For most Americans, our biggest expense every month is the dreaded mortgage payment. Have you ever thought about what your life could be like if you had no mortgage? Perhaps you could take more family vacations, pay off additional debt, or even accelerate your investing strategy.
Most people think that paying off their mortgage is unrealistic. Aside from coming up with a huge amount of money, the only other option seems to be chipping away at that monthly payment for years and years.
Except there’s a third option, and it’s one you won’t hear about from your banker or financial advisor. Recently, Clayton was interviewed on BoldTV to discuss this strategy.
Using a HELOC, or home equity line of credit, to pay off your mortgage is a way to create equity in your primary home. Doing so allows you to pay down your balance quickly. More importantly, it allows us to leverage our funds in order to purchase cash flowing real estate.
The reason this works is because the loan on your house is amortized, meaning the value of the home is gradually paid off. Typically on a mortgage, you’re paying off the interest for the first years of the loan. Principle is not paid off until later.
But if you’re able to put a large amount of funds from a HELOC toward your mortgage, you can designate that money to go specifically toward your principle balance. Then going forward, a larger percentage of your monthly payment can be applied toward principle, instead of primarily interest.
Traditionally, you would pay off your mortgage in 15-30 years, but with enough discipline, this system allows you to do so in 5 years or less. Natali and I have utilized this strategy, and it works! We’re so excited to share that the 2018 edition of our book, How to Pay Off Your Mortgage in 5 Years, is now available to order on Amazon!
The new version includes several updates and tons of new content–including how the 2018 tax code can help you pay off your mortgage even faster! Pick up your copy here! We can’t wait to hear about how you paid off your mortgage in record time!
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