Paying off $372000 mortgage in 12 months

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broslami
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Paying off $372000 mortgage in 12 months

Post by broslami » Sun Feb 18, 2018 10:17 pm

Hello,

I've recently gotten the debt free bug and trying to reform my profligate ways.

I have $372,000 left on my mortgage.

I've set a goal of paying it off in 12 months. I have around $90k in cash after paying off my car. Assuming I put $50k into that to start, that would be about $30k per month to pay down mortgage.

While I don't really have a problem with debt per se, I like the concept of being debt free. So I decided to just go at it with gusto.

My question is thusly - what is the best way to go about paying off the loan? Should I pay minimums and save it all in a high yield savings account and then pay it off with gusto in one go? Or chop down the tree with aggressive payments each month?

Would it be more efficient/ cheaper if I pay it down...or is it best to accumulate cash in a high yield savings for flexibility in case I want to change course if say the market tanks or whatnot.

What's the best payoff strategy? Pay off in one lump at end, pay aggressively throughout, or a mix of both?

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Strayshot
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Re: Paying off $372000 mortgage in 12 months

Post by Strayshot » Sun Feb 18, 2018 10:24 pm

The mortgage rate is definitely higher than any high yield savings rate, so paying the mortgage is a better deal.

Are you saying you have an extra 30 grand of income a month you can pay towards the mortgage? If so, congrats on making a heck of a salary.........

chevca
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Re: Paying off $372000 mortgage in 12 months

Post by chevca » Mon Feb 19, 2018 8:40 am

Do you have $30k extra per month to throw at it? If so, wow!

If you got bit by the get-rid-of-debt bug, I assume that is because you don't want to pay someone else interest? If so, the sooner you can throw extra at it the better.

If you really have that kind of monthly income, I'd just pay it down as soon as you can. If you want to switch up the plan half way through, just stop throwing extra at the mortgage. You would still be able to grab up any opportunities pretty well with income like that.

JoeRetire
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Re: Paying off $372000 mortgage in 12 months

Post by JoeRetire » Mon Feb 19, 2018 8:46 am

broslami wrote:
Sun Feb 18, 2018 10:17 pm
What's the best payoff strategy? Pay off in one lump at end, pay aggressively throughout, or a mix of both?
For you it seems the best payoff strategy is to pay it off in one lump - today. That way you'll satisfy your debt-free bug quickest and gain the most gusto. If you can't do that, pay it off tomorrow, or as quickly as you can afford to.

I wouldn't do that, but then I'm not mortgage-averse.

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Toons
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Re: Paying off $372000 mortgage in 12 months

Post by Toons » Mon Feb 19, 2018 9:30 am

Pay Off Aggressively.
Laser Like Focus....
Kudos To You :sharebeer
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Gill
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Re: Paying off $372000 mortgage in 12 months

Post by Gill » Mon Feb 19, 2018 10:19 am

You've really changed your tune. Here's what you said in December:

"Psychologically debt doesn't really bother me at all. Especially if it's generating positive cash flow."

Gill

an_asker
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Re: Paying off $372000 mortgage in 12 months

Post by an_asker » Mon Feb 19, 2018 10:23 am

Gill wrote:
Mon Feb 19, 2018 10:19 am
You've really changed your tune. Here's what you said in December:

"Psychologically debt doesn't really bother me at all. Especially if it's generating positive cash flow."

Gill
With an income like that, OP is free to think what he/she wants and do what he/she wants as well. Though I didn't read that December post, I wonder what caused the about face!! :oops:

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Re: Paying off $372000 mortgage in 12 months

Post by Gill » Mon Feb 19, 2018 10:28 am

an_asker wrote:
Mon Feb 19, 2018 10:23 am
Gill wrote:
Mon Feb 19, 2018 10:19 am
You've really changed your tune. Here's what you said in December:

"Psychologically debt doesn't really bother me at all. Especially if it's generating positive cash flow."

Gill
With an income like that, OP is free to think what he/she wants and do what he/she wants as well. Though I didn't read that December post, I wonder what caused the about face!! :oops:
Also said his income was $325K. Not sure how he can make monthly payments of $30,000 on that income.
Gill

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Re: Paying off $372000 mortgage in 12 months

Post by Jack FFR1846 » Mon Feb 19, 2018 10:39 am

Gill wrote:
Mon Feb 19, 2018 10:28 am

Also said his income was $325K. Not sure how he can make monthly payments of $30,000 on that income.
Gill
I would assume some bonus, windfall, lawsuit win, inheritance, sale of a few pounds of gold figure into this. I can say that when I sold stock options one year and made a boatload of money, that mortgage was the first thing to go for me. One lump sum.....gone.
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Kitty Telltales
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Re: Paying off $372000 mortgage in 12 months

Post by Kitty Telltales » Mon Feb 19, 2018 10:42 am

I’ve had a few mortgages in my life and paid off each one in less than 4 years, like a car loan. I always felt a sense a financial freedom to make new choices each time. I upgraded 3 times and downsized the last. Now going into retirement mortgage free in a house I love.

an_asker
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Re: Paying off $372000 mortgage in 12 months

Post by an_asker » Mon Feb 19, 2018 10:57 am

Gill wrote:
Mon Feb 19, 2018 10:28 am
an_asker wrote:
Mon Feb 19, 2018 10:23 am
Gill wrote:
Mon Feb 19, 2018 10:19 am
You've really changed your tune. Here's what you said in December:

"Psychologically debt doesn't really bother me at all. Especially if it's generating positive cash flow."

Gill
With an income like that, OP is free to think what he/she wants and do what he/she wants as well. Though I didn't read that December post, I wonder what caused the about face!! :oops:
Also said his income was $325K. Not sure how he can make monthly payments of $30,000 on that income.
Gill
Same difference. Either way, I think OP should be advising me, not the other way around ;-)

veindoc
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Re: Paying off $372000 mortgage in 12 months

Post by veindoc » Mon Feb 19, 2018 12:34 pm

Since your time frame to pay it off is short, pay off the whole thing now or as quickly as you can in huge lump sum payments.

If you decide to give yourself five years to pay it off, I would take the money invest it and when it exceeds your balance, pay the mortgage off.

Our goal is to pay the mortgage off in three years. We dropped the escrow account but are paying the same amount rounded up. Any additional money, which has not been much lately, but thats another story, is deposited to the mortgage payoff account. When that amount is larger than the mortgage, we will just pay it off. We owe about the same as you do.
Last edited by veindoc on Mon Feb 19, 2018 10:39 pm, edited 1 time in total.

WhiteMaxima
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Re: Paying off $372000 mortgage in 12 months

Post by WhiteMaxima » Mon Feb 19, 2018 1:54 pm

If your investment return - tax < mortgage rate - tax deduction, then pay it off
If investment return >> mortgage, then not pay it off.

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randomizer
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Re: Paying off $372000 mortgage in 12 months

Post by randomizer » Mon Feb 19, 2018 3:32 pm

If you can find $30k/month then I don't really see the urgency in paying it off. You have enough income that you could pay it off quickly whenever you want, and knowing you could pay it off is psychologically not that far from actually paying it off. What's the rate on the mortgage? Is it fixed rate? If the rate is low and fixed, having the mortgage sounds like a great inflation hedge.
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SittingOnTheFence
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Re: Paying off $372000 mortgage in 12 months

Post by SittingOnTheFence » Tue Feb 20, 2018 12:02 am

In 2016 I had $385k owing and I timed my final regular mortgage payment for Dec.

Many mortgage institutions charge a fee to 'compute a payoff'. What I did was make 2 large lump sum "additional principal payments" in person at the Bank. The first payment was to see what the Bank would do and what my next statement would look like. After I saw that it went well, I made one more large payment in Sept leaving a balance due that the next 3 regular mortgage payments would take care of. I made those last 3 payments and didn't have to pay the Bank to computer a payoff amount. A few months later I got the reconveyance.

msk
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Re: Paying off $372000 mortgage in 12 months

Post by msk » Tue Feb 20, 2018 2:35 am

I have always considered paying off principal (not interest) on my home mortgage as part of my target of "saving and investing" 30% of my after tax income. The "profit" you make on your home is the possible price appreciation (unless you are unlucky it should at least keep up with inflation) plus the saving on rent (you have to live somewhere). For most people it'll probably turn out not to be a "great" investment but not a particularly mediocre one either. Being debt free is a very nice bonus. Pay it off asap :mrgreen:

denovo
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Re: Paying off $372000 mortgage in 12 months

Post by denovo » Tue Feb 20, 2018 5:54 am

I hope you are maxing out your 401k first.
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broslami
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Re: Paying off $372000 mortgage in 12 months

Post by broslami » Tue Feb 20, 2018 6:00 am

randomizer wrote:
Mon Feb 19, 2018 3:32 pm
If you can find $30k/month then I don't really see the urgency in paying it off. You have enough income that you could pay it off quickly whenever you want, and knowing you could pay it off is psychologically not that far from actually paying it off. What's the rate on the mortgage? Is it fixed rate? If the rate is low and fixed, having the mortgage sounds like a great inflation hedge.
It's 4.375%

I basically made lots of bad choices and a consumptive lifestyle and have a pretty low net worth for my age.

I recently paid off my car.

The debt really doesn't bother me too much but it just seems like being debt free is a really conservative way to be. The house is generating good cash flow as a rental but I like the idea of the majority of that not going to a mortgage. I also realize that the inflation hedge and shorting US dollar is good.

Anyway it's a really aggressive goal and I would need to up my income game in 2018 to pull it off.

tmcc
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Re: Paying off $372000 mortgage in 12 months

Post by tmcc » Tue Feb 20, 2018 6:36 am

if its a rental, you lose the deduction for interest if you pay it all off- more taxable income exposure.

if you have that kind of cash flow to pay down your note that fast, i'd be surprised to hear this is the best identifiable opportunity that you have in terms of ROI.

chevca
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Re: Paying off $372000 mortgage in 12 months

Post by chevca » Tue Feb 20, 2018 7:46 am

If they're pulling in $30k plus per month, they don't get to use the mortgage interest deduction. They're over the income limit for that.... way over it.

If this is a rental property, I see no point in throwing every extra dollar at it though. If someone else, the renter, is paying the mortgage and you have an income like you do, how much can that mortgage payment really bother you, OP? It wouldn't bother me much. If you want to pay it down aggressively, that's not a bad move. But, to throw $30k/month at it... that seems excessive to me. How about splitting that 50/50 at least?

tmcc
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Re: Paying off $372000 mortgage in 12 months

Post by tmcc » Tue Feb 20, 2018 7:52 am

chevca wrote:
Tue Feb 20, 2018 7:46 am
If they're pulling in $30k plus per month, they don't get to use the mortgage interest deduction. They're over the income limit for that.... way over it.

If this is a rental property, I see no point in throwing every extra dollar at it though. If someone else, the renter, is paying the mortgage and you have an income like you do, how much can that mortgage payment really bother you, OP? It wouldn't bother me much. If you want to pay it down aggressively, that's not a bad move. But, to throw $30k/month at it... that seems excessive to me. How about splitting that 50/50 at least?
I thought interest was a dollar for dollar deduction against a rental regardless of personal income...? not a tax guy though.

chevca
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Re: Paying off $372000 mortgage in 12 months

Post by chevca » Tue Feb 20, 2018 8:00 am

Nope, over $150k income/AGI there's no deductions allowed.

Although, they are deferred or delayed. But, can't be used each year.

tmcc
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Re: Paying off $372000 mortgage in 12 months

Post by tmcc » Tue Feb 20, 2018 9:24 am

loss deductions phase out but the operating expenses don't phase out, iirc. interest, taxes, maint, etc

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jriding
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Re: Paying off $372000 mortgage in 12 months

Post by jriding » Tue Feb 20, 2018 9:38 am

Are you maxing out all tax advantaged space for 2018? If not, fill that before paying off mortgage.

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unclescrooge
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Re: Paying off $372000 mortgage in 12 months

Post by unclescrooge » Tue Feb 20, 2018 7:36 pm

SittingOnTheFence wrote:
Tue Feb 20, 2018 12:02 am
In 2016 I had $385k owing and I timed my final regular mortgage payment for Dec.

Many mortgage institutions charge a fee to 'compute a payoff'. What I did was make 2 large lump sum "additional principal payments" in person at the Bank. The first payment was to see what the Bank would do and what my next statement would look like. After I saw that it went well, I made one more large payment in Sept leaving a balance due that the next 3 regular mortgage payments would take care of. I made those last 3 payments and didn't have to pay the Bank to computer a payoff amount. A few months later I got the reconveyance.
I had a second loan on a rental once. It was at a whopping 9.9% so I started making extra payments. The last payment left $19 dollars remaining on the loan and Chase just waived it and closed the account.

EddyB
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Re: Paying off $372000 mortgage in 12 months

Post by EddyB » Tue Feb 20, 2018 8:27 pm

chevca wrote:
Tue Feb 20, 2018 8:00 am
Nope, over $150k income/AGI there's no deductions allowed.

Although, they are deferred or delayed. But, can't be used each year.
No, it's still a deduction "against a rental," although above the income cap, landlords who aren't real estate professionals can't deduct the losses against other income.

broslami
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Re: Paying off $372000 mortgage in 12 months

Post by broslami » Tue Feb 20, 2018 8:31 pm

chevca wrote:
Tue Feb 20, 2018 7:46 am
If they're pulling in $30k plus per month, they don't get to use the mortgage interest deduction. They're over the income limit for that.... way over it.

If this is a rental property, I see no point in throwing every extra dollar at it though. If someone else, the renter, is paying the mortgage and you have an income like you do, how much can that mortgage payment really bother you, OP? It wouldn't bother me much. If you want to pay it down aggressively, that's not a bad move. But, to throw $30k/month at it... that seems excessive to me. How about splitting that 50/50 at least?
That seems reasonable - I tend to do things in extremes

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Re: Paying off $372000 mortgage in 12 months

Post by kevinpet » Tue Feb 20, 2018 8:38 pm

chevca wrote:
Tue Feb 20, 2018 7:46 am
If they're pulling in $30k plus per month, they don't get to use the mortgage interest deduction. They're over the income limit for that.... way over it.
What income limit? Mortgage interest is capped based on the size of the mortgage (or HELOC).

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White Coat Investor
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Re: Paying off $372000 mortgage in 12 months

Post by White Coat Investor » Tue Feb 20, 2018 8:40 pm

broslami wrote:
Sun Feb 18, 2018 10:17 pm
Hello,

I've recently gotten the debt free bug and trying to reform my profligate ways.

I have $372,000 left on my mortgage.

I've set a goal of paying it off in 12 months. I have around $90k in cash after paying off my car. Assuming I put $50k into that to start, that would be about $30k per month to pay down mortgage.

While I don't really have a problem with debt per se, I like the concept of being debt free. So I decided to just go at it with gusto.

My question is thusly - what is the best way to go about paying off the loan? Should I pay minimums and save it all in a high yield savings account and then pay it off with gusto in one go? Or chop down the tree with aggressive payments each month?

Would it be more efficient/ cheaper if I pay it down...or is it best to accumulate cash in a high yield savings for flexibility in case I want to change course if say the market tanks or whatnot.

What's the best payoff strategy? Pay off in one lump at end, pay aggressively throughout, or a mix of both?
If you're doing this in 12 months, it's just going to be brute force savings/selling/redirecting investments so no need to get fancy by investing the money for a few months. Just throw it all at the loan ASAP.

Good luck in reaching your goal!
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

msk
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Re: Paying off $372000 mortgage in 12 months

Post by msk » Wed Feb 21, 2018 12:27 am

Seems to me that for a RENTAL property, one ought to aim for a situation that the deductable outgoings (property taxes/interest/maintenance/etc.) ought to just balance the rent received. That way you get the maximum deductions with the least loan outstandings. You then take new loans/mortgages to purchase additional units. That's what I did in my RE days. A totally different approach from a mortgage on one's own home; pay off asap.

WanderingDoc
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Re: Paying off $372000 mortgage in 12 months

Post by WanderingDoc » Wed Feb 21, 2018 2:09 am

broslami wrote:
Tue Feb 20, 2018 6:00 am
randomizer wrote:
Mon Feb 19, 2018 3:32 pm
If you can find $30k/month then I don't really see the urgency in paying it off. You have enough income that you could pay it off quickly whenever you want, and knowing you could pay it off is psychologically not that far from actually paying it off. What's the rate on the mortgage? Is it fixed rate? If the rate is low and fixed, having the mortgage sounds like a great inflation hedge.
It's 4.375%

I basically made lots of bad choices and a consumptive lifestyle and have a pretty low net worth for my age.

I recently paid off my car.

The debt really doesn't bother me too much but it just seems like being debt free is a really conservative way to be. The house is generating good cash flow as a rental but I like the idea of the majority of that not going to a mortgage. I also realize that the inflation hedge and shorting US dollar is good.

Anyway it's a really aggressive goal and I would need to up my income game in 2018 to pull it off.
You could EASILY throw that $380K into a passive real estate syndication and earn a 14-18% IRR. Or if you get unlucky, you may earn 8-12%. Still higher than your 4.375% return you would get by paying off that mortgage. Your return is actually less than 4% because you lose the mortgage interest deduction expense. If you can't beat 4% easily even in a 100% passive deal, something is wrong.
I'm not looking to get rich quick (crypto), I'm not looking to get rich slow (index funds).. I'm looking to get rich, for sure (real estate).

bltn
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Re: Paying off $372000 mortgage in 12 months

Post by bltn » Wed Feb 21, 2018 6:53 am

I think the effort to pay off the mortgage as soon as you can is the way to go. Owning your home with no mortgage is a great feeling. You will have a lot of money from your income freed up for ongoing investment. Avoiding debt can be a very secure way to invest. And efficient.

JoeRetire
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Re: Paying off $372000 mortgage in 12 months

Post by JoeRetire » Wed Feb 21, 2018 8:24 am

Kitty Telltales wrote:
Mon Feb 19, 2018 10:42 am
I’ve had a few mortgages in my life and paid off each one in less than 4 years, like a car loan. I always felt a sense a financial freedom to make new choices each time.
Just curious.
If you had the cash flow to pay off multiple mortgages in less than 4 years each, why didn't you just save for 4 years and just pay cash instead?

chevca
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Re: Paying off $372000 mortgage in 12 months

Post by chevca » Wed Feb 21, 2018 10:30 am

kevinpet wrote:
Tue Feb 20, 2018 8:38 pm
chevca wrote:
Tue Feb 20, 2018 7:46 am
If they're pulling in $30k plus per month, they don't get to use the mortgage interest deduction. They're over the income limit for that.... way over it.
What income limit? Mortgage interest is capped based on the size of the mortgage (or HELOC).
That's for one's primary home. There is an income limit for rental property owners.

I was mistaken on losses vs. deductions though. My apologies for that. Good thing I didn't make enough to worry about that when I was an accidental landlord. :happy

bi0hazard
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Re: Paying off $372000 mortgage in 12 months

Post by bi0hazard » Wed Feb 21, 2018 11:02 am

WanderingDoc wrote:
Wed Feb 21, 2018 2:09 am
broslami wrote:
Tue Feb 20, 2018 6:00 am
randomizer wrote:
Mon Feb 19, 2018 3:32 pm
If you can find $30k/month then I don't really see the urgency in paying it off. You have enough income that you could pay it off quickly whenever you want, and knowing you could pay it off is psychologically not that far from actually paying it off. What's the rate on the mortgage? Is it fixed rate? If the rate is low and fixed, having the mortgage sounds like a great inflation hedge.
It's 4.375%

I basically made lots of bad choices and a consumptive lifestyle and have a pretty low net worth for my age.

I recently paid off my car.

The debt really doesn't bother me too much but it just seems like being debt free is a really conservative way to be. The house is generating good cash flow as a rental but I like the idea of the majority of that not going to a mortgage. I also realize that the inflation hedge and shorting US dollar is good.

Anyway it's a really aggressive goal and I would need to up my income game in 2018 to pull it off.
You could EASILY throw that $380K into a passive real estate syndication and earn a 14-18% IRR. Or if you get unlucky, you may earn 8-12%. Still higher than your 4.375% return you would get by paying off that mortgage. Your return is actually less than 4% because you lose the mortgage interest deduction expense. If you can't beat 4% easily even in a 100% passive deal, something is wrong.
What exactly is real estate syndication?

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whatusername?
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Re: Paying off $372000 mortgage in 12 months

Post by whatusername? » Wed Feb 21, 2018 2:12 pm

If your timeline is 12 months, the "best" way is the one that you're comfortable with since it's not like you will be investing the funds otherwise in anything likely to earn you a big return (or at least you shouldn't be taking that kind of risk in the short term).

When I paid off the second half of my house in 12 months, I paid an extra amount to the mortgage each month (about 3x the monthly payment) in addition to the scheduled payment, added in medium-sized quarterly lump sums, and made two large lump sum payments - one two months before I finished and one right at the end. It's what I was comfortable with, kept me motivated in the long and short terms, and worked in my budget. YMMV.

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Re: Paying off $372000 mortgage in 12 months

Post by White Coat Investor » Wed Feb 21, 2018 5:41 pm

bi0hazard wrote:
Wed Feb 21, 2018 11:02 am
WanderingDoc wrote:
Wed Feb 21, 2018 2:09 am
broslami wrote:
Tue Feb 20, 2018 6:00 am
randomizer wrote:
Mon Feb 19, 2018 3:32 pm
If you can find $30k/month then I don't really see the urgency in paying it off. You have enough income that you could pay it off quickly whenever you want, and knowing you could pay it off is psychologically not that far from actually paying it off. What's the rate on the mortgage? Is it fixed rate? If the rate is low and fixed, having the mortgage sounds like a great inflation hedge.
It's 4.375%

I basically made lots of bad choices and a consumptive lifestyle and have a pretty low net worth for my age.

I recently paid off my car.

The debt really doesn't bother me too much but it just seems like being debt free is a really conservative way to be. The house is generating good cash flow as a rental but I like the idea of the majority of that not going to a mortgage. I also realize that the inflation hedge and shorting US dollar is good.

Anyway it's a really aggressive goal and I would need to up my income game in 2018 to pull it off.
You could EASILY throw that $380K into a passive real estate syndication and earn a 14-18% IRR. Or if you get unlucky, you may earn 8-12%. Still higher than your 4.375% return you would get by paying off that mortgage. Your return is actually less than 4% because you lose the mortgage interest deduction expense. If you can't beat 4% easily even in a 100% passive deal, something is wrong.
What exactly is real estate syndication?
It's when you own a large property with a bunch of other owners. I bought a 200+ door apartment building last night for instance. But I only own something like 1/60th of it.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

bi0hazard
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Re: Paying off $372000 mortgage in 12 months

Post by bi0hazard » Wed Feb 21, 2018 5:47 pm

White Coat Investor wrote:
Wed Feb 21, 2018 5:41 pm
bi0hazard wrote:
Wed Feb 21, 2018 11:02 am


What exactly is real estate syndication?
It's when you own a large property with a bunch of other owners. I bought a 200+ door apartment building last night for instance. But I only own something like 1/60th of it.
Cool. Thanks for the answer. Is this commonly done with friends/work partners or some other company with unknown associates?

software
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Re: Paying off $372000 mortgage in 12 months

Post by software » Wed Feb 21, 2018 5:53 pm

bi0hazard wrote:
Wed Feb 21, 2018 5:47 pm
White Coat Investor wrote:
Wed Feb 21, 2018 5:41 pm
bi0hazard wrote:
Wed Feb 21, 2018 11:02 am


What exactly is real estate syndication?
It's when you own a large property with a bunch of other owners. I bought a 200+ door apartment building last night for instance. But I only own something like 1/60th of it.
Cool. Thanks for the answer. Is this commonly done with friends/work partners or some other company with unknown associates?
He's probably using something like this: https://www.realtyshares.com/

Keep in mind all of these real estate crowd-funding investments require you to be an accredited investor. If you don't know that that is, feel free to read more here: https://en.wikipedia.org/wiki/Accredited_investor

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Re: Paying off $372000 mortgage in 12 months

Post by slalom » Wed Feb 21, 2018 6:43 pm

chevca wrote:
Tue Feb 20, 2018 8:00 am
Nope, over $150k income/AGI there's no deductions allowed.
Say what? My AGI is over that and I just had about $35k in deductions including $11k mortgage interest.

Are you talking about rental property mortgages specifically or something? Not sure about those.

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White Coat Investor
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Re: Paying off $372000 mortgage in 12 months

Post by White Coat Investor » Wed Feb 21, 2018 7:36 pm

slalom wrote:
Wed Feb 21, 2018 6:43 pm
chevca wrote:
Tue Feb 20, 2018 8:00 am
Nope, over $150k income/AGI there's no deductions allowed.
Say what? My AGI is over that and I just had about $35k in deductions including $11k mortgage interest.

Are you talking about rental property mortgages specifically or something? Not sure about those.
You all seem confused to me. Interest is fully deductible on a rental property as a business expense without regard to your own personal income. What you can't deduct above a certain income is your business losses. As long as you have more income in the business than expenses, no big deal. If you don't have more income than expenses, are you sure you want to own that business?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Paying off $372000 mortgage in 12 months

Post by White Coat Investor » Wed Feb 21, 2018 7:37 pm

software wrote:
Wed Feb 21, 2018 5:53 pm
bi0hazard wrote:
Wed Feb 21, 2018 5:47 pm
White Coat Investor wrote:
Wed Feb 21, 2018 5:41 pm
bi0hazard wrote:
Wed Feb 21, 2018 11:02 am


What exactly is real estate syndication?
It's when you own a large property with a bunch of other owners. I bought a 200+ door apartment building last night for instance. But I only own something like 1/60th of it.
Cool. Thanks for the answer. Is this commonly done with friends/work partners or some other company with unknown associates?
He's probably using something like this: https://www.realtyshares.com/

Keep in mind all of these real estate crowd-funding investments require you to be an accredited investor. If you don't know that that is, feel free to read more here: https://en.wikipedia.org/wiki/Accredited_investor
I do have some syndicated/crowdfunded investments with RealtyShares. This wasn't one of them. It was directly with the syndicator without a crowdfunding website middleman. Higher minimum required so more difficult to diversify, but removes one layer of fees.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Paying off $372000 mortgage in 12 months

Post by White Coat Investor » Wed Feb 21, 2018 7:39 pm

bi0hazard wrote:
Wed Feb 21, 2018 5:47 pm
White Coat Investor wrote:
Wed Feb 21, 2018 5:41 pm
bi0hazard wrote:
Wed Feb 21, 2018 11:02 am


What exactly is real estate syndication?
It's when you own a large property with a bunch of other owners. I bought a 200+ door apartment building last night for instance. But I only own something like 1/60th of it.
Cool. Thanks for the answer. Is this commonly done with friends/work partners or some other company with unknown associates?
I have done it with work partners on an office building for our business, but it's generally done with a group of people put together by the syndicator that you may or may not know. I don't know any of the other partners in this particular syndication.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Paying off $372000 mortgage in 12 months

Post by chevca » Thu Feb 22, 2018 9:48 am

slalom wrote:
Wed Feb 21, 2018 6:43 pm
chevca wrote:
Tue Feb 20, 2018 8:00 am
Nope, over $150k income/AGI there's no deductions allowed.
Say what? My AGI is over that and I just had about $35k in deductions including $11k mortgage interest.

Are you talking about rental property mortgages specifically or something? Not sure about those.
Yes, I was talking about rental properties, and I had been confusing deductions and loses. And, I addressed that later in the thread, before you posted this. :wink:

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Re: Paying off $372000 mortgage in 12 months

Post by inbox788 » Sun Feb 25, 2018 7:03 pm

broslami wrote:
Tue Feb 20, 2018 6:00 am
It's 4.375%
IMO, at this rate, it's worth paying off ASAP. YMMV.

Where is the money coming from each month? Cash flow? Or are you liquidating other investments? Without know the opportunity cost, it's hard to make A/B comparisons.

Every day you don't pay off the balance costs you interest, so whatever return the cash you keep needs to exceed that to make it worthwhile (after adjusting for tax consequences and other issues). If in 12 moths, you'll have it paid off no matter why, I don't see any disadvantage of doing it immediately and moving on to your next chapter.

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Re: Paying off $372000 mortgage in 12 months

Post by Wildebeest » Sun Feb 25, 2018 8:31 pm

If you have the cash flow and it does not catch up with you.

Go for it!

I never was in your shoes. I hope it works out for you.
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Kitty Telltales
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Re: Paying off $372000 mortgage in 12 months

Post by Kitty Telltales » Wed Feb 28, 2018 2:36 pm

JoeRetire wrote:
Wed Feb 21, 2018 8:24 am
Kitty Telltales wrote:
Mon Feb 19, 2018 10:42 am
I’ve had a few mortgages in my life and paid off each one in less than 4 years, like a car loan. I always felt a sense a financial freedom to make new choices each time.
Just curious.
If you had the cash flow to pay off multiple mortgages in less than 4 years each, why didn't you just save for 4 years and just pay cash instead?
Our lifestyle changes happened faster than our savings grew. However I remember having a few years between upgrading houses, living without a mortgage and it felt like financial freedom. We were able to make choices and decisions without feeling burdened by a mortgage. We had a growing business at this time and the moves were also to accommodate the business.

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