The Ultimate Guide to Should I Pay Off My Mortgage

Are you wondering: Should I Pay Off My Mortgage? Such a simple question, but there are many considerations to whether you should pay extra on your mortgage and specifically… should you pay off your rentals early?

Turns out that the Real Estate Financial Planner™ software is uniquely qualified to answer the questions relating to paying off mortgages early and how it impacts your entire investing strategy.

Of course, a simple mortgage payoff calculator can be used to see how making extra principle payments will impact a single property, but when you start to evaluate paying off more than one property it gets much more complicated. Add in the comparison of what you could do with the extra money you’d use for paying off your loans and the solution is not nearly as obvious.

The Real Estate Financial Planner™ software allows you to drill down and see how paying off some or all of your mortgages early impacts cash flow, total interest paid, your speed of reaching your goal of financial independence and much more.

You can also (finally) model the risk of investing the money you intend to use for paying off mortgages in the stock market to get a higher rate of return while you’re waiting to grow the amount to be enough to completely pay off the mortgage. I’d recommend using monte carlo simulations to get a true feel for how this may play out for you.

Upcoming Class

That’s why I am teaching a full 2-hour class on “Should I Pay Off My Mortgage?” on January 15, 2020 for our local real estate investor group.

In that class I plan to cover:

  • Which Mortgage To Pay Off
  • Reasons To Pay Off Your Mortgage Early (Your Investing Goals and Priorities)
  • Reasons To Not Pay Off Your Mortgage Early
  • What You Should Do Before Starting To Pay Off Mortgages Early
  • Paying Off Your Primary Owner-Occupant Property
  • Paying Off Rentals With Cash Flow
  • Paying Off Rentals But Only If You Can Pay It Off In Full
  • The Return On Investment From Paying Off A Mortgage Early
  • The Alluring Deceptive Cash Flow Math Of Paying Off Mortgages Early
  • Prioritizing Which Loans To Pay Off Early (Cap Rate, Lowest Balance, Highest Interest Rate)
  • Refinancing A Property To Pay Off Another Property
  • Should you spread out cash flow evenly between all the properties?
  • Should you send all the cash flow to one property and rotate between the properties quarterly?
  • Should you send all the cash flow to a specific property to pay off the property first? Which property?
  • Liquidity: Accessing Equity in Paid Off Properties (post and reference class on lines of credit)
  • Return On Investment Quadrant™ and Return on Equity Quadrant™ discussions related to this
  • Improving cash flow and the loan payment/loan balance ratio
  • Debt snowball with mortgages
  • Compare charts showing total interest paid making equal payments versus paying off lowest balance first

Of course, the above outline is a very rough draft of some of the ideas I want to cover in the class I am going to teach and I reserve the right to add, remove or change the content when I actually teach the class.

Paying Off Mortgages To Achieve Financial Independence

While you’re waiting for me to teach a class specifically on this topic, you can read the amazing 240-page book on How to Achieve Financial Independence and Live Your Passion Regardless of Age or Income for free in the meantime.

The following chapters deal with paying off mortgages early:

  • Chapter 7: Paying Off Mortgages with Cash Flow
  • Chapter 8: Paying Off Mortgages—But Only In-Full
  • Chapter 10: Selling Properties to Completely Pay Off Mortgages on the Remaining Properties

In each chapter, I go into crazy detail on what the math looks like for each plan and how paying off mortgages affects your ability to reach financial independence.

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