So, today we're talking about accelerated methodologies for how you pay off a
mortgage. And I'm going to show you 4 different ways to do that. Like if you
want to accelerate and get that house paid off, I'm going to tell you that my
whole journey of buying thousands of homes began with my fascination of the
fact that I was on the phone doing telemarketing in college talking to
people who had gone to college, followed society's plan and then got a house. And
you could tell that the burden of like 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, I noticed that a lot of these people
20-30 years later with refinancing and restructuring the loan,
they weren't getting their houses paid off. And then at some point, you get old
enough or it's like, "This is like a weight and this is a pressure." So, as a young man
in my early 20s I'm like, "There has got to be a way to get this house paid off
quicker and faster." So, I am going to share 4 methodologies with you today. And
with that, we're going to get right to it.
So, come on into my secret lab that isn't so secret. But it is my studio and what
we're going to do here is I'm going to kind of throw up on the board what these 4
options look like and break this down for you. "So, Kris. You might be asking
what is the most traditional way that people go about paying something off?"
Option number one is that when you get a house, 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're lending 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 to pay 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 the bank is going to make all that money and
interest. And I don't want to go into too much of that detail because I think it's
a little bit boring. But I want you understand that the bank wants their
money if they're going to work with you for that super long period of time. Now, the
way that they do this is they basically say, "Oh! 30-year fixed mortgage, here's
your payment." And if you make that payment every month for a year, that's 12
months. But do it for 30 years. It's like 365 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 on the house free and clear.
Free and clear means you have no more mortgage on it. You have no more payments
and you own it. Here's the funny thing about this: What you need in your 30s
when you buy a house is what you think you'll need in your 50s or 60s, dude
probably not. You might have kids. You might have to move. You might get job
changes. You could move across the country. You may have to downsize. You
might need to upgrade. In reality is no one keeps a 30-year fixed mortgage. And
here's the problem: The bank's front-load all of the money they get in the
beginning. So, if I had a payment of let's say $1,500 a month, like 80 bucks is
going towards the principal, the rest is going towards interest. And the bank
knows this. They know that there's a high likelihood 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 mortgage goes to who? THE BANK!
So, you're not even paying the house down hardly at all.
It sucks but it's true. And if you're the kind of person that's like, "Actually
Kris, I've got a pretty boring predictable life. And not much is ever
going to happen to me and I'm not really going to go places. And what I want today is
what I want 30 years from now." If that's you, then something like this might work.
But for you to actually gain the bank at this 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 what they do? The bank said "You know what? For
those that you want to be more aggressive 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 the 15-year mortgage does. You're not going
to pay so much out an interest but you're going to have a much higher payment.
So, instead of a $1,500 month payment maybe your payment is $2,200 a month. And
guess what? You only have to pay it for 15 years. Some of you're like, "Hey! This is
fantastic." It's not fantastic. You're going to bleed more cash flow. You're going to
put more money into the house. And what you're really doing is investing in your
house. Problem is your house doesn't pay you anything. It's a liability. Even
though it'll appreciate with time and the value will go up and you'll look
back at some point be like, "Wow, I have so much of my assets and net worth in my
house. This was a great decision." You'll have 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 everyone to 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 not gonna really reap the benefits of that.
But more importantly, you don't have as much 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 an investment. 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 know what I'm going to do? I'm going to get on
either a 15 or a 30 or mortgage. But what I'm going to do is I'm going to throw extra
money at the bank. If my paymet is 2 thousand, I'm going to pay 2500 this month."
And why are you doing that? Because you want to pay it off quicker and add more
principal which means you're going to pay less an interest. Problem is you're still
playing the bank's game. Now, I do have an option that I do believe in. It's not one
of these 3. And at this point, you might be wondering what it is. And my
friends, this is why you're watching the video. And that's why you've gotten to
this point. It's for this moment right here. So, I'm going to give it to you. I'm
going to tell you however that it's different 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 to some extent. I want to kind of break that
down for you. Being a young man and realizing, "Oh, my gosh. Paying off my house
is like... It's one of the hardest things to do. It takes so long.
What's a faster way?" Instead of putting extra money in the bank, take that extra
money and option number 4 is put the difference into an investment property.
Investment real estate. Imagine for just a moment if you bought a house that had
at least a 20% annual ROI. And let's just say that instead of paying
down that house more or putting a bigger down 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 take that 40 grand and put it in my house and
pay off my primary residence sooner. But instead you know what I'm going to do? I'm
going to take that 40,000. I'm going to put into 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 you could double your money every 5 years.
if you could do that, then 5 years later, 40,000 has become what?
well, it's become 80,000. But 5 years later, 80,000 has become what?
160,000 five years later, what does it become? It's become three hundred and
twenty thousand dollars. Now by the way we did this in 15 years just by buying
one investment property. You could freaking pay off your house right now
and have leftover money to invest." let me share with you the scenario.
I find people and all day long. And this is how I've helped people really grow
themselves. I don't find people that own a house already it's a primary residence.
And they've got some equity into. Let's say it has a value of $300,000. That's
what that's what it is worth in today's marketplace.
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 you owe and what it's worth. So this is the V
for value. O is for owing and we're gonna use E for equity. And the equity is also a
150,000. If I take my equity when I own at it together, I get
the value of a home. So, what can I do with this equity of a 150
thousand dollars? Well, most people can go to a bank. Borrow up to 80 or 90 percent
of the value on their home. In this situation, probably free up about 80
thousand dollars. Now, the bank will let you actually borrow that. It's called a
home equity line of credit. Or you could just refinance the house. The bank gives
you 80 grand because they're like, "Dude, this is an asset." 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. Like if 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!" Watch. One step backwards might mean 10
steps forward. This 80,000 is enough 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 320 thousand 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 10 years. I didn't do it in freaking 20 years.
And I'm even faster than that when you actually look at the compound interest
effect. Today's video I wanted to kind of open your mind and let you know there is
a smarter way, there's a better way. But you'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
sometimes every 3 years. If you'd like to learn
more about that, couple of things: One, I highly recommend that you actually get a
copy of this book. I'm giving it away to you today for free. There's a link below.
This book will share with you exactly how I do that. And there's another link
below maybe a more important link that says, "Partner with Kris." It'll take you
to a page where I'll show you my track record on my last 4,000 homes. And I'm
also go share with you going to show I get 25 to 30% ROIs. If you like what you
find there, you can talk to my team and I can actually show you how to pay off
your home. Not only a lot faster but more importantly, 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'm rich! I'm a billionaire!" What I really
mean is getting on mortgaging your life not just your house. "How do I live life
on my terms? How do I get the residual income I need to get my time back in? And
do the things that I want with who I want when I want?" I figured all that out
by the age of 26. And now, I've been able to magnify it and take it to a whole new
level. We got this one life to live. Don't let the bank's own it. Don't play the
banks games. Their games take so freaking long. The reality is there's a better way,
a smarter way, a faster way. And frankly, a safer way. So, do yourself a favor. Pay off
your house the most intelligently possible. My name is Kris Krohn. I hope
you enjoyed today learning about the 4 different ways to pay off your
house. The links are below to learn about how you 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 helpful on your journey of figuring out how to
become financially free and take total financial control over your life. If
you're brand new to the channel, make sure you subscribe. I got new videos
coming out every day to teach you how to be your own financial genius.
Take care.