How to Pay Off Your Mortgage in 4-5 Years.
Updated: Aug 20
So, today we're talking about acceleratedmethodologies for how you pay off a mortgage. And I'm going to show you 4different ways to do that.
Like if you want to accelerate and get that housepaid off, I'm going to tell you that my whole journey of buying thousands ofhomes began with my fascination of the fact that I was on the phone doingtelemarketing in college talking to people who had gone to college, followedsociety's plan and then got a house. And you could tell that the burden oflike owning a house worth having hundreds of thousands of dollars of debt,it bothers people, right? It's like the biggest payment in your life. And so, Inoticed that a lot of these people 20-30 years later withrefinancing and restructuring the loan, they weren't getting their houses paidoff. And then at some point, you get old enough or it's like, "This is like a weightand this is a pressure." So, as a young man in my early 20s I'm like, "There has gotto be a way to get this house paid off quicker and faster." So, I am going to share4 methodologies with you today. And with that, we're going to get right to it. So, come on into my secret lab that isn'tso secret. But it is my studio and what we're going to do here is I'm going to kind ofthrow up on the board what these 4 options look like and break this downfor you. "So, Kris.
You might be asking what is the most traditional way thatpeople go about paying something off?" Option number one is that when you get ahouse, the typical mortgage in America is what's called a 30-year fixed mortgage.
And what a 30-year fixed mortgage is, is basically it's a bank saying, "Oh, we'relending you money." And let's just use round numbers. You're buying a house for$300,000 and you're thinking to yourself, "Alright. What's it going to take for me topay off this house?" The bank says, "Well, we'll help you pay it off in 30 years."But it's not just taking 300,000 and dividing it by 30 years of mortgages.You're actually going to pay for that house like two-and-a-half times over. And thebank is going to make all that money and interest. And I don't want to go into toomuch of that detail because I think it's a little bit boring. But I want youunderstand that the bank wants their money if they're going to work with you forthat super long period of time. Now, the way that they do this is they basicallysay, "Oh! 30-year fixed mortgage, here's your payment." And if you make thatpayment every month for a year, that's 12 months. But do it for 30 years. It's like365 payments. And if I were to do that for 30 years,the bank would get all of their money back a couple of times plus you'd get onthe house free and clear. Free and clear means you have no moremortgage on it. You have no more payments and you own it. Here's the funny thingabout this: What you need in your 30s when you buy a house is what you thinkyou'll need in your 50s or 60s, dude probably not. You might have kids.
Youmight have to move. You might get job changes. You could move across thecountry. You may have to downsize. You might need to upgrade. In reality is noone keeps a 30-year fixed mortgage. And here's the problem: The bank's front-loadall of the money they get in the beginning. So, if I had a payment of let'ssay $1,500 a month, like 80 bucks is going towards the principal, the rest isgoing towards interest. And the bank knows this. They know that there's a highlikelihood you're going to move or change your life in the next 7 to 10 years.So basically, almost all the money that you're paying on this 30-year mortgagegoes to who? THE BANK! So, you're not even paying the house downhardly at all. It sucks but it's true. And if you're thekind of person that's like, "Actually Kris, I've got a pretty boringpredictable life. And not much is ever going to happen to me and I'm not reallygoing to go places.
And what I want today is what I want 30 years from now." If that'syou, then something like this might work. But for you to actually gain the bank atthis system, you'd have to hold on to that mortgage for at least 25 years. Sucks. So then you start saying, "You know what? I am now aware of that Kris. There's got to be a better way. A faster way to pad my mortgage." And you know whatthey do? The bank said "You know what? For those that you want to be moreaggressive to be more conservative..." So, we're putting those 2 words together."We're inventing something called the 15-year mortgage." And here's the way the15-year mortgage does. You're not going to pay so much out an interest butyou're going to have a much higher payment. So, instead of a $1,500 month paymentmaybe your payment is $2,200 a month. And guess what? You only have to pay it for15 years. Some of you're like, "Hey! This is fantastic." It's not fantastic. You'regoing to bleed more cash flow. You're going to put more money into the house. And whatyou're really doing is investing in your house. Problem is your house doesn't payyou anything. It's a liability.
Even though it'll appreciate with time andthe value will go up and you'll look back at some point be like, "Wow, I have somuch of my assets and net worth in my house. This was a great decision." You'llhave done it the most inefficient way possible. If you want the bank to win,play their games. I don't like the bank to win. I want to win. I'd like everyoneto win. But the bank here's going to collect so much money off of you, it's ridiculous.And if your life changes in the next 3, 4 or 5 years, you're notgonna really reap the benefits of that. But more importantly, you don't have asmuch free cash flow because you're dumping it from your own pocketbook. You're dumping it back in the bank as if it's an investment. It's not aninvestment. Then you say, :"Alright. I want to do something even more aggressive."That's it. You're like, "You know what? I don't want the bank to win." So, you knowwhat I'm going to do? I'm going to get on either a 15 or a 30 or mortgage.
But whatI'm going to do is I'm going to throw extra money at the bank. If my paymet is 2 thousand, I'mgoing to pay 2500 this month." And why are you doing that? Because youwant to pay it off quicker and add more principal which means you're going to payless an interest. Problem is you're still playing the bank's game. Now, I do have anoption that I do believe in. It's not one of these 3. And at this point, youmight be wondering what it is. And my friends, this is why you're reading theblog. And that's why you've gotten to this point. It's for this moment righthere. So, I'm going to give it to you. I'm going to tell you however that it'sdifferent than what most people think. I don't believe in ownership.I believe in control. And while I can't control people, I can't control money tosome extent. I want to kind of break that down for you. Being a young man andrealizing, "Oh, my gosh. Paying off my house is like... It's one of the hardest thingsto do. It takes so long.
What's a faster way?" Instead of puttingextra money in the bank, take that extra money and option number 4 is put thedifference into an investment property. Investment real estate. Imagine for justa moment if you bought a house that had at least a 20% annual ROI. Andlet's just say that instead of paying down that house more or putting a biggerdown payment on it, let's say that you put $40,000 down on a $200,000 house.That represents by the way about a 20% down payment. And it's like, "I could takethat 40 grand and put it in my house and pay off my primary residence sooner. Butinstead you know what I'm going to do? I'm going to take that 40,000. I'm going to putinto an investment property." And if I'm earning a 20% ROI,here's the question:
How long does it take for me to double my money?: 1, 2, 3, 4, 5 years. 20%, 20% 20%, 20% 20%adds up to 100%. 1, 2, 3, 4, 5 years. so, just imagine for a moment that youcould double your money every 5 years. if you could do that, then 5 yearslater, 40,000 has become what? well, it's become 80,000. But 5years later, 80,000 has become what? 160,000 five years later, what doesit become? It's become three hundred and twenty thousand dollars. Now by the waywe did this in 15 years just by buying one investment property. You couldfreaking pay off your house right now and have leftover money to invest." let meshare with you the scenario. I find people and all day long.
And thisis how I've helped people really grow themselves. I don't find people that owna house already it's a primary residence. And they've got some equity into. Let'ssay it has a value of $300,000. That's what that's what it is worth in today'smarketplace. But what they owe is 15 now if your house. Worth three hundred K and you owe 150 K,then how much equity? Do you have? Equity. means the difference between what youowe and what it's worth. So this is the V for value. O is for owing and we're gonnause E for equity. And the equity is also a 150,000. If I take myequity when I own at it together, I get the value of a home. So, what can I dowith this equity of a 150 thousand dollars? Well, most people can goto a bank. Borrow up to 80 or 90 percent of the value on their home. In thissituation, probably free up about 80 thousand dollars.
Now, the bank will letyou actually borrow that. It's called a home equity line of credit. Or you couldjust refinance the house. The bank gives you 80 grand because they're like, "Dude, this is anasset." You have this money. What could you do with 80,000? Now first of all,you're thinking, "Kris, I'm freaking trying to actually like pay off my house. Likeif I pull 80 grand out, guess what? I don't know 150 any more. Now, I owe 230 grand. Like I'm freaking going into debt. This is not the plan!"read. One step backwards might mean 10 steps forward. This 80,000 isenough to buy what? 2 homes. If those homes are earning 20%, then in 5 years, I can turn my 80,000 into what? 160,000. By year 10, if I turn that into 320thousand dollars, what can I do with that $320,000?I can pay off the house. I can have leftover money. And I did it in 10years. I didn't do it in freaking 20 years. And I'm even faster than that when youactually look at the compound interest effect. Today's blog I wanted to kind ofopen your mind and let you know there is a smarter way, there's a better way.
Butyou've got to be thinking "How do I access homes with a 20% ROI?"Well, most of my homes have a 25, 28 or a 30 percent ROI.Which means I can double my money sometimesevery 3 years. If you'd like to learn more about that, couple of things: One, Ihighly recommend that you actually get a copy of this book. I'm giving it away toyou today for free. There's a link below. This book will share with you exactlyhow I do that. And there's another link below maybe a more important link thatsays, "Partner with Kris." It'll take you to a page where I'll show you my trackrecord on my last 4,000 homes. And I'm also go share with you going to show I get 25to 30% ROIs. If you like what you find there, you can talk to my team and Ican actually show you how to pay off your home.
Not only a lot faster but moreimportantly, create the real dream which is not a paid off home. It's called financial freedom. And I don't mean financial freedom is like, "I'mrich! I'm a billionaire!" What I really mean is getting on mortgaging your lifenot just your house. "How do I live life on my terms? How do I get the residualincome I need to get my time back in? And do the things that I want with who Iwant when I want?" I figured all that out by the age of 26. And now, I've been ableto magnify it and take it to a whole new level. We got this one life to live. Don'tlet the bank's own it. Don't play the banks games. Their games take so freakinglong. The reality is there's a better way, a smarter way, a faster way. And frankly, asafer way. So, do yourself a favor.
Pay off your house the most intelligentlypossible. My name is Kris Krohn. I hope you enjoyed today learning about the4 different ways to pay off your house. The links are below to learn about howyou access my deals earning 25 to 30 percent.Or I can get a free copy of my book. Either one of them can be super helpfulon your journey of figuring out how to become financially free and take totalfinancial control over your life. If you're brand new to the blog, makesure you subscribe. I got new blogs coming out every day to teach you how tobe your own financial genius. Take care.
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Destine To Do.