Hey, what's up welcome back to a new video Shawn's, a name, and today I am actually starting my parents refinance. Why does this matter? While I was eating some grub with the old parentals one night and they were telling me how fed up they are with paying their mortgage payment and they wish it would just go away, don't we all right? Well, I then explained to them how they can pay their home off in half the amount of time, and no. This is not a HELOC or any type of special loan program, or anything like that. If you want to learn about what HELOC is in a special loan program that will take your home mortgage from a third year down to like a five to seven year mortgage, you can watch that video link down below, but what I'm gon na be telling you About today is just a strategy: a payment strategy to take your home loan from a third year down to a 15 year or to take a 15 year loan into like an 8 year loan.

This is my proven payment strategy for getting out of your mortgage. In half the time, all right, so, first of all, it's important to note that I'm actually telling my parents Eunice my parents, so you know that it's legit and I actually do this payment strategy on my own mortgage. Here's the strategy you press the like button on this video and you'll get your payoff letter in the mail just playing around guys. If you don't know, I am a mortgage lender in Arizona.

So I get this question a but jillion times from everyone saying: what's the quickest way to pay off my mortgage, so I figured today, let's make a video on it. Now I'm also refinancing my parents into a 15 year mortgage. It is not necessary to be in a 15 year mortgage for this. For today's example, I'm actually going to be using a 30 year mortgage example, because that's what most people have, including myself and I figured it'd just be a lot easier to explain it.

That way. Oh and if you're wondering, if a 15 year mortgage or a 30 year mortgage is right for you then check the link in the description. I've made a very detailed and awesome video on the pros and cons of a 15 year versus a 30 year. But, okay, here's a strategy all right: let's take an average loan amount of $ 250,000 and we'll say an interest rate of about four point: one percent for a 30-year term paid monthly.

Okay. That makes your monthly mortgage payment about $ 1200 ish. You know excluding taxes and insurance, so if you started making payments on January 1, 2019 you'd pay this sucker off on 12. 1.

2048. That's super depressing! Now most people do this lazy strategy of pain, one extra payment a year, which is good because it makes the graph look like this, and it makes your last payment on 10, 1. 2044. Okay.

So it's about 4 years sooner, not bad, but we're gon na. Take this a few steps further, if you change your mortgage payment interval to bi-weekly payments instead of monthly payments right, so you're paying twice a month now, but the amount that you're actually paying is the exact same. So, instead of $ 1200, once a month, you're now paying $ 600 twice a month, and if you do that, your last payment will be on 10. 20:44.

Hmm, that's the same date as if we were to make one extra payment a year, which is essentially happening because we're saving about $ 30,000 in interest payments right. So when you pay a loan off bi-weekly, instead of monthly the amount of principal that you're paying on that loan is going down at a quicker rate. And while you are saving just a tiny bit in interest payments, it adds up a ton week after week after week after week, over the course of that loan. So let's combine the two all right.

If you make bi-weekly mortgage payments and make two extra payments a year, remember it's two payments of $ 600, so it's still only $ 1200 a year, aka the same as previously right, so you're now paying your mortgage off on 10. 120. 40. That's eight years! Sooner than your original 30-year mortgage, but wait there's more.

The last piece to the puzzle is to actually round up now. It is incredibly rare all the mortgages as I've been doing all the estimates. All the quotes, everything that I've been doing incredibly rare, to see a mortgage payment rounded out incredibly - or I don't think I've seen one yet so in this example that we use right. We use $ 1,200, but the math on it actually makes the mortgage payment.

A thousand two hundred and eight dollars, so my personal strategy is to round that number of depending on how your month went. So if you didn't spend a whole lot of money that month and let's say, you're saving and banking a little bit more than usual, you had a light month on expenses. Then I would say why don't we just make a payment of $ 1,300? We rounded all the way up to 1300 or a lot of people will say. Well, I don't know I can't save that much.

That's fine, maybe just make a payment of $ 1,250 or just do 1225. I mean you can always round up the point. Is you just want to pay something just pay something extra? This is huge. I am Telling You this is huge if you spend a little bit more on your mortgage payment, because if you paid $ 1 extra on the very first payment you made during your mortgage over the course of your loan, you would have saved $ 2 and 39 Cents, that's more than what you paid at the beginning of the loan, because you're saving so much money in interest by doing that.

So if you're thinking about moving some money around or maybe keeping some money in a practically 0 %, yielding savings account think twice about it by making one extra payment a year, changing your payments to bi-weekly and by also rounding up when you make your payments, I Guarantee you'll be paying your mortgage off in half the amount of time, I'm on track to do so now so are my parents, they're actually gon na, beat me to the finish line because they are now rocking a 15-year mortgage, while I'm just rockin a 30-year mortgage With all that being said, though, hopefully you learn something new. I see so many people talked about making one extra mortgage payment a year, but not a whole lot of people talk about bi-weekly payments and almost no one talks about rounding your payment up, because obviously we don't like to do those things. But I promise you it's gon na, be so worth it later down the road for you. If you did learn something new.

I would really appreciate if you can hit that like button on this video subscribe, if you're new around here and if you've got any questions or you want to see if a refinance makes sense for you and you're in the Arizona area. I'd love to help you out head on over to Lending Shaun Malka com. Oh and I guess, while I'm plugging everything you might as well go follow me on Instagram Twitter, Facebook all linked down below.