Secret Strategies to Pay Off Your Mortgage Fast

00:00 Into
00:49 Mortgage Interest
02:40 10/15 Rule
04:39 Bi-Weekly
06:11 Dollar-a-Month Plan
07:49 Reminder
08:03 Pay Off Early
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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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Thanks for watching, I appreciate you!

[@shellywhite2145]

Great video, I have a quick question. I am an aspiring trader, I am looking study some traders and earn off their expertise rather than investing myself and lose money emotionally. Whats your take on copy trading? Do people really make money? Just looking for some reassurance

[@hh-uv7kr]

Focus on long term investments in property, stocks, and bonds. Avoid copying, daytrading and 'chart astrology'. Diversify across different geographies, industries, and value chain stages - to reduce your risk. You can do this with ETFs, or by selecting different stocks yourself. This is the best way to invest for more than 90% of people

[@shellywhite2145]

How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?

[@hh-uv7kr]

Ashley Airagahi is her name. She is regarded as a genius in her area and works at ALGO LAW FIRM. She’s quite known in her field, look-her up.

[@shellywhite2145]

Thank you for this tip. It was easy to find your coach. Did my due diligence on her before emailing her. She seems proficient considering her resume.

[@marcusantimony7535]

Pay off mortgage early? Hell yeah! Owed $150K mortgage in Sept 2021. Decided to put the boot in and started making additional payments toward the principal. In less than 3 years I now only owe 24K. Sweet freedom & retirement await!

[@ryebread447]

U must live waaaay below your means. That's almost 40k a year extra towards your mortgage

[@marcusantimony7535]

@@ryebread447 No kidding! Working 2 jobs, very little eating out, no vacations, no spending. It's been hard but once the house is paid off, will mean a $3K/mo after taxes pay raise.

[@personofnointerest]

@@marcusantimony7535if it was easy… you wouldn’t appreciate it… and everyone would do it. You’re gonna scream, cry, maybe faint when you get that deed! CONGRATULATIONS FRIEND! I’m happy and proud of you!

[@scottthomas1894]

Great video Erin. We took out a 30-year mortgage in 1988. This was our second home purchase. We put 25% down as a down payment. I set it up to make bi-weekly payments. We were paying $650 every two weeks. In addition, my wife sent in an average of $150 extra towards the principal. We even made a form transmittal letter indicating that the extra payment was to be applied to the principal only penalty free, citing the relevant paragraph in the mortgage giving us this option. We paid off our 30 year mortgage in 2000, in approximately 12 years. It was a great feeling to be completely debt free. The best thing I did after this was I kept making the bi-weekly mortgage payment, only now it was going into my Fidelity S&P 500 Index Fund. I never allowed myself to get use to having this extra money. You are absolutely correct when you indicate that small extra amounts can save you $1,000’s in interest costs. Thanks for the video.

[@ErinTalksMoney]

Thanks so much for watching! I hope you have a great weekend, and thank you for sharing pieces of your journey 😊🙏

[@JBoy340a]

Continuing to pay the make the payment after the mortgage was paid is brilliant. You won't miss the money and can really ramp up your investment portfolio. This is way better than keeping the extra money in the bank and earning a low interest rate.

[@email6743]

You mean bi monthly

[@Tsuter1978]

The continued payments is the truly genius part of this. So easy to take that extra money and blow it, but honestly never thought to keep the payment going into an investment. Thank you for sharing your experience.

[@aprilracine]

I paid off my 15 year mortgage in 9 years using the snowball method. Since the rest of my debt was gone I threw every extra dollar I could at it. I started ubering to put more money towards it. My main job was waitressing and at the end of the night I would take the last few guest that walked through the door since none of my coworkers wanted them. They always assumed incorrectly that the tips at the end of the night were never as good as the tips in the beginning. Most nights it was like getting a 30% pay raise. By the way, Erin I love your channel. Sending love from, The City of Detroit.

[@umgazel4785]

You’re the first person to talk about the one extra dollar/ $5 extra dollar added monthly payment option - thank you!

[@chiplangowski3298]

The "secret" to paying off a mortgage early is just to put additional money toward the loan principal. How you do that is up to you and your budget. Too many people say that they just can't afford to pay more. But look at it this way. How many people spend $20 per week eating fast food, buying coffee, buying beer, whatever. If they just took that $20 per week, or $80 per month, and applied it to their mortgage principal each month, they could pay off a $400k, 7% interest 30-year mortgage in just over 27 years while saving $60,000 in interest.

[@JBoy340a]

Great topic. We paid off our 30 year mortgage in about 11 years. Because the initial rate was high at 11%, we made sure we bought less house than we could afford. After a year we had increased our salaries and applied large chunks of the increase to paying off the mortgage by making increased payment amounts. This resulted in no change in our lifestyle, but had a dramatic effect on the life of the loan since 100% of the overpayment went to reduce the principal. We kept doing this with most of our raises and job changes over the next few years. Also in about year 5, we were able to refi the loan down to the 8% range. All in all, the process was relatively painless since we had never adapted our lifestyles completely to our increasing salaries.

[@dc100dc100]

I just round up each month. If my payment, all in, was 1428, I paid 1500. 72x12 = 864 extra every year. It adds up.

[@gailrodgers3079]

Absolutely round up for your mortgage and credit card bills if you have them.

[@ThirteenKidsLater]

Same here.

[@joethecomputerguy1]

I was 45 when I paid off my house and was debt free. I retired at 52.

[@solomongrundy9735]

I paid off my 15 year loan in 11 years by starting off paying an extra $400 per month. I stopped that after about 5 years, but it made a big difference doing that at the beginning to get the principal found ASAP.

[@rickdunn3883]

@Erin Talks Money Yes, mortgage and debt free is the best place to be heading into retirement. For most people, debt is not good for Retirement. Paying off early is also a good thing. "Money Doesn't Grow on Fees"

[@jasonmelancon8096]

Refinanced 3 yrs ago @2.7%. I’ve paid off $90,000 in 3 yrs. 3 more yrs I’m done and retiring. It hurts to pay as much as I pay but it’s paying off big time.

[@joec4278]

There is a lot of math that shows making extra payments on such a low rate is not the most lucrative thing to do with the extra money. The extra payments directed to an investment account have a strong potential to out earn the 2.7%.

[@user-eg2sj8lw1p]

My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?

[@JermaineW.Hoskins]

Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.

[@TerryN.Bologna]

How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.

[@JermaineW.Hoskins]

Deborah Lynn Dilling is the licensed advisor I use.Just research the name. You'd find necessary details to work with to set up an appointment

[@LoveFrank-cp7tv]

She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.

[@Fred2-123]

Dang, all these other comments are by robot/scammers. Anyway....this is the right way to do it. Invest the extra money, then when the investments are more than the remaining mortgage balance decide if you really want to cash in the investments and pay off the mortgage. When we got to that position, my wife said "Are you nuts?? Keep investing!"

[@tothra]

Thanks, Erin. To me, there is an argument for paying off your mortgage early that, realistically, no one should even try to argue against: Going into your retirement debt free as humanly possible. If you have 20 years of your mortgage left, but plan on retiring in 12 years, sit down with an online amortization calculator and figure out how much extra you should pay each monthly or yearly payment to enter retirement mortgage free

[@raiden031]

Or I could pay the minimum on my 2.65% rate mortgage and contribute more to investments that grow at 3-4 times that rate

I would argue against that. If you wait until retirement you can pay off the remaining mortgage with the retirement money. This leaves more money to invest in more risky investments while you’re young and uses the retirement money into something safe, i.e. paying off the mortgage.

[@MrDark21knight]

Save interest, keep mortgage payment in pocket.

[@lenaprice6239]

You covered this very well. I closed on my first home in 2022 and decided to make extra payments towards my 30 year fixed mortgage. The fixed interest rate is only 3%, but I have the extra cash, after maxing out my retirement accounts and putting aside a good chunk of money into my brokerage accounts... I pay around $600 extra towards the principal each month and I also make a payment of $2,000 every year towards the principal. I like the $5.00 idea and plan to add an extra $5.00 payment each month towards the principal, moving forward. :)

[@TheMatadore]

The tax deduction on a mortgage only applies to itemized filers. Most Americans take the standard deduction, so it’s moot.

[@Chris-gd5tj]

Great video! The real key to paying off your mortgage early is when you make the decision to buy a house. Take whatever figure the bank qualifies you for, multiply it by 40%, and then make that your cap if reasonable. You can then take a 15 or 20 yr mortgage and pay it off in 10 yrs. Also when comparing opportunity cost of otherwise investing, one needs to take into account likely taxes. Most people cannot deduct tax on mortgage interest but they will likely be taxed ~15 to 20% if they get a return on investing, which isn’t guaranteed so the potential 9% returns may really be 7% after taxes. Hedge your bets and make sure you are investing some in low cost index funds before paying off mortgage early.

[@timothyglassel1239]

A critical piece of knowledge that some people lack, is the understanding of the difference between amortized interest and simple interest. That understanding propelled my choice of paying off the mortgages that I used to have.

[@raiden031]

Amortized interest is simple interest

[@johnjeanette4317]

@@raiden031 Simple interest loans are those that are accepted at a certain interest percentage which is calculated over the life of the amount owed. Amortization is used when there is a set period of time in which the loan will be paid which allows for specifically calculated periodic payments

[@raiden031]

@@johnjeanette4317 but in amortized loans the interest is calculated using simple interest. It's either calculated daily or monthly based on the balance at the time. If you pay extra to principal the interest paid is reduced

[@Fred2-123]

You must have come over from some yoyo pushing Velocity Banking. There is no such thing as "amortized interest". Mortgages are simple interest. Monthly interest is Principal balance times interest rate/12.

[@grmark840]

Paid off mortgage by age 52, 15 yr in 8 yrs. Moved overseas as a Fed and kept/rented house, used extra cash to pay off big chunks of principle so that I could pay off home the month we got back from overseas. Am now almost 56, been real nice peace of mind not having a mortgage past 3 yrs. Debt free living is way to go!

[@kirklandphil]

Paid off the Mortgage years ago, Now if there was a way of paying off the property taxes!! Great information Erin.

[@ErinTalksMoney]

Haha! 🤣 if only!!

[@personofnointerest]

I mean, there kind of is? If you’re in a state with veterans benefits and you both served and meet the requirements. I can’t wait to own our house and be truly indebted to no one but me.

[@ramenandgyoza702]

Some loan servicer dont allow biweekly payments like ours. So what i did was take our monthly mortgage amount. Divided that by 12 then add that to our monthly mortgage payment towards principal 😀

[@personofnointerest]

You got one of them fancy VA loans too? 😂

[@CalicoCooperFan]

Another comprehensive video. I like being exposed to differrent ways of thinking and approaches to personal finance topics. Thanks, Erin. Have a great weekend. I hope you are enjoying motherhood.

[@MrEjohnston]

In 1999 interest rates were around 7%. We bought a house with a 30 year mortgage at 7.25%. Not a problem as we didn't bite at the much larger home loan that we qualified for, and 3 years later we were able to refinance at 4%.

[@shawnbrennan7526]

My favorite method: Print an amortization schedule. In month 1, pay for month 1 principle and interest, plus month 2 principle. (It isn’t much.) In month 3, pay for month 3 principle and interest, plus month 4 principle. Your payments get slightly larger each month, but you are (hopefully) getting little raises each year too. And you’ll finish a 30 year mortgage in 15 years.

[@Tsuter1978]

The idea of gradually increasing the payment is a good concept. Every little bit helps, and to do it incrementally makes it less impactful on your budget.

[@ld5714]

Hi Erin, good discussion on the various options available to everyone. I had my house paid off and then when I retired, I got a loan on it to build a shop for myself. I am paying it off early even though the rate is 4.25%. I also got a 10 yr construction loan from the Credit Union (share secured loan) at 2% to build a 1500 sq ft shop at my son's house 2 yrs ago. When my house is paid off again, I"ll use that money an apply monthly to the construction loan payments. I will have both loans paid off in 5 years. Have a great week Erin and keep up the good content. Larry, Central Valley, Ca.

[@RooseveltAnderson]

A strategy I've used is taking the interest earned from my emergency fund and putting that towards the principle every month. If you have a 12 month emergency, the amount going towards the principle could be significant.

[@brandon8531]

I would argue that you are losing the power of compounded interest!

[@chriscooper4989]

@@brandon8531might as well make that extra money work for you to negate the power of compounding interest for the banks!

[@tandumdrum91]

@@brandon8531 good point, but it depends on the interest rate. Even the high yield savings accounts at 5%, but if your mortgage is 7%, you have to crush that mortgage as quick as you're able.

[@UTBanjo]

I don't know too many people paying a $3000 mortgage can just come up with $1200 extra every month.

[@a.m.mitchell2067]

Exactly

[@rdgale2000]

Another great video! One other option I've heard about is to include the next month principle during the first few years of the mortgage. This is where most of the interest is generated. you may not be able to do it all the time, but It helps.

[@DKinKC1]

Hi Erin! We have three long-term debts (mortgage, home improvement loan, car loan), all less than 3%. With our rates so low, and cash earning more, we aren’t putting anything extra down, but plan to snowball our debt payments into the next when they get paid off. Car loan first, then home improvement loan, and finally mortgage. This will take 7 years.

[@ErinTalksMoney]

Solid plan!

[@shawnbrennan7526]

Just remember that you are paying taxes on the interest on your cash, so the gap may not be as much as you think. And be careful you don’t suddenly find an excuse not to pay off those loans early. Debt free has significant benefits. My $0.02.

[@rarelycares8416]

My original 30 yr home loan in 1999 was 7%, refinanced 4 years later for a 15 yr 4.8%. Paid that one off two years early by just applying bonuses or other surprise money to the principal when I could. Was done in 2016 before my son graduated high school, so I could apply my mortgage payment to college payments. He ended up going to a cheap state school so it was less than half of my mortgage payment, even for the year he lived in the dorm.

[@well-blazeredman6187]

Good video. That bi-weekly strategy was completely new to me. My strategy? Budget carefully and throw all free-cash at the mortgage repayment.

[@darylb5564]

She’s right about today’s rates. I’m guessing most people have about a 3% rate at a time where inflation is at 5%. I don’t see me being in a bi hurry to pay my house off in this environment. But you do you!

[@Fishfood007]

Great video and a simple way to put this is just like investing in your Roth IRA if you can max it out at the beginning of the year you will make more over time. If you pay as much as you can as fast as you can you will pay of your mortgage in the fastest way possible.

[@westbccoast]

Nice video ty. I do something similar I have monthly payments but I can make up to $110K in prepayment payments, I typically pay an extra $30-$40K a year on top of my mortgage payments. I have managed to pay off $240K in 5 years. I still have $495K to go, but just chipping away at it slowly. I am single, no dependents anymore, so I have more disposable cash to throw at the mortgage. I don't eat out or feel a need to take vacations, I can just focus on my main goal which is to retire without a mortgage. I am hoping to pay it off in 5-10 years from now to be mortgage free if I am able to keep my health and job. I am in the camp of paying off a mortgage for peace of mind, money isn't everything, I don't feel the need to invest every dollar and I still put 15% into my retirement account.

[@jar145022]

Don’t for get about taxes and insurance. I didn’t think about this when buying and it heavily changed things for me.

[@thomaschew2191]

Our current home is the second home we have owned. When we sold our first we had a decent amount to put down and we didn't go hog wild either. Our mortgage was a 15 year at 7.8% fixed. From the get-go we rounded up to the next 100 dollars then added another one hundred. On average this was about a $130/month extra. The result was that with this and a few extra full payments we paid off our home in 12 years. This was basically pain free may I add. As soon as we paid it off we went all in paid off all of our other debt and now we have an insane amount to put into retirement and savings. I know the idea of paying off a mortgage early is not for everyone but for me it removes some of the "fog of debt" that clouds our thinking on other money matters.

[@danielponder690]

Great video as always. I made amortization tables and ran scenarios for different extra payments etc. I am doing a little towards curtailment and my current plan if possible is just do one extra payment to principal a year per my family’s advice - one aunt who worked in real estate and one who is a CPA.

[@tonyasanders7523]

This is also my strategy.

[@jessegreen2020]

Absolute great video. Randomly came across it and glad I did. Amazing break down with actual current rates. Great job.

[@ErinTalksMoney]

Awesome, thank you! 😊

[@mrjuvy49]

We have a 15yr mortgage. We make a " Santa Clause" payment in December of 19K from selling stock that came from a rental house in 2018. This keeps us motivated.

[@tacrewgirl]

This is great info and I'm sharing it with everyone.

[@pepster60]

Hi Erin, great info as always. What I do is round my mortgage payment up to the nearest $100. So if my mortgage is $2216 a month, I pay $2300. And applying the overage to my principle. Having said that, we have a 15 year 1.99% fixed rate. It is hard to justify paying the whole mortgage off when I can get ~5% on CDs. But it would be nice not to have any debt sooner rather than later. Thanks for all your great videos! Mike I

[@ErinTalksMoney]

Man, a 1.99% interest-rate. That’s amazing!

[@loborocket]

I am lucky enough to have a low interest rate on my mortgage ~3% so it just did not make sense to pay off early. I could get better returns on the money in other places. Now as I get close to retirement, I am thinking about paying off a bit early just for piece of mind. What I think I am going to do in the coming years is take my "extra" $ and put it in a reasonably conservative investment account banking up the ability to pay off the mortgage if I wanted to, but playing it out if I don't. I think doing it this way I will be able to pay off about 8 yrs early with the account if I want to, but might keep paying the mortgage if it is not cutting into spending in other areas once retired.

[@athrowfor5575]

Our final payment will be August 1. It was our goal to finish in under 6 years (5 years + 2 months)

[@j.j.lanblaster42390]

So, me and my family built a house, moved in (August 21'), and started the first payment in October of 21'. The house cost around 310,000 out the door to build and with the sale of my old house I got our starting mortgage down to $200,000. I have a 3.125%. My house payment is around $870 if i'm not mistaken. I have been putting an extra $300 a month towards principal from the start and the math I did is that we should have the house paid for in around 20 years. Hopefully my math is right. I would like to put more each month towards the principal but they are killing me (and everyone else!) with land taxes, home owners insurance, vehicle insurance.......groceries......so, that's all I can afford. All you can do is throw whatever you have towards your mortgage and in the long run you'll be glad you did. Thanks for the video! Very smart and encouraging information!

[@ronmexico6790]

I've read that if you're interest rate is less than the inflation rate, don't pay down extra. That's probably the situation many people who refinanced after covid find themselves in

[@toddbarrera375]

I get paid weekly and my bank doesn’t allow partial payments so every four weeks I make a full payment. This way I make an extra payment every year. I may try the 10% or $1 idea to accelerate my payoff, since I’m retiring in 15 years and would like to have my house paid off by then.

[@SDCPA]

Originally had a 30 yr mortgage that we refinanced once and then made extra payments. Paid it off in Feb 2024 (took 9.5 years total to payoff). We prioritized saving for retirement 1st, then used extra for the mortgage. Could we have received a better return on our $ by investing? Probably. However the debt-free piece of mind is really something special.

[@TimIsThankful]

When someone buys a house, it's important to not necessarily be tempted to buy more house than you need. A bank may pre-approve you for a maximum amount, but that doesn't mean you need to borrow that much. Settling on a smaller home typically means smaller mortgage payments which in turn increases the likelihood of paying off a mortgage early.

[@alaazaki3943]

Thank you Erin 🌹

[@jimv77]

My wife and I paid off our 15 year mortgage after 7 years at age 33 back in 2010. Totally debt free since then. Amazing how we haven't paid ANYONE interest and kept every earned penny for the past ~14 years to invest.

[@lenaprice6239]

I regret not getting a 15 year mortgage, but I make extra payments, so my mortgage will be paid off very early. :)

[@jimv77]

@@lenaprice6239 As a young 25 year old signing that 15 year mortgage and getting the paperwork that shows the breakdown of how much each payment go towards interest and principle.....I clearly remember it was an eye opener low little went towards the principle...LOL.

[@ErinTalksMoney]

That’s awesome! Congratulations!!!

[@ricerocketrider4243]

I actually just did these calculations for myself yesterday. I’m currently 3 years into a 15yr fixed mortgage at 2.25%. I’ve been paying monthly the whole time. If I to start right now making half payments bi-weekly, it would shave off 14 months of payment and save me about $3000 in interest. However if I were instead to put the extra payment each year into an S&P index fund at 8% annual growth, it would generate $20,000 of interest income, $15,000 after the 24% income tax. So the opportunity cost is far greater to payoff my mortgage sooner. I would be losing $12,000 of potential earnings. Low interest rates really are a miracle.

[@chiplangowski3298]

This is one of those "Yes, but..." scenarios. The historical average return may be 8%, but what happens if you hit a year that has a loss of 20%, 30% or higher? The 2008 loss was 37%. If that repeated, it would take you almost 5 years of average returns just to get back to 0% gain. It is best to be diversified and understand all risks involved.

[@Fred2-123]

@@chiplangowski3298 One year does not matter. You need to look at the long-term average. The mortgage is 20-30 years, so you need to look at the 20-30 year returns in the market. Which average to about 10.5% annual.

[@chriskreider6259]

When my wife and I bought our house in 1991 interest rates were in the low 8% range. I made extra principal payments each month in the amount of the next months principal according to our ammortization schedule. My reasoning was that each extra payment I made shortened the loan by 1 month. We eventually refinanced for 7 yrs at 5% and then paid it off in 2013.

[@juniorco3109]

I actually refinanced my home loan from one company to another because they weren't applying a bi-weekly payment bi-weekly. They were just holding they money until the next bi-weekly payment came in, then making one monthly payment...

[@Fred2-123]

All standard FNMA mortgages are like that. The payment is applied at the end of the month, regardless of when you send a check. It's right there in the mortgage loan documents. (Which almost nobody bothers to read.)

[@cedricfleming8160]

Thank you for this.

[@RichardTouchfaith]

We bought a 1,300 square foot house as newlyweds and it was perfect for our lifestyle. It was literally the smallest in our HOA. We had to move and upgraded to a nicer 2,200 square foot house. Now that both kids are in college, we really don't even need 1/3 of our house (2 beds and 2 baths). Guess in summary, buy a house that serves your purpose and can truly afford and pay off quickly.

[@ErinTalksMoney]

Your last sentence, chef’s kiss!!

[@MichGoBIue]

Even though we have a low interest rate, we want the mortgage to be paid off by retirement. So making 2x the mortgage payment now.

[@ErinTalksMoney]

I love the idea of going into retirement without a mortgage! It greatly reduces how much you actually need to fund your retirement.

[@jlo64578]

Thank you again Erin!

[@ErinTalksMoney]

Thanks for watching!

[@MyLady22]

I just bought a home in this very bad expensive market. I haven’t made the first payment yet but I am so excited to knock this mortgage out of the park! I am pumped! I am ready! I got the mortgage under my name with just my income but my bf is helping with the payments too. I am getting a raise and he is also getting a very large raise so we are ready! Our goal is 5-10 years. My aunt said she will be mortgage free after just 4 years as a single lady and that makes me feel like if she can do it in 4 years by herself then we definitely could do it at least in 5 years.

[@pdxmusl1510]

What im doing is putting my extra payments into an investment. My expected payoff in in 10-15 years. Which is a long enough time investing in an index fund. It should be safe. Im also putting my escrow in there instead of putting it in the loan. On down years ill pay escrow out of pocket. On up years ill pull escrow out of the fund. Which should just be capital gains based on when i withdrawal. Ill end up paying more interest. But... ill pay off my house 5 years earlier or more. Original time from was 15-20. Putting the escrow in there doesn't add a lot.. but.. after 10 years i should have 3x the escrow i need and continue to grow. By the time i retire that escrow fund will be self funded. Meaning i should be able to withdraw 2-4% and it be enough to pay escrow even approoximating future inflation. Allowing escrow to never be a factor for the remainder of my life. So far so good.

[@joe62845]

I've been adding $100 extra a month, but since my mortgage rate is 3.5% I've been investing most of my savings rather than putting more of it into my mortgage. I figured if I could shave off a few years it'd be nice.

[@paulmerriman3103]

I always round my balance off to the neatest $100 after each payment. Even more if I can afford to.

[@robertrodriguez3614]

Pay it off!! We did in 2018 and its still amazing!!!

[@ErinTalksMoney]

Congratulations!

[@boomergames8094]

For benefits like ACA and the FAFSA, mortgage debt/payment is not deducted from assets or income. So it is better to own a home than have the same amount of money.

[@christiansailor2880]

Thanks, Erin!

[@ErinTalksMoney]

You are so welcome!

[@Theo-B]

Bi-weekly payments will be held in escrow. Check with your lender before you start. Not all extra payments go to principal

[@JosephDickson]

I bought my home just before the Great Recession and just making payments was tough. As interest rates improved I refinanced and boosted my retirement investments to match.

[@bodyboost4U]

Great video, thank you

[@darylhaack7752]

Thanks for posting. In Canada we don't have any tax benefits for interest on personal mortgages. So that would not be a consideration. Nor do we have the fixed 30 year mortgages. I do like your thought process in just a little more can make a big difference. Cheers

[@Azel247]

9.5 years left on the mortgage. Tempted to just finish it off.

[@Chilliconcarnage]

My advice to anyone taking out a mortgage is to get familiar with your amortization schedule, an even better a calculator to make changes. Even a small amount, less than 10% can make a difference and make you feel good, particularly high interest rates.

[@julieg1052]

I am curious on your thoughts are about one of the few tax shelters we have left. What about when the interest write-offs reduce your tax base by a bracket or two? I just got hit with a $10K tax bill so I am looking to buy to offset that liability. I am not asking for accounting advice I have just yet heard a different viewpoint from paying down your mortgage quicker. Thank you!

[@tristonwebb7045]

20 year mtg at 3.25%. (Bought at age 23) No intention to pay off early

[@ember13dp]

Great ideas!!

[@tommyj7087]

I was one of those keeping the mortgage for the tax write off. After Trump's tax plan increased the Std deduction, I wasn't breaking that threshold, so paid it off. It FEELS great.

[@SpicyKimchi-]

I had 4.25% and was aggressively paying it down for 2 yrs, then I refi during covid to 2.75% and still paid extras until I got it down to 50% bc I know most of the interest is paid at the front end. With regular payments & a small lump at the end, I should be able to knock it out in another 5 yrs, making total payoff time 10 years.

[@ErinTalksMoney]

That’s so incredible!

[@sanguineel]

An analysis of combining the strategies would be interesting

[@ton12loc]

If you do the bi weekly method , do you specify any of it to principle only? Or is that just for paying extra money over your normal payment?

[@ParkDari]

We paid off our 10 year mortgage in two years and 11 months by living on Rice and beans we wanted our child to go to private school and knew we couldn’t swing that if we had a mortgage payment. It kills me that as fast as we paid it off, we still paid $10,000 in interest Because rates were 6 3/4 back then. Another trick that we still do to manage expenses is that we pre-pay our property taxes by 1/12th each month. I wish my city had an actual monthly prepayment plan, but I just have the bank Send a check every month.

[@mikebridges20]

Erin, we've had our mortgage paid off for almost 20 years, and one thing you should add to the list of reasons why to pay off a mortgage early is to get rid of the hassle of making those monthly payments.

[@eunicebernard3054]

Exactly

[@Fred2-123]

What hassle? Put your mortgage payment on auto-pay, just like your phone bill, gas/electric bill, etc.

[@eunicebernard3054]

@@Fred2-123 yes you're right

[@mikebridges20]

@@Fred2-123 So, you've never had: 1. The mortgage company sell your loan and then you have to change everything to follow 2. takes too much or too little out for escrow, then you have to fix it 3. never been late or just not paid insurance or taxes out of your escrow. I'm glad your experience has been so clean.

[@Fred2-123]

@@mikebridges20 1) Big deal. You've got plenty of time to change where the payment goes. 2) Big deal. The escrow is just the annual tax & insurance collected monthly. If they get it wrong they change the amount the next year. 3) Never been late--what does that mean? Me? Never. Them? Never have had that happen. Happened once to a neighbor, the lender paid the tax late. The lender had to make it right. Guess what happens if YOU pay the insurance or tax late! Frankly, it is simpler to pay a regular monthly amount than to come up with the entire amount once a year.

[@1175drh]

A great rule to follow if you have a 30yr loan at a higer rate. 6% or above. Make sure to invest 15% in retirement min. Before extra mortgage payments

[@kerim.peardon5551]

Something no one mentions when it comes to the "mortgage tax deduction" is that most people don't get a mortgage tax deduction. Most people do not itemize their taxes, and you don't get to claim mortgage interest as a result. I have never once been able to claim mortgage interest on my taxes.

[@catherinelocke141]

Is there a time of year when it is better to pay off a home mortgage?

[@VeyselYakup]

I drove my first car in my dad's name and later went to get a truck in mine after I paid off my first one and drove off the lot with the truck I wanted, its mostly about a good credit score and a loan portfolio helps as well...lenders like to see various forms of loans in your name to be less of a risk and yes you might have to put money down but not HALF of the car loan Your exactly right I screwed my credit as a young man now I own a detailing company and can't get anything with out the full a

[@duanejahn2368]

I have a 30 yr. mortgage at 2.25% interest. I'm currently making over 5% interest with 6 month t-bills. In 2 years, I could payoff my mortgage, BUT, why would I? If I sell the house, a 2.25% interest rate on an assumable loan could be attractive to a potential buyer. What do you think?

[@annaa.5863]

Great video Erin! New subscriber here, tfs.

[@ErinTalksMoney]

Thanks for subbing!

[@hedgefund996]

Good Educational Content

[@ErinTalksMoney]

thank you!

[@sheldoncooper0]

you're a new channel and i thought you'd just be redundant. But Im enjoying your presentation strategy. You're not click bait/fashy/cartoonish like the Stefan Grahams, yet you're not monotonous/tone deaf/boring/academic like Ben Felix. You're smack in between and it's a nice and pleasant listen when watching your content.

[@ErinTalksMoney]

Thank you so much. I really appreciate that! Also, importantly, welcome to the channel!! 😁

[@MrDark21knight]

I've started overpaying my mortgage, 12 years left. I want to payoff in two years. Triple payments

[@larryly3613]

Yes flexing here haha. But I paid off my mortgage 25 years before I am even eligible to retire. Peace of mind is a big thing. Financially smart? Definitely not! I could've easily made more by just socking the money to treasury and still make money after taxes, but like most things in life, the decision is not logical or rational. 😂

[@jsimp4050]

Please listen to the part where she said the additional payments, all examples, should be paid on “principal only.” That matters. Otherwise none of this will help you. Any extra money we had we paid on the principal only. We paid off in 14 years. Our first int rate was 8.625 in the late 90s. When rates dropped we did refi which helped a lot.

[@ErinTalksMoney]

Huge point!

[@my20163]

I don't understand, and no one talks about the role taxes and insurance has in making principal payments. Even after the home is paid off, you will still have to pay taxes and insurance. I currently am already paying my insurance myself. So what role do taxes and insurance have in figuring out how much you have to pay in principal payments to reach a particular goal? Or am I overthinking this?

[@Victic005]

I would refinance with those rates. I got a 3.5% on mine. I put my extra money into the S&P 500.

[@desiv1170]

I like those options... We went with a 15 year. I realize now that with the flexibility and interest rates, it wasn't mathematically the best call, but I do have to admit that having a paid off house take SO much stress off... So I don't regret it. But had I known then what I know now, I might not have chosen that... Maybe still tho, as it was a good way for me to force myself to do that. ;-)

[@ErinTalksMoney]

Having a paid off home is invaluable 😁

[@SinanCuneyt]

Great work Cynext solution so glad you are out there fighting these lowlifes. We need to do all we can to spare the elderly and the general public from these despicable scammers! Kudos to YOU!! You deserve the Nobel prize for keeping us safe big up brother.

[@personofnointerest]

I like looking at my extra principal payments and seeing how many months they shave off. Not all loans allow for biweekly payments, for example. So I make my regular payment and see my remaining loan term drop a month. And then make my additional to bring it to the next whole one thousandth number (because I’m psycho like that and like seeing zeros). And in doing that, I usually see my remaining loan term drop another month, sometimes two. So, we’ve had our mortgage 19mos now and by making an additional $500-700/mo we have shaved 35 months plus the 19 months. By the end of this year (2yrs on loan) we will have paid down 5yrs. I view paying down my mortgage as a savings account. In a way. lol treating my 30 like it’s a 15, but wiggle room in case shit ever hits the fan. We can always ask to skip a month.

[@thisIsAndyOK]

Any thoughts on investing extra money in an index fund, then paying off the mortgage with a lump sum, instead of making extra principal payments?

[@BrutusHostiliusMaximus]

Market volatility

[@Fred2-123]

@thisIsAndyOK This is the safest and best way to do it.

[@donutdomination139]

We just wrote a big check. Done.

[@markwilkins1544]

Hi Erin, great video. I pay $100-$200 extra towards the principal every month on my mortgage and it’s been working very nicely. Do you and your husband have a system of paying your mortgage off early? If so, would you mind sharing?

[@ErinTalksMoney]

That sounds like a great strategy for paying off that mortgage early! We are actually going to be selling our home, so there’s no need to pay it off early. However, one day there will be another home, and the intent will be to pay that one off early. And at that time, I’ll do a video on that one. 😊

[@markwilkins1544]

@@ErinTalksMoneyThat makes sense. And after having watched all of your videos, you are an amazing financial expert, and yes, I mean expert. Thank you for all you do 😊 Have a blessed weekend 🙏

[@kenyonbissett3512]

Make sure your mortgage company will allow you to make 1/2 payments. Mine did not!

[@Fred2-123]

@kenyonbissett3512 No standard lender will. They compute and apply the payment at the end of the month, regardless of when you make the payment.

[@whitleyca]

Hi Erin - love your channel, but I must be missing something on this topic. The 'dollar-a-month' raised my eyebrow, so I built out an amort schedule: $300k, 30 years, 7%. Pmt calc = $1,996, bal = $0 at 360 months. So far so good. Then layered in $5/month applied to principal and show payoff at ~357 months, or 3 months early. Might you highlight my error?

[@hjsn1]

It might be hard to find an amortization calculator that lets you input this. The first month, you add $1. Second month, you add $2. Third month, you add $3. The $5 extra per month is the same, except you add $5 for the first month, $10 for the second month, $15 for the third month. It would definitely add up and ease you into paying a little extra every month. At the end of just one year, with $1 extra per month, you're paying $12 extra but that keeps going up and you hardly notice it. After a year of paying an extra $5, you're paying $60 extra that month. Edit: looked up a calculator and that's the issue you're having. Same inputs at $5 per month takes it down to 357 payments.