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.
