E5: Make Money like a Bank – The Top Mortgage Myths
Fifteen-year mortgage or thirty? In this episode of Dollars and Nonsense, Holly and Nate discuss which route you should choose to have more control over your money. Listen in as they also dispel the top mortgage myths leading individuals away from financial freedom.
It’s time to start thinking like a bank and making money off your mortgage.
Bonus: Learn how to use your house to your advantage with the IRS.
“One of the biggest mortgage myths is to always go for the lower interest rate. And the cheaper the interest rate the better off you’ll be. But we find that’s not always the case.”“The banks want us to stuff as much money in there as we can because then they can go use it again. And the quicker we give it back to them, the happier they are.”“Stop investing money in the equity of your house. It’s one of the worst—it is the worst investment– you can make because it’s guaranteed to grow by zero percent.”
“[Don’t] go out and take the money that you would have normally sent to principal and throw it into something that’s volatile. In other words, it wouldn’t be too wise to go out and take the thirty-year mortgage and all those dollars that you would have sent on a fifteen-year to go make that investment elsewhere that could go belly-up.”“We keep calling our house an asset, and it is an asset, but unless you start using the equity you’ve got, using the leverage you can have, using the deductions you can get, it really acts more like a liability … it can make you be cash poor.”
“We need to start thinking like a bank thinks. And seeing our house as an asset and not the mortgage as a liability. And really start trading places with the bank and using what they’ve given us to be able to create more money and income for the future.”
“We get so caught up in wanting to get the mortgage paid off that we lose sight that if we get it paid off, we no longer have the interest deductions, we no longer have the control of that money, [and] that house is not producing us any profit as far as getting all that principal paid in. We lose sight of the alternate form; we think the best thing we can do is to get our house paid off.”
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