Are You Wasting Money by Accelerating Payments on your Home Mortgage?

Hi Jimmy,

I'm glad you brought that up.  I never forget that.  

I show my clients what is possible because I want them to make a decision based on facts, not their grandparent's model of debt management, which was based on the real fear during the depression that their lender could call the loan due even if grandpa was making on time payments.  

To be able to pay off your mortgage from assets is much better, and I show them why.  But if after being shown how much faster they can accumulate assets and safely pay off their mortgage from those assets, they still would rather focus on paying off their mortgage by accelerating payments or putting more money down on a home, I will be the first to advise them to do so.  I'm not here to promote strategic equity strategies at all costs.

Every client has a different mindset and comfort level and I respect that as you rightfully put it as my fiduciary responsibility, just as I would not recommend strategic equity for a borrower who has not demonstrated good savings habits (the last sentence of my post points that out.) And I use 6-8% when showing returns from a fully diversified portfolio because  I am pretty conservative.  What I do that many other lenders don't is provide a personalized and detailed analysis for each borrower so that they can see for themselves how mortgage planning can benefit them and their whole financial picture.

Having said that, my high net worth clients are the ones who best understand strategic equity management, but they are all grateful for the info.

Thanks for your post.