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How to Pay Off Your Mortgage Early in 5-7 years! Using an Amortization Schedule! - YouTube
Channel: PropheticFrequency
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Hi guys!
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It's Natalie from CleanCutCouponing.com.
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I have something super, duper important to
talk to you today about.
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I have been meaning to make this video forever.
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I even got a sharpie that's how serious it
is.
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We are going to be talking about an Amortization
Schedule and how you can pay off your mortgage
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super, duper, duper early.
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So let's go!
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If you have a mortgage you know that you are
going to be paying principle.
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You are going to be paying interest.
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You pay for your taxes each month.
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Ok.
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This mortgage payment is probably your largest
payment.
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This is where you can save probably the biggest.
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Groceries is a huge place that you can save
but your mortgage definitely you want to save
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here.
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First off what is an Amortization Schedule?
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So basically what this is when anytime you
have a loan this will break up your interest,
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your balance, your principle and it puts it
into a graph, an excel chart.
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However you want to do it.
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You can find your Amortization Schedule by
calling your bank or how I did was going online
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and you can print it off there.
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What you would want to do is most likely go
into the loan information tab online, account
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information or something like that.
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Click around and your schedule should be on
there.
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If you do not have access online to your Amortization
Schedule give your mortgage company a call
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and they will give it to you most definitely.
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They will send it to you.
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They might charge you.
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Maybe not.
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This is just a professional chart that I drew
up for you guys.
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How professional.
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But any I wanted to talk you I wanted to do
this video for quite sometime and I just kept
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putting it off, putting it off and this is
very important because your mortgage if you
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have one is one of your largest debts but
its a big equity too.
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Right!
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I look at our home as our savings account.
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But really its not your savings account until
you pay it off.
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So if you think about that if I paid my mortgage
all the way down to the dollar and just had
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a dollar left its still not my home.
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It's not my home until I pay that last dollar
off.
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So keep that in mind.
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That is something to think about.
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Let that toss around your head.
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A real quick history too.
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My grandparents had their homes paid off.
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Things like that.
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My Dad's side and my Mom's Mom.
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I seen them be able to live comfortably and
not have to really worry about anything.
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That was always a goal, a motivator like Wow
that is amazing!
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Paying it off early.
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I could watch my GrandFather this was amazing.
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So he paid him homes off very early.
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When I was a little girl we would go to the
bank if he was going to go get a brand new
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car I loved going with him because he would
go to the bank, pull out the cash he needed
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to buy the car.
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Go buy the car.
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Pay for it with cash and everytime he would
be driving on the way home he would say to
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me this is how you should live.
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This is how you should live because you don't
want to owe anybody anything.
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That always stuck with me ya know like I would
think ok so as a young adult I would think
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well he was rich so that's why he could do
that.
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But he became well off by saving, by paying
things off and by not owing people debt and
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you can too!
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Even if you are in a bad place right now.
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You are not going to be there forever.
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Guys, don't think you are going to be there
forever.
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Mike and I?
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Mike and I we have been through some stuff.
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Oh my gosh!
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We had credit card debt.
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I would always want a new car.
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Ya know so we had to pay on a car loan.
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We don't have any car loans right now.
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Everything is paid.
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Our goal now is to pay our mortgage down.
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When you get there the first thing you want
to do is go for your debt.
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Don't have any debt.
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Ok.
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It's good to keep a credit card for your ya
know if you need like something for crazy
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emergency, a water heater or whatever broke
in your home or your car.
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That's ok.
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It's better to have a savings account though
so until you have that savings account keep
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a credit card ya know.
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Try not to max it out or anything like that.
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If you are not at that place yet its ok.
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Don't even worry about it.
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Alright so Amortization Schedule.
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This is how you are going to pay your mortgage
off way early.
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So when you get a mortgage typically the bank
will give you a 30 year mortgage, 20 year
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mortgage, something like that.
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You'll have an interest rate.
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A good rate is between 2.5 to 3 percent.
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4 is ok.
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Try to keep it below that though and around
there.
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You don't want to go higher then that because
if you have a $200,000 loan and you are paying
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5, 6, 7% that is a lot of money.
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I don't recommend that you do a refinance
either.
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Unless you are doing to just get that rate
way lower and you know several numbers lower
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not just one number or something like that.
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Ya know because when you do a refinance you
are resetting your mortgage.
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You are resetting your Amortization Schedule.
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So let's say you had already lived in your
home for ten years and you are just seeing
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this video now and you are like wow I should
get a better interest rate.
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Then you do that you have just reset your
loan again and most likely it went into a
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30 year and now you are paying more interest.
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Unless you are refinancing to get a 15 year
mortgage loan or something like that and a
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lower interest rate but other then that typically
don't recommend refinancing.
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Let's say you have a 5% interest so I'm going
on the high end.
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So lets' say you have 5% interest rate and
your loan is for two hundred thousand dollars.
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This column here is your payment amount.
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So you have five payments you are going to
probably have three hundred or three hundred
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sixty.
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For this loan there would be three hundred
and sixty payments.
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This is when you would have it paid off.
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2048!
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That is by making no extra payments and you
wouldn't be utilizing everything that I'm
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about to talk about.
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Now if you utilize what I'm about to talk
about you can pay your loan off really, really
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quick.
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You have a two hundred thousand dollar mortgage
loan.
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Your payment is $1073 per month.
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Your interest that you are paying monthly
is $833 guys.
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That's insane!
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The principle.
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So you would be paying towards the principle
of the loan amount which is right here.
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$240.
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You are making $833 interest payments.
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That's crazy!
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Right!
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If you want to make an extra mortgage payment
or an extra principle payment this is how
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much you need to pay to make that extra mortgage
payment.
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Ok so you would need to pay $240 for one extra
mortgage payment.
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What that does then is remember how I said
we have three hundred and sixty mortgage payments?
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Instead of having three hundred and sixty
now you are down to three hundred and fifty-nine.
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By paying one principal payment you are now
down to three hundred and fifty-nine payments.
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So you would be paying your monthly payment
of $1073.
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You have to pay that and then you'd be paying
an extra mortgage payment of $240.
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This goes towards your principal amount and
now you are down to mortgage payments and
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you are going to lower your time that you
would have this paid off.
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Instead of the year 2048 you would be paying
this much earlier.
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If you can make just one mortgage payment
extra a month.
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What my husband and I are doing is no less
then four mortgage payments a month.
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Ok.
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We're doing four mortgage payments a month.
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Again if you are not there and you can't do
that don't even worry about it.
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Just you'll get there.
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He works extra.
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I work extra.
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So we just work.
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We also enjoy life too.
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We are not to the point where we are like
super, duper strict ya know if you've ever
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heard of Dave Ramsey.
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He's awesome.
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He'll definitely you can get a lot of his
courses for free online and on YouTube.
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But yeah he gives a lot of good information.
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Buy anyway mortgage.
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Back to that.
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By making these regular mortgage payments
every single month what happens is here with
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your Amortization Schedule when you print
it out and look at it your interest does go
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down.
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So see its $833 and then its eight thirty
two, eight thirty one, eight thirty, eight
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twenty nine.
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So your interest is going down every single
month and then your principal balance that
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goes towards your principal each does go up
a little bit too.
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So we started at a two hundred forty dollar
principle payment now its two forty one, two
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forty two, two forty three.
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So see but again take a look at that interest
like that interest is crazy!
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So if you can make a payment.
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Just one extra per month and not pay on that
interest that is amazing.
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If you didn't make any extra payments and
you took this loan out today 2048 is when
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you would have this paid off.
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For a two hundred thousand dollar loan that
is crazy.
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Ya know I want to take I want to take the
money that I have and I want it to go to good
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use.
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I don't want to pay interest and by the way
that interest that you would be paying is
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a hundred and eighty five thousand dollars
in interest.
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That's another whole mortgage.
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If you paid this and didn't make any extra
payments you would pay a hundred and eighty
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five thousand dollars in interest that is
insane.
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So yeah we are definitely all about making
extra payments and just trying to knock this
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out.
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If you guys have any questions please leave
them down in the comments section below.
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If you have any money saving tips leave them
in the comments section below.
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We love seeing that.
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Anybody loves seeing that.
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How you guys save money.
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Where do you cut corners and again I have
so many different budgeting tips that I have.
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I've put out several budgeting videos on this
channel.
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I will leave them all linked down in the description
box.
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So you can go ahead and and view them.
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And I've also put out videos on my other channel
as well, CleanCut Hacks.
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So those videos leave linked down below as
well.
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If you are not yet part of team CleanCut you
need to hit that subscribe button down below,
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ding the notification bell so you are notified
every single time I post a budget saving video
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to help you stay on track.
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I hop you guys have a great day and take care!
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