Pay Off the 30-Year Mortgage Early or Invest?

Our first question of the month comes in from Patrick from California:


Hey Andy, can I pick your brain real quick about paying off your mortgage?

I just bought a house here in San Diego and got a 30 year fixed on it. 

If I wait 30 years to pay it off, I will have paid $162,000 in interest which doesn’t sit very well with me.

What was your reason for paying off your mortgage?  

I was thinking instead of making extra payments on the principal that I would instead invest that money. After 8-10 years I would have amassed enough to pay off the mortgage in a lump sum.

What are your thoughts on that? Invest the money or pay off the mortgage?  

My reason to accelerate paying it off is that: 

1. I hate debt  

2. Lower my monthly expenses after loan is paid off  

3. Save at least $100K in interest payment

Many thanks bro!

Patrick 


Continue reading “Pay Off the 30-Year Mortgage Early or Invest?”

How I Wasted Over $13,000 Refinancing My Mortgage

In 2004, my first mortgage was a 30-year 5/1 ARM at 5.25%. If that information confuses you, don’t worry. I was completely confused too when I signed up for it at 22 years old.

I didn’t care though. After saving up $20,000, I was thrilled to put that money into my first house down payment. I was proud to be a homeowner.

That’s what we’re supposed to do, right? Buy a home so we’re not wasting our money on rent?

Well, homeownership can be a smart move for some, but not the way I did it. I made two mistakes right away with my first home:

  1. Signing up for a mortgage that I didn’t understand
  2. Committing to homeownership costs that I could not afford

Continue reading “How I Wasted Over $13,000 Refinancing My Mortgage”