Should I Pay Off My Mortgage Early or Invest in Stocks? | The Answer is Clear!
Published: 2022-05-22
Status:
Available
|
Analyzed
Published: 2022-05-22
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Paying down a mortgage with a 6% interest rate is equivalent to earning a 6% return on investment.
"if you have a high interest rate on your mortgage then any extra money that you send in to pay down your mortgage it's gonna be like that money is earning you six percent"
Pending
To outperform paying off a mortgage with a 6% interest rate, investments need to yield 8-10% before taxes to net approximately 6% after taxes.
"if you'd rather take that extra money and put it into the stock market or invest it then you better make a rate of return of eight nine ten percent because after taxes you're going to be left with about six percent"
Pending
Interest rates may decrease in the future, allowing for mortgage refinancing at a lower rate.
"if you have a high interest rate then just know that in the future interest rates they might drop and then you can refinance for a lower interest rate"
Pending
Switching mortgage payments from monthly to bi-weekly can result in paying off the mortgage up to 8 years faster.
"you can switch your payment frequency from monthly to bi-weekly if you do bi-weekly then you're going to pay down your mortgage faster by up to even eight years"
Pending
Index funds or mutual funds are predicted to easily outperform a 2.7% mortgage interest rate in the long run.
"you could probably easily beat 2.7 in the long run"
Pending
To financially benefit from investing over paying down a mortgage, the investment's rate of return (after taxes) must exceed the mortgage's interest rate.
"if you want to invest your money then you need to get a rate of return on your investment that is greater than the interest rate on your mortgage"
Pending
A mortgage interest rate of 2.7% makes investing extra funds a more attractive option compared to paying down the mortgage.
"if the interest rate on your mortgage is low like 2.7 ... then that would be much less challenging and you would be more inclined to invest your money"
Pending
Tax-free investment strategies like Roth IRAs, Roth 401(k)s, HSAs, and 529 plans are recommended for investing extra money.
"if you want to invest your money then please note that there are a lot of tax-free strategies For example you can put your money to work for you in a roth ira a roth 401k an hsa plan of 529 plan etc"
Pending
If current mortgage interest rates are high, future drops may present an opportunity to refinance for a lower rate.
"if you have a high interest rate then just know that in the future interest rates they might drop and then you can refinance for a lower interest rate"
Pending
Individuals itemizing tax deductions can receive a tax deduction for the mortgage interest they pay.
"on your personal income tax return if you are itemizing your tax deductions then you're going to be receiving a tax deduction for the mortgage interest that you're paying"
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Prioritize paying off any loan with a higher interest rate before focusing on paying down a mortgage.
"if you have another loan with a higher interest rate then you're going to want to focus on that loan first"
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Credit card debt with a 20% interest rate should be prioritized for payoff before other debts.
"if you have a credit card with a balance and that balance is getting charged an interest rate of 20 percent then you should prioritize paying off that one first"
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Switching mortgage payments from monthly to bi-weekly can accelerate mortgage payoff by up to eight years.
"you can switch your payment frequency from monthly to bi-weekly if you do bi-weekly then you're going to pay down your mortgage faster by up to even eight years"
Pending
Investing in index funds or mutual funds can likely yield returns greater than 2.7% in the long run.
"you could probably easily beat 2.7 in the long run"
Pending
Many individuals prioritize becoming debt-free for peace of mind over potential investment gains.
"a lot of people they just want to be debt free so they just want to get that burden off their shoulders"
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