15 or 30 Year Mortgage: Startling Facts About Paying Off Your Mortgage

15 or 30 Year Mortgage: Startling Facts About Paying Off Your Mortgage. PSA: Why you SHOULDN’T get a 15-year Mortgage

15 or 30 Year Mortgage: Startling Facts About Paying Off Your Mortgage video duration 5 Minute(s) 58 Second(s), published by The Money Advantage on 20 06 2019 - 19:00:02.

Startling Facts About Paying Off Your Mortgage How do you choose the best mortgage? https://themoneyadvantage.com Partial Transcript - Well, this is kind of a If there is a specific topic you would like me to cover please reach out at jkolinsky@kolinskywealth.com
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Buying a home is a huge decision, and one of the biggest choices is deciding between a 15-year mortgage and a 30-year mortgage
With a 15-year mortgage, 15-Year Fixed-Rate Versus 30 Year Fixed-Rate Mortgage Comparisons Of the two mortgage term options is the 15-year fixed rate mortgage or 30-year fixed rate Here's why I don't recommend getting a 15 year mortgage vs a 30 year mortgage, and how taking out a longer term loan could leave you with WAY more .

Startling Facts About Paying Off Your Mortgage

How do you choose the best mortgage?
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Partial Transcript -

Well, this is kind of a loaded question, and I'm totally aware of the controversy between a 15 year mortgage or 30 year mortgage.

I get it. You want to pay the least amount of interest, you probably want to be in debt the shortest length of time possible, and you want to be in a position of cash flow and control.

You may not realize that those objectives are competing.

I want to help you understand how to make the best decision financially, and I also want to put in a disclaimer, no matter what the math says, if you have an emotion that leads you to make a certain decision, so that you have peace of mind, you are going to want to go with your gut.

The first thing that people do that is focusing on the wrong thing is looking at interest rate alone.

The interest rate is kind of funny because it's actually used by the banking and financial industry to lead you to the decision that makes the most sense for them.

If you have a lower interest rate, you're going to have less dollars going out in interest. It sounds like a great decision to go with something that has a lower interest rate, which usually would then lead us to a shorter mortgage because 15-year mortgages have smaller interest rates than 30-year mortgages.

If you look at the volume of dollars each month that you are paying to the mortgage company, you'll realize that you have more dollars flow out of your hands, and more cash flow into the control of the mortgage company.

Another thing that people look at over the long haul is the total volume of interest they are paying?

This can be misleading because your today dollars are more valuable than tomorrow's dollars.

What do I mean by that?

If we look at the impact of inflation, it erodes the purchasing power of your dollars. I mean, think back to Little House on the Prairie, and they got two pennies for Christmas, and they could use that to spend on multiple pieces of candy.

It's not the same today and the reason is because of inflation, meaning that if you have a mortgage payment of $3000 per month today, 30 years from now, that mortgage payment's gonna feel like a whole lot less money, and it's going to have purchasing power that will equivalate to less in your personal life.

Now, the bank and the financial industry knows this just as well as you do, and they know that having dollars flow into their control today is more valuable than dollars in the future, so they would rather you make the biggest payments possible today.

Here's how I would look at the entire mortgage question to put you in the position of maximum cash flow and control.

Find out how to get the smallest payments.

When you have lower expenses, you're in a position where you're keeping more of your dollars. When you keep more of your dollars, that means you have more money to put to work to create time and money freedom.

You have more to save, and more to invest in cash flowing assets.

Remember, you're not in debt if you own more than you owe. That is something that most people fail to understand, and they feel that just because they have a mortgage, it means they're in debt.

It's not true that you're in debt, just because you have a liability or a loan. You're only in debt if you have negative net worth, meaning you have more liabilities than assets.

The other thing to look at is what is the best stewardship of your dollars, meaning this, where can you get the highest return on your investment?

Your house is not the best place to store your cash.

First of all, it's a major lifestyle expense. It's not an investment.

Money put into the four walls of the house has the potential to fluctuate up and down in value and just because you have a paid-off mortgage, doesn't mean your house will appreciate faster.

That means your rate of return inside your house has nothing to do with whether you have it paid off or whether you have a mortgage.

So use that to consider how to have the smallest payment by having the longest mortgage, even if that is a higher interest rate and even yes, if you pay more dollars in interest overall.

What you want to focus on is having the most dollars in your control today.

That allows you then to put that money into savings and investments that create cash flow for you and build time and money freedom much more quickly.

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