Don't Burn the Mortgage
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Uploaded by AmericanPublicMedia on Aug 29, 2008
Wondering whether to use discretionary funds to pay down your mortgage? Chris Farrell has a few words of caution.
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This guy is giving horrible advice. The question concerning discressionary money. This is money you have after all bills, investment, and the like are taken care of. If your mortgage is 6%, you need a hell of a lot higher rate of return in the market to produce the same results. If you can, payoff your house with a 401K loan if the loan interest is lower than you mortgage interest and you can take out that size of loan. You may have the same payment but pay yourself not a bank interest.
Robbob9933 4 months ago
@jgposner I think if you don't let them know that it is a principle payment it will be like you just paid early 1 month.
Ex: mortgage payment is $500 a month with 6% interest. You pay $500 and an extra $100 towards principle. It means the $500 has interest but anything extra towards principle has 0% interest. If you pay $500 and then an extra $500 but not as a principle payment, you just paid an extra payment or early payment (includes interest).
I believe that is the way it works.
parkfun101 1 year ago
Why should you treat your home as an asset in a broad portfolio? Why not treat it as the place where you live?
procrustesuk 2 years ago
An emergency fund is first. A house is different than financial assets. You live in it. You generally buy and hold a house for different reasons why than stocks. There is no risk in paying down a mortgage because the decision to own is independent to financing it.
Basically, you need to see if you can get a better rate of return on something else. If you cannot then use the money to pay down the house.
I won't pay down my house at 4.5% but I will rental property at 6%.
jgposner 2 years ago
So you will be a month ahead, and the next year you will be two months ahead, and the next three months. Sounds absurd but I guess it makes sense.
jgposner 2 years ago
they can treat as a prepayment of the next monthly payment
jpkm123 2 years ago
Why do you have to tell the bank that your 13th payment goes toward principal? How else could they apply it? Maybe they might think it's a birthday present? They can't just keep it, right?
jgposner 2 years ago
akhhhh
machekharak sharam nadare,
bekhe abroe ma dukhatarae hazara ra borde sag sefat,da gerem beye ba khodata zenda nmemanomet
3465675 3 years ago