@AnalyticalMenacecheck her out on Google or check her website

[@pamelaj25]

I did this two times. The first time was when I got divorced. I paid off a 50k mortgage in 3 years as a single mom. Then, I did it again , mostly .B. As a single Mom. I paidas an extra $600.00 a month. I am thanking God above for leading me in that direction. I should have had a custom built home (expensive home) paid off in 2016. What I couldn't anticipate was my future. I had to have a back surgery that didn't pan out! I became disabled. I thank God everyday that I did this. It made the difference between losing my home or almost paying it off. Listen to this guy. He is right 👍

[@destinyvasquez6849]

Im only paying 200 more on top of my mortgage u think i should pay more

[@jcs1492]

Thanks for posting, all I could say has already been said here in different ways. I just called my credit union to open my HELOC. You've made a subscriber out of me.

[@muhammetisk7290]

*Creditlord* literally gave me a fresh start. Before, I was stressed out and exhausted from being turned down from lender to lender. As of now, I'm currently in the phase of purchasing a home. I'm more confident and I feel more secure.

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score.....

[@elmo257]

Just want to say that I'm Canadian, so the bank rules might be different in your country. First mortgage was paid off in 5 years with an interest of 9.4% (back in 1994). Saved up and purchased a rental home and paid that off in 3 years (4.3%). There are many ways how to achieve this. Check with your bank and find out the rules on your mortgage. With a fix mortgage, most bank will allow you to make one extra payment per year (either calendar year, or anniversary year). So basically, just save as much as possible and deposit as much as you can (to the limit....some bank will allow you up to 20% of your initial value of the mortgage borrow....so $200K, you would be allow a max of $40K per year at 20%). If you're your income is weekly, you would get 26 pay check per year, and not 24....meaning change your mortgage payment to weekly...by doing so a 25 year mortgage will drop to about 20 years....and you would not even feel any pain. Always remember it's not what you do in the last few years of the mortgage, but the first few. Just use something online and see how much interest you're paying vs the principal. Example, let's say your mortgage ($300k) payment is $1,700/month, about $1200 is in interest, while $500 goes toward principal. I know this will be hard, but for easy math, you were to find a way to save $1K/month, that's $12K you can deposit toward the mortgage. By doing this, your mortgage had just dropped by 20 months....20 months of interest, so about $10k in savings (not to mentioned that you paid off your mortgage faster, meaning more time to save for retirement). IF your mortgage is on calendar year, you got a few months to deposit some money towards your mortgage...even it's just $500 (using the example above)...just that alone will take one month payment off you total mortgage...saving you $1200. Can't stress my method works, the only problem is that everything is on paper....meaning you don't see the vacation, or the brand new flat screen tv....you have to wait, and when your mortgage is paid off....you can sit back and enjoy....retired at the age of 40.

[@blueapple9135]

Per retired at the age of 40, Too bad, i'm 40 and just bought a new home. thanks for your advices, i will follow it as much as possible.

[@miguelbernal1435]

I just turned 25 and I’m buying a house soon. As you said, I did all the calculations on paper and probably won’t be able to get a brand new car or travel every year but it will feel great to cut the debt from 30 years to maybe 10-15 and be debt free in my late 30s/early 40s

[@steveconnor3311]

Good job explaining all this. 👍

[@stephaneplourde5944]

@@miguelbernal1435 way to go! Im 6 year in my journey to pay my house im 14 years. Puttin more than asked to pay principle faster. Still investing moneu eslewhere too cause life made me learn not to put all my eggs in the same basket !

[@AW-kc4zv]

The bank already fix your monthly payments for 360 months. You can pay them off in 30 years or shorter but it won’t change your total interest. You just save your current money to pay your future bills. And always future money is cheaper than current money.

[@rentospropertymanagementso4895]

The explanation truly motivates. Thank you for sharing.

[@Major_Pipps]

I'm impressed with how easy you were able to break down and explain this info. Nicely done

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score

[@bradkroboth5490]

Great video, my wife and I have been rounding up our payments to pay down the principal balance. It may not be much over our mortgage payments, but it shortened our loan by a few payments earlier. $25 now is $1000 later . We just refinanced and shortened our loan by 3 years and received a lower interest rate, it's going to save us about $50k overall

[@OMERDULI]

You can also call your bank and see if they would allow you to pay your monthly mortgage payment via bi-weekly. You gain one extra payment at the end of the year.

[@brianesbaugh6897]

This seems very fascinating but has it changed because of increasing interest rates but especially increased inflation?

[@kooljc7]

Nice that’s beautiful

[@sooner1125]

@@brianesbaugh6897 my heloc rate has gone up a ton. I’m in year 11 of 3.25% and haven’t paid a dime extra. I’m buying up as much as I can in stocks. Owe $225k on the house and invested $40k last year in the bear market. Hope to do that much or more this year. We make $220k (Dual income) before taxes but live on about $10k a month.

[@yahshua1110]

I have been thinking with current technology of online banking, why couldn't I do DAILY payments and save a ton, especially if I can increase the amount paid over the monthly mortgage amount. I just refinanced and was told I can make extra payments without penalty. Why not just schedule daily payments? Has anyone ever done this? I couldn't find much by Googling it but when I did it with a mortgage calculator it seems to make a big difference, I can pay off a 30 year loan in just over 10 years by adding a few bucks a day.

[@101448]

Sam I was a Loan Manager for a bank and NEVER saw a fixed HELOC and most of them can cap at 18%. They are priced according to prime plus 0.00% and sometimes there is add on.

[@kkakdugiman]

I finally paid off my whole mortgage in 5 1/2 years. This has been quite an achievement for me. Thank goodness I did well in saving money for many years since I was a teen.

[@charlenelynch6505]

Wow 👍👍👍 congratulations!

[@kkakdugiman]

@@charlenelynch6505 Thank you very much!! It was quite an accomplishment!

[@princessmdify]

Congratulations 🎉 👏 🎉 well done

[@kkakdugiman]

@@princessmdify Thank you very much for that!

[@matildalengwati8350]

Well done... I paid up in 7 nd a half... I'm on the second debt, how go for 5years?

[@henrythomas7112]

A decent enlightening post that you have shared and appreciate your work for sharing the data. I value your endeavors and all the best. Praise your work and continue sharing your data.

[@LaChicaCumbiaMexico]

I love the way you are explaining..thank you so much! this información open my mind !!

[@hugomoves3015]

I have a Heloc from BOFA with a variable rate. When I locked in the rate I was told it can easily convert to a fixed rate after usage. Now that I’m ready “fix the rate” they claim the only way is to get a mortgage and amortize… make sure to pursue the fixed rate option up front. That is what I’m working to resolve now… good luck all.

[@Dbb27]

BOFA is a den of thieves.

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score...

[@albajessicalove]

check her out on Google or check her website.

[@asyourattorneyiadvise9063]

I have worked in banking for many years and you nailed it. 99% of people do not get it

[@Christorment5]

It’s very simple, so basically this mortgage vs heloc is like life term insurance and whole life insurance. Having whole life is like having a bank account, the money you take out you eventually put back in and the interest you have also goes back into the account so it’s almost like paying yourself and going in debt with yourself. Very simple but also dumb because what happens when you owe yourself and can’t pay yourself back??

[@beernutzbob]

@@Christorment5 The people who benefit most from whole life are the agents who sell it. The commissions are some of the highest of any insurance or investment product.

[@jaspreetbuttar332]

But will the banks let u do it? Wont they charge hefty penalties for paying mortgage early?

[@beernutzbob]

@@jaspreetbuttar332 Most single home mortgages have no prepayment penalty. FHA and VA loans can't include them and if mortgage company does include them they can't last for more than 3 years. Mine is with Rocket and I've paid extra principle for more than a decade. Just $60 extra a month took almost a year off the term of a 10 year refi.

[@debz7682]

I’m 99% of people

[@itsreallyrona]

Awesome info and explained so easily! You’re a great teacher.

[@TheKwakBrothers]

Glad you think so!!! We appreciate you!

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score

[@thelmawilliams4500]

Excellent & right on time for me! Just talking to my Loan Officer about a HELOC! And recently made the decision to 'Payoff' my home. Thanks for the education!

[@ManuelHernandez-xt8pr]

You spoke correctly at 17:00 check to mortgage at $200k, but at 19:00, balance should be $194k after applying $6k income to pay down heloc. Concept not lost, but details are important when dealing with finances.

[@liammclaughlin2881]

Duh, no kidding. I used my mortgage as my saving account. Meaning that I was getting 4 38% interest on every payment I made. I kept a few thousand dollars as an emergency fund and ALL the other money I had went towards my mortgage. I was making 6-7 additional principle payments per month. If I got a bonus from work, it all went to the mortgage payment. All my tax return money went directly towards the mortgage. I found a Heloc at 2% and took that. I paid off the remaining balance in 1 year. I paid everything off in 6 years. I didn't have much in savings then but I sure do now.

[@geodel1767]

Just found this video Very informative and detailed so I subscribed and gave thumbs up Going to binge watch the others you have Thank you for a great video

[@TheKwakBrothers]

Aw it looks like you unsubscribed.

[@thedaalexander-lantican724]

Wow! A brilliant financial guru! Thank you very much!

[@guanghua2008]

Thanks for the video, I am in process getting Heloc

[@EricStrobel09]

Step one. Have or make a ton of money.

[@SerenityChamber]

This is the MOST CLEAR EXPLANATION of a HELOC. Thank you! Subscribed!!

[@TheKwakBrothers]

Awesome!! Thanks for your kind words!

[@scotchandfades1502]

THANK YOU SO MUCH. I was expecting some bs nonsense but this strategy blows my mind.

[@suz6593]

Just found this! You are such a great teacher. Thank you.

[@TheFirstRealChewy]

This doesn't work for me, but it may be fine for someone else. There is a cost to opening a HELOC. Even if you use a HELOC to pay off your mortgage, you still owe that money as a HELOC. Having the interest accrue daily on the HELOC works best for the lender. That limit of 90% value, assuming you can get more than 80% value, is also constrained by what you owe on your mortgage. So in the example, you only have access to $70K calculated as $270K - $200K. Assuming you already have a HELOC, paying off an initial credit card balance with a HELOC is fine. The reason is that you'd be paying off a high interest loan with a low interest loan (essentially a balance transfer). However, once the credit card is paid off, you should be able to pay off any future charges to the card at the end of each month without using the HELOC. If not, you are in for a world of hurt. It doesn't matter if you directly pay your credit card bill with your paycheck, or indirectly pay it using a HELOC. If you can't pay off the credit card and must carry a balance, then it is better to carry the balance on the HELOC than the credit card since the card will have a higher interest rate. However, you need to bring in enough to pay off the credit card and pay back the HELOC. If your credit card is being paid off each month but the amount you borrow from the HELOC keeps increasing, you are still losing. Your goal should be to pay off your debt fast. It doesnt matter if that debt is a mortgage or a HELOC. The HELOC allows you to borrow the equity in your home, but doing so will simply increase your debt. There is also a high probability that the interest rate on your HELOC is worse than the interest rate for your mortgage. The best way to pay down the mortgage faster is to pay more money towards the principal. Replacing a high interest debt with a low interest debt (a reason to refinance) will help, but you still have to pay off the debt.

[@QuanNguyen-og6pq]

exactly. When I look at the title of this video "Paying off mortgage in 5-7 Years", I was like "Woah, it's must be some secret hack, let's see what's going on here". But after spending 25 min listening to this, I realized that the core solution (at least in his case) is to put $6000 into paying off the debt (doesn't matter HELOC or mortgage). If I had $6000 every month to do that, I might as well use $1000 to pay the mortgage and $5000 to pay the principal, then I'd pay off my $200,000 mortgage in just 3 years. If I misunderstood the video, please explain it to me.

[@6SpeedsGood]

@@QuanNguyen-og6pq You didn't misunderstand, the video is garbage. If you owe $200K, that's $5,555/month for 36 months, no interest. There is no magic here, just smoke and mirrors while simultaneously putting folks into a seriously illiquid position in life, while also putting them at the mercy of a bank call on the HELOC, a catastrophic position for almost anyone. Good times! And if your mortgage rate is below 4 or 5, you're even better off putting that extra $5k into a Vanguard fund!

[@QuanNguyen-og6pq]

​@@6SpeedsGood Thanks for clarifying.

[@sarahtaylor7722]

FINALLY! I've been telling people about the way amortization charts are scheduled ever since I figured it out. It's NOT common knowledge, and the banks don't want you to know about it either. THANK you, sir, for bringing this to light!!

[@debz7682]

Girl I’m glad you got it, I’m so lost

[@albajessicalove]

​@@debz7682Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@debz7682check her out on Google or check her website

[@613pics]

Sooo great! Thank you. How much hope is being spread!

[@TheKwakBrothers]

You are so welcome! Thanks for watching :) Feel free to share

[@paulgugger8987]

I started doing this and at first I would send a $5000 to $7500 check with my HELOC, then one month I sent $15000 and to my surprise my payment had dropped $400 a month, I called the loan company to ask why and I was informed that anytime I send a payment of over $10.000 over the mortgage amount they reamertize the loan.

[@mahsih2007]

easier done if you have a certain income etc. As well depending on the interest rate it may not be better to pay off the mortgage as quick and better to actually invest money in more income producing opportunities that pay far more than what your mortgage costs. Also yes you can put yourself in a 15 year but I prefer 30 and treat it like 15 this way if something happens financially in your life then at least you are not obligated to a higher monthly payment !

[@paulmasonmiller]

I am doing the same and adding as much additional principal payments as I can but I dont see the loan being paid off much faster

[@steffie6510]

@@paulmasonmiller then you're doing something wrong!! If you make one payment extra a year on a 30-year mortgage you will cut off 7 years right off the bat!! You need to call Sam Kwak I know him personally he's awesome and so intelligent with money

[@steffie6510]

You clearly missed the point there are no extra payments being made you're paying the same amount just threw a different Source instead of dropping it into your checking account you're dropping into your HELOC account. You are not understanding what was just demonstrated

[@destinyh9497]

Same!

[@albajessicalove]

​@@paulmasonmillerMaria Brisbane helped me secure HELOC with 650 credit score

[@tadehaloian5747]

This was a great informational video. Hoever, you forgot to emntion an important fact that you need to have more equity, in fact more 80 to 90 percent of equity than the balance your current mortgage debt to pay off and close your mortgage. Most people may not have built enough equity in 7-10 years to be able to pull a HELOC out and pay the 30 year mortgage balance off. Plus, we are talking 7-10 years into the mortgage and then just starting to pay off the mortgage and start the HELOC with another 5-7 years, whioch will be som ewhere around 20 years. Yes it will reduce 10 years off of 30 yr mortgage, but isn't that also possible by just putting more toward principal in that initial 7-10 years (front loaded period). What's your idea folks?

[@6SpeedsGood]

Right, this entire presentation is bogus. He goes from bemoaning front-loaded interest, which yes, sucks. But then jumps to an example where he borrows 90% of a magical $300K in equity to create a $270K HELOC. Newsflash - there is no $300K equity in almost any mortgage that is still in the year 1-7 age (some coastal & crazy markets excluded). A point to be clear on - a HELOC is borrowed against EQUITY, not against VALUE. Consider a 30 year, 5% mortgage with 10% down on a $300K house. End of year 7, loan principle is $237K. To grab a 90% HELOC to cover that, you would need $263K in EQUITY, which means a home VALUE of $500K. Maybe the home appreciated 67% in 7 years? That's 8% a year, with no corrections, so a very big maybe, but even then you're already 7 years into the front loaded mortgage interest! You've already missed the big payoff he is selling! There is basically zero scenario where this HELOC strategy could possibly work any earlier than year 7, and even then only in a perfect world of ever-increasing home values. And, that leaves out the very real chance the bank could call your HELOC. He downplays that, but it creates a 30 day window where you come up with $237K cash, or you're on the street. Do you really want to run that risk? Misery loves company, so a market downturn + housing downturn + job losses all ride together, so the circumstances in which your loan WOULD be called are all during the worst possible time. Also, the cash swap to credit card strategy requires so much discipline and timing, it's essentially impossible in the real world to repeat month after month for years, and leaves you so illiquid for other emergencies, it's just terrible, terrible advice. Also, many HELOCs are variable rate. Also, many have pre-payment penalties, unlike mortgages. This advice has so many landmines, that the cash-strapped people this advice is targeting are almost guaranteed to get sideways on it. The only good news is that almost no bank is going to engage in it, because you'll never have enough equity early enough in your loan to come anywhere close to the savings he is selling. So this is really just a 20 minute smokescreen. Just pay more towards your principle if you really hate mortgage interest. Or better yet, invest the difference in a Roth IRA wit superior tax advantages or a brokerage index fund that will likely return more than your mortgage rate over time.

[@COOL_DAD]

That's what I was thinking, thanks for the explanation

[@eliasr.s.7473]

Agree, that’s what I was thinking too. I’m like did I miss something here, where did this guy get 270k from? Just like 💨 out of nowhere says his home gained a value of 270k. Shady stuff

[@immelting9834]

@6SpeedsGood What about putting the smallest amount down then on the 1st mortgage payment; give as much as you possibly can ?

[@maheshmahadeva8222]

@@6SpeedsGood if you have not paid extra payments, even theoretically it's not possible to pay down a 30-year mortgage in 7 years

[@WorryDontAbout]

This video and concept gets better as I continue to watch this

[@document6]

Nick the video itself is the gift Thank You Thank You!

[@intownrentals]

Incredible information! Thanks

[@TheKwakBrothers]

Glad you enjoyed it!

[@xBLUMONKEY]

Stumbled upon this video. This will be SO helpful when I buy my first home in the next year. THANK YOU!!! Subbed, most value I've seen in literally any video

[@sandramarten3495]

Next year ! You do realize Mortgage rates have doubled, and will probably hit 7% in September?

[@rogerdodger1790]

Just found your channel today, you guys are amazing thank you.

[@WorryDontAbout]

Great video, was wondering how refinance interest worked and showing it! Ty, best video I’ve seen and explanation

[@burieddreamer]

This is crazy, it's like living off a credit card! One has to have nerves of steel to keep track of what's going on.

[@GeneralChangOfDanang]

Not really. Just set an autopay on your credit card so you don't screw up and end up paying interest.

[@CarlosReghis]

Brilliant! most borrowers doesn’t understand compounding interest

[@TheKwakBrothers]

Exactly!

[@marshallwise1763]

@@TheKwakBrothers or compound finance charges!

[@jasonbrown7258]

@@TheKwakBrothers my home been refinanced a couple times. I went through divorce and chapter 7 bankruptcy in 2011. At that time owed around 137000. Got a loan modification it's at 3.5% 750 per month i now owe 93000. Also there's a second mortgage that went through bankruptcy also but it put a lean on the place. So I owe 93000. Plus 26000 on the lean. From my understanding I don't have to pay the lean unless I sell which I got no plan's to do. Will this Heloc work for me?also what can I do about that lean. Is there a way to get rid of it. The maturity date on the mortgage is 2050. I'll be 78 years old by then. That means I can't retire until then because there's just not enough money. Any suggestions?

[@carolinacatalino4125]

Wow this couldn’t be better explained 👍🏽🙏🏽😱 thanks I wish I have someone who can help to do this.

[@FoodyLizcious]

Very informative. I love it.

[@Al_chemy_369]

Excellent video! You keep getting better and better! Cheers! 🥂

[@TheKwakBrothers]

Thanks Albert! Appreciate your kind words!

[@BriLoveMusic]

Wow. I'm so grateful for you! Just subbed! 😊

[@BradfordStokes]

He's a scam and doesn't know what he's talking about

[@suade9940]

Learn about Dave Ramsey’s for financial freedom.

[@suade9940]

Dave Ramsey’s plan*

[@juanf9078]

@@suade9940 what si the KZbin channel?

[@steffie6510]

Sam is the best and boy does he know his stuff! Well done!!!!

[@glemarsgumahad9432]

Thanks 🙏 you so much for this strategy, have great wonderful day

[@ChristyNicole7]

This was SO incredibly insightful and easy to understand - thank you! I am currently on the hunt for a HELOC, wanting to invest in a second property and this has been really valuable!

[@natstar6052]

Have you been able to find one?

[@albajessicalove]

​@@natstar6052Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@natstar6052check her out on Google or check her website

[@itsleeshahaneef]

This is very interesting and The explanation was so simple and on point. You kept me hooked to the end and taught so much. My only problem is I live in a country where Banking and Finance is still very weak and home interests are so expensive, 12-14% charges as much as commercial rates. I wish we have something like this. But looking forward to invest abroad and will definitely look for this option

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

check her out on Google or check her website

[@rhinox0110]

Thanks for the video and advice, it is very appreciated.

[@ThoraStCyr]

Your talk was very interesting, and I learned so much from you regarding heloc.

[@otoolefinancialgroup-debtt7487]

Gotta pay off that mortgage as fast as possible. It's the interest that is killing you..! The best way is to make strategic, lump sum payments, at specific dates, to eliminate future mortgage payments & eliminate interest. For example: Based a $200,000 mortgage...if you sent in $5,000 with your very 1st mortgage payment, you would knock off 23 payments & save over $23,000 in interest. Once the mortgage is paid off, you can then use those monthly payments to invest in wealth building products. Maybe an annuity, IUL or a whole life policy. You can then access those funds in the future tax free.

[@CdotForbes13]

I did this exact strategy on my last house for 2 years, just sold and going to do the exact same situation on my new home I’m building. It’s also my emergency fund along with a way to liquidity if I want to invest. I explain this to friends and a lot are afraid to go outside the traditional norm (fixed rate 30 year). This is the smartest way possible with no limitations as long as your responsible.

[@TheKwakBrothers]

Someone gets it ;)

[@mikeandsues2752]

Yes but if you don't have a lot of equity in your house then you have to pay the original mortgage as well.

[@TheKwakBrothers]

@@mikeandsues2752 Hi Mike and Sue, we have many clients who get started using our strategy with little to no equity! There's still a way!

[@KDLew88]

What about lower income... like $1500? Can they pull this off?

[@mikeandsues2752]

@@TheKwakBrothers Can you elaborate?

[@solagracia777]

This is very informative, thanks!

[@younghoyoo8366]

This is not a calculated financing advise but a lifestyle advice in my opinion. With this method: -you don’t put any money away -your heloc available balance is what you can use for emergency -pay off as much mortgage principal as possible for 5-7 years -get credit card points You can technically achieve the same result by paying extra principle. For example if your mortgage is 200,000 at 30 years at 3% your payment is $843. If you make extra $1800 per month ($2,600) you would pay off that mortgage in 7 years. Your literally saving maybe $4 in interest per month with the extra $1800 balance reduced on the first month (1800 x 3% =54 /12 = $4.5) With the interest rate being so low for a fixed mortgage this makes 0 sense. Get a 30 year fixed mortgage and dedicate yourself to paying extra each month. Your interest/principal for the following month is AUTOMATICALLY ADJUSTED from you paying extra $1800 the first month so your not paying interest on the previous months balance. *coming from a retired loan officer

[@younghoyoo8366]

Correction if your income is about $10,000/month then by putting everything into heloc each month you would save $9,200x3%=$276/12=~$22/month and then following month the difference in interest goes down to YOUR INCOME - EXPENSE - INTEREST. So for example 10,000-6,000 expense - $500 = 3,500 x 3% / 12 = roughly $8 per month. Really penny pinching with all the risk associated

[@ralstondorn7874]

My thoughts exactly

[@cashkitty3472]

In UK a lot f mortgages are on average daily interest.. I paid my last house of quickly by using an offset mortgage. This takes your savings and mortgage debt into one account. You can access your savings at any time but it offers savings interest of mortgage debt. It's an Australian system

[@garyK.45ACP]

We paid off our 30 year mortgage in 6 years and 3 months. We worked every hour we could and paid every extra $ we could every month. No HELOC. I do not borrow money to incur debt to pay off debt. We are debt free. No car loan, no credit card debt, no mortgage, so student loans. Any credit cards we use, we pay in full every month. 800+ credit scores for both my wife and I. Now we are both retired. 😁

[@mkultra11]

Thank you so so much for explaining all of this 🙏🏻God Bless

[@whytemyke]

I actually love how clever this is. The biggest downsides I can see are 1) Finding a low interest, fixed rate HELOC, and 2) Making sure you have some control over when the lender turns off your draw period on the HELOC. I know you're saying you've got lenders who haven't shut down the draw period during economic downturns but those types of lenders are few and far between. Anyways-- great info and video!

[@TheKwakBrothers]

Thanks for getting it! Lol

[@bigboneill]

@@TheKwakBrothers The math works out, I ran an 84 month model. Exactly what Dan said, without those conditions it's pretty risky potentially having to come up with the balance unless the terms are concrete. Was about a 35% deduction for interest paid even compared to a 15 year.

[@marshallwise1763]

Its not about the interest rate on the HELOC or the 30yr Mgt. Its about time to pay off your Mgt and using lazy money accumulating in one's checking account.

[@keysoteriq2590]

@@marshallwise1763 doesn’t that all compute to having a low interest rate?

[@marshallwise1763]

@@keysoteriq2590 CMG, even during the 2007 crash they kept the HELOC open. Reason, they only work with A paper people.

[@laurelleafr6091]

It is so good to watch this today, after we just paid off our home a couple of days ago after only 5 years instead of 30! We did it! yay!!!

[@AzeemUrRehman]

How you achieve that ? Is it through heloc ? Congratulations

[@laurelleafr6091]

@@AzeemUrRehman No, we had an FHA mortgage and we didn't even put down 20% when we bought it. This gave me even more ambition to pay it off in less than 10 years. What we did was we paid more than requested for the principal every month and also I saved a lot out of my salary every month for this purpose. More than 50%. It took a lot of discipline and focus.

[@EugeneCollins2024]

@@laurelleafr6091 So, how many additional/separate monthly payments did you make towards your principle?

[@laurelleafr6091]

@@EugeneCollins2024 I paid more towards the principal every single month for 5 years with the exception of the very first month. When i got my first mortgage bill back in 2016 i analyzed it and saw that extremely little was going towards the principal Seeing that I decided i will always pay more. towards the principal with each monthly payment. I didn't make additional payments each month . I only made the monthly payment adding more to the principal. Then in March 2019 I finished paying my car. I took that money of $ 250 every month that I now stopped paying and added it to the mortgage principal. Then ... Starting August 2020 I made sure every month my mortgage TOTAL amount was decreasing by 400. So depending on this I calculated how much i had to add to the principal. Finally starting January 2021 i made sure every payment was decreasing my total amount by 500 each month . Thus in May I had enough savings to pay off the remaining 76000 to the bank. I basically Brought the loan down from 91500 to 76000 in 5 years. Then paid the 76000 to the bank. Remember I put 16000 down when I bought it which was less then 20%. After the downpayment the loan started at 91,500.

[@leehughes1671]

Great Information! Thank you!

[@TITOFROG1]

Thanks for your informative and helpful video to pay down our mortgage as fast as possible. Too bad and wish I learned to do this before when I was younger and still working and had a large mortgage. Anyway, kudos for this good tip and hope your viewers follow this suggestion.

[@theopenrepublic]

For those who live in the UK and stumbled upon this video, the HELOC is equivalent to an Offset mortgage. I use the HELOC (Offset)-Credit Card strategy as well, and it really does work.

[@matthewhook3375]

I'm in the UK and just stumbled across this - please could you elaborate on the offset credit card strategy?

[@theopenrepublic]

@@matthewhook3375 Sure. The basic premise is to use your credit card to maximise the length of time you keep the most amount of money in your Offset Mortgage account so as to minimise the amount of interest you pay on your mortgage. So you make all purchases using your credit card and don't use your debit card at all, because if you do, money will go instantly from your account. If you use credit card, you have 1 month before you have to pay, and this keeps more money in your Offset Mortgage account every month. And since interest on your mortgage is calculated daily, the longer you keep the most amount of money in your account, the less interest you're charged. And if you pay off the entire balance on your credit card each month, you will maximise the benefits of this strategy. Another tip is to change all your monthly direct debits / standing orders to a day or two before you get paid your salary. This will keep the balance in your account to the maximum level each month, thereby incurring a reduced interest charge. This is the Offset-Credit card strategy in a nutshell. In fact, you can do this with a regular bank account too. Keep the most amount of money for the longest time to earn the most interest per month.

[@matthewhook3375]

@@theopenrepublic thank you for the explanation, I guess my next question is what is an offset mortgage account? I haven’t come across these. I already use an Amex cash back credit card for my day to day spending and my salary is paid into a current account, where it earns a pathetic amount of interest until it goes out to pay the Amex bill at the end of the month.

[@theopenrepublic]

@@matthewhook3375 With an Offset mortgage, you use your monthly savings to "offset" the amount of interest you're charged each month on your mortgage. So if you have £10,000 in savings and a £100,000 mortgage, you pay interest on £90,000 (£100,000 - £10,000). You can then use the saved interest to (1) reduce the amount you pay monthly for your mortgage, or (2) reduce the term of your mortgage - so you pay if off early. The more money you have in savings, the greater the benefit you derive from offsetting. Another advantage is that when interest rates go up, you get a bigger benefit from the offset. You will also save 1,000s of £ in interest over the lifetime of your mortgage. The big drawback is that you don't earn any interest on your savings - because the interest is being used as the offset. But TBH, the interest rates are so pathetic at the moment that you aren't really missing out. If you want to know more, check out Barclays, Coventry building society, or Clydesdale Bank. They offer offset mortgages and have more information on their websites. There used to be more banks offering offset mortgages, but in recent years, many have stopped offering these. They are well worth thinking about if you are looking to re-mortgage.

[@matthewhook3375]

@@theopenrepublic thanks again for the explanation, I’d never heard of these mortgage products. Unfortunately I’ve recently remortgaged to Lloyds on a 10 year fix at

[@danohuynh9302]

You can’t learn this in school. Great stuff. Life experience only has true value.

[@mehardin]

I would hope they wouldn't teach this in school, because it's awful financial advice and bad math.

[@sharonwilson9836]

Thank you for the information. I am seriously looking to change over.

[@jf1890]

Huge trouble for big spenders or gamblers. Unlike a checking account, your house and property are gone when your equity balance hits $0 on a HELOC.

[@KimFincher]

This requires great credit #1 n discipline #2

[@56awesomethings]

Just a bit of caution...If home values go down the bank could freeze or lower the amount available on the HELOC and then you will be stuck with credit card debt.

[@tarikawalker7291]

Good video I never heard of the interest rate changing unless the company specifies that. I will do more research on that topic

[@rickharks4515]

When we bought our first home, back in the day when things were cheaper, we were told to put and additional 50 dollars per payment and that goes directly to the principal.. and then after that when we sold and got a little larger home (went from a 725sqft home to a 1200 sqft home) and we only locked in for a year, we decided to double our payments to pay it off in 12 years, well we paid it off in 10 years. If you can afford it, tighten your belts and go double payment for as long as you can. With our first house, we tried that HELOX, and didn't like it, it was to flexible for us. we needed that locked in mortage. Cause with the HELOX you got a credit card to go with it and we over spent without really keeping track of it, till a light went off in our heads, and we buckleted down and went back to a mortage. There was no more stress on that. knowing it was coming down for us. Just our thoughts and experiences.

[@michaelcrabtree2939]

Jus pay more than you owe ....simple as that and you'll be paying it off in no time.

[@MichaelDavis-uu9zh]

An extra payment a year will pay it off in 22 years.

[@KimFincher]

Yes much simpler

[@KimFincher]

@@MichaelDavis-uu9zh pay more on principle every month

[@MichaelDavis-uu9zh]

@@emmanuelsepulveda2468 how many extra payments a month shots it take for 7 years?

[@GingerHater1231]

@@emmanuelsepulveda2468 we are doing the same, and we’re also halfway - and my name is Emmanuel too ! I had to double take 😂

[@TheArmadalatina]

Amazing advice! Thanks for your financial tips, greatly appreciated.....for me to have made it till the end, proves that you are a great and FUN teacher!!

[@TheKwakBrothers]

Glad it was helpful!

[@kellygerms3044]

Outstanding Video. Thanks!

[@crystalstorms880]

Thank you. I have been working on getting my credit better. Thank you

[@Subliminalmessage78]

@@miriamheeter713 Credit restoration or repair?

[@apalmq]

When 15 year APR is near 2%, it's advantageous to just pay extra monthly. Rather than a 4% - 6% HELOC.

[@winniethepoohandeeyore2]

Exactly. All we do is overpay our principle every month by just $20. We closed April 13th. First payment wasn't due until June. We've already knocked 3 1/2 YEARS off the life of our 30 year fixed mortgage

[@brianparks8321]

You have to do the math based on the rates you can get. I have a 2.24% HELOC. The lowest 15 year mortgage I could find is 2.375%.

[@apalmq]

@@brianparks8321 in my case I bought down the rate to 2%, and just closed on my 15 year mortgage.

[@hernansalinas713]

Depending on the balance it will cost a lot more to send extra payments. If you send 10-15k chunk and pay down the heloc it will be much beneficial than to send 416 dollars of extra payment monthly for 2 years. The amount of interest in 2 years for 10k will be 420 at 4%. But those 10k will eat at the principal and reduce your interest greatly

[@dhruvvyas4317]

For complicated banking reasons, This is only a good idea if you can get a HELOC with lower intrest than mortgage. Which is possible if you compared to a fixed mortgage but unlikely for a variable mortgage. Variables mortgage tend to give you the best intrest rate anyways and HELOC is a type of variable mortgage. I love HELOC, everyone should use it for used car purchases but I don't think this strategy would be better than a variable mortgage. US banks don't offer good variable rates though so it might be better there.

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score......

[@magdalenetan87]

Thank you for this info! 💟

[@alexboshoff8219]

Thank you so much ! This is serious alpha!!

[@jayblom8671]

Am I missing something? This is incredibly informative but how did you get a $270k HELOC when you still owed $200k on a $300k valued home? How was the HELOC $270k vs. $70k? I get you're using the 90% rule but I thought a HELOC was only for the actual equity amount (i.e. $70k in this instance?).

[@quasimo1412]

You're not missing anything, the math does not work in the video example. HELOC's are usually structured at 85% of the available equity in your house. So if your house is worth $300k and you have a mortgage balance of $250k your max available HELOC would be $42.5k.

[@BMLM49]

Used a 1st LEIN HELOC vs 2nd (traditional) HELOC.

[@albajessicalove]

​@@quasimo1412Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@BMLM49check her out on Google or check her website

[@BMLM49]

@@albajessicalove Who?

[@irishissey2392]

Great content! Man I wish I would have watched this before I refinanced last week.

[@albajessicalove]

Maria Brisbane helped me secure HELOC with 650 credit score..

[@JacquelineLavielle-pp8db]

Love the info thank you

[@purificacionabrantes611]

It is really nice information which I think I should do. Thank you😊

[@williamgates4399]

You never explained how the HELOC is paid off in 5 to 7 years. You are only replacing mortgage for HELOC and you still paying on a loan.

[@stevemellos2658]

He didn't explain that part very well but it's because your mortgage is amertized interest he did explained in the beginning of the video that you pay all the interest upfront. your heloc is not amertized it's a simple interest rate like a credit card accept with a lower interest rate, so your paying more money toward the balance every month and you will pay the heloc off way faster. I know it sounds confusing but once you understand how amertized and simple interest rates work it will make a lot more sense

[@thebolt1806]

Yes something is missing I got lost in between

[@samij1204]

From what I understand, your whole income goes straight into the HELOC, and your expenses all get paid through a points-rewarding credit card, then you draw upon the HELOC at the end of the month to pay off the whole credit card, thus paying no cc interest and gaining lots of points for travel and other rewards purchases. The big payments against the principle mean you pay less interest at the end of the month on the HELOC, and pay it off much faster. I think 🤷🏻‍♂️

[@07wrxtr1]

It's simple; You're paying a few days of interest at the higher amount on the heloc vs. a full billing cycle on the mortgage for that $6000 in the example. It's genius.

[@krss1130]

Yes, and HELOC interest is variable! The bank can just decide at their will to increase your interest rates! It's better to have fixed mortgage rates rather than HELOC variable rates.

[@rebeccaewing9980]

BEST CREDIT REPAIR TEAM OUT THERE❤

[@harryolowo1823]

Who are you talking about? i mean i don't get it

[@jaimethomas5066]

who?........send me the link asap

[@KarlaJammin]

I did mine in 4 years by hustling 2 full time jobs. Thank God I did it! Now it's time to start a business and increase my investment.

[@thegatkids]

if i knew this video i would definitely follow your strategy...i fully paid my mortgage in 5 years too but mine is totally different i used my TFSA account by paying off my mortgage. I got lucky with options and stocks that made money then i withdrew to pay my mortgage especially before the pandemic...good luck to all

[@johnmatallana8106]

Great video and explanation. in the 1st portion of your explanation where you use the graph with the 30yr loan and the $1,000 a month mortgage, with a fixed rate. Can you make a video or explain taking into account inflation in that same scenario? What would inflation do to that loan? Would in that case be beneficial to payoff that mortgage as fast as you can, or should you just pay the minimal and allow inflation to eat up the loan? Once again, great video and thanks for sharing.

[@unpredictable244]

A 30 year loan is fixed. Meaning it's the same every month. That amount will ONLY change unless your escrow goes up (insurance/property taxes)

[@johnmatallana8106]

@@unpredictable244 I understand that. That really does not answer my question though.

[@micoculumovic76230]

Great question, hopefully someone will give good explanation for it. I’ve been asking myself the same.

[@Adam-ui3ot]

Inflation doesn’t affect the loan. Interest rates affect the loan if the loan is variable and not fixed.

[@6SpeedsGood]

One major benefit of a 30 year fixed is that inflation actually makes the payment feel cheaper over time. Your $1,000 P&I (principle & interest) payment today, at 5% inflation, will "feel" like a $784 payment 5 years from now, even though nominally it is still $1,000. $1,000 in 5 years is just worth less than $1,000 in the hand today (assuming inflation continues). From the other direction, that $1,000 payment in 5 years will have the same feel as a $784 payment would have today. Or look at it this way: Say you make $50K today. $1,000/month is 2% of gross. In 5 years at 5%, you're making $64K, and that $1K payment is now 1.5% of your gross. It's an easier payment to make. Compare that to a renter paying $1,000 today. With a 5% annual increase they will be paying $1,276 nominal dollars in 2028, which will always have the same "feel", it will always have the same sting as your $1,000 has today, that same sting for year, after year, after year. See that $1,276 is still 2% of the new $64K salary. Whereas with a mortgage, the sting gets less, and less, less each year (property tax & insurance increases may add a bit back, but not 5%). Not that a mortgage is for everyone, far from it, but the basic answer is inflation makes a mortgage feel more affordable over time (the unspoken assumption here is that wages are rising nominally with inflation). And a final note, rising inflation is usually COUNTER to paying off a mortgage early, especially when inflation is accompanied by rising interest rates, which has been the style since 1980. Consider...today. My mortgage is 3.89% from 2012. If I can earn more than 3.89% in the market, that is more cost effective than paying off the loan. Heck, right now cash is paying close to 4%. Early payments certainly lessen the total interest paid over time, but the opportunity cost - the value you missed by not instead investing that money - is generally going to be more than the interest you saved, ESPECIALLY if you have a low rate mortgage. People taking out 6% and 7% mortgages today will have a different calculus.

[@vend6007]

Thank you for sharing The Secret! ! Excellent practical info everybody should know😊 God Bless!

[@thunderboxing2344]

Great video easy to understand a subject that is rather confusing to begin with

[@berniegueu8830]

Thanks for all the information. You are an excellent teacher who delivered an amazing presentation. This info was an eye opener. Thanks again.

[@mvparker79]

I’m thoroughly confused. HELOCs don’t have fixed rates until you convert your variable rate into a fixed rate. At which time you’re closing your draw period. What am I missing??

[@tomle2600]

The only issue I see with first lien HELOC, assuming bank won't pull the HELOC when the next great recession hit forcing you to sell or get a new mortgage in adverse market conditions, is if the HELOC is tied to variable interest such as prime -0.5%. If we enter hyper inflation, a traditional front-loaded mortgage may fare better longer term if interest rates rise like in the 70's due to all of the money inflation by the government.

[@TheKwakBrothers]

So two things there... we've never seen a 1st lien HELOC get "pulled" personally with our clients. In fact, one bank has never had a borrower foreclose or default on their 1st lien HELOC since 2007. It's got ALOT of safety nets, in my opinion. Second, you're right about the hyper inflation but the problem is that most homeowners stay stuck in the front-loaded mortgage forever since most refinance or sell/buy a new home e very 7-10 years.

[@thinklikemike2]

EXACTLY!!!!! In 2021 the average HELOC rate according to Bankrate was 4.08%. Today, in December 2022 that average is close to 8% which means DOUBLE the interest! So all that savings now just cost you 4% more to keep this strategy going. If inflation and recession continue, that HELOC rate will keep climbing.

[@albajessicalove]

​@@thinklikemike2Maria Brisbane helped me secure HELOC with 650 credit score

[@albajessicalove]

​@@TheKwakBrotherscheck her out on Google or check her website

[@plantmamadrama9696]

Thank you Sam! I’m excited I hope my husband can be convinced to go for the heloc method! 🙏

[@skip7578]

I'm not using a heloc method at all. I've scheduled myself to make monthly principle reduction payments directly to my mortgage co. It doesn't make sense to me to have the headache of a heloc and pay interest and the amount paid is about the same as from a heloc! I've amortized the payments over time and will payoff my loan in about 4 yrs! I have to stick to my schedule though!

[@wealthbuilderztv2365]

This some great information. I appreciate it

[@TheKwakBrothers]

Any time! Glad it was useful and helpful!

[@Jawnderlust]

You should’ve clarified in the beginning that this is meant for using a 1st position HELOC on one already paid-off property to pay down/pay-off a 2nd property’s mortgage. I’m not sure what mortgage lenders out there would give up 1st position to a HELOC just to get themselves paid off… but they won’t be in business very long.

[@GioV5100]

Can you clarify this please? I am just a regular home owner and have 1 property not looking to invest in a rental property. Is this strategy not good for folks like me? We just purchased our home with a $700k balance. Thanks.