Quote:
Originally Posted by captainofiron
Any tips for paying a mortgage early?
I have been reading about Home Equity Lines of Credit (HELOC) and "Velocity Banking"
I was skeptical when I first read about it, but after running the numbers
So as it stands we have a 30 yr mortgage (payoff in 2046) and are paying "3.875%" interest and if we change nothing will end up paying $135k in interest
After running the numbers with a 4.5% HELOC and using 65k for that Velocity banking scheme, we will pay it off in 2025 and only pay 40k in interest (both on the HELOC and Mortgage)
Thoughts?
Opinions?
Advice?
The only CON I can think of is the variable interest, but my calculation has the interest rate going up in a curve with max .45% increases and .20% decreases
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Have you factored/calculated the interest deduction benefit on your tax return for each year?
What about the opportunity cost of that money being spent to buy down the mortgage? That answer is different for everyone, but you should consider what you would do with that money if you didn't pay it off.
Personally, unless I am sitting on Weld type of cash.... I won't pay off my 3.75% 1st mortgage early. I'll invest that money elsewhere.... or buy cars/car parts.
