Mortgage Investment And Interest Rates

Invest in​ yourself - Invest in​ Your Own mortgage and reduce those interest charges.

Let's begin with the​ premise that you​ are a​ homeowner,​ have a​ mortgage and have at​ least a​ small amount of​ money left each month to​ invest. Where do you​ invest it? You'll want a​ safe investment that pays more than those bond funds. it​ would be nice if​ your investment compounded monthly. How about accessibility? Yeah,​ that's very important. No problem.

The baby boomer generation were taught that having savings is​ good and that it​ should be put safely in​ the​ bank. Even if​ the​ bank became insolvent our money is​ insured by the​ FDIC up to​ $100,​000. So all we had to​ do,​ if​ we were lucky enough to​ have more money than that was to​ open account at​ another bank. Only problem is​ the​ interest that the​ banks pay on​ savings or​ even certificates of​ deposits is,​ at​ most 5.5% AND is​ taxable.

An alternative to​ Stocks,​ Bonds and Mutual Funds could be just putting the​ funds you​ may otherwise invest in​ these methods and pay down your mortgage. So in​ other words… each month pay your mortgage payment plus some extra. Maybe a​ portion of​ the​ amount you​ invest each month or​ maybe the​ whole investment,​ the​ decision is​ yours.

A Little Extra - the​ Savings Math

Here's an​ example of​ what would happen if​ you​ invested in​ the​ mortgage,​ you​ owe on​ your home. Let's use a​ new fixed rate mortgage with a​ starting balance of​ $100,​000 amortized over 30 years at​ 7%. By paying an​ extra $25 per month we would pay this mortgage off 39 months early. Check my math,​ but I calculate that would save us 39 (month) x $665.31 (monthly payment amount) = $25,​947 minus 321 months that we made extra payments each of​ $25 or​ a​ total of​ $8,​025 would leave us $17,​992 in​ savings growth. $17,​992 divided by 321 months is​ an​ average of​ $55.83 a​ month in​ tax free growth. Annualized that amount for a​ yearly average of​ $669.96. Divide that by our yearly investment of​ $300 ($25/month) and we get a​ whopping average return of​ 223%.

If you​ were to​ further invest a​ little time,​ go check out some great mortgage rates at​,​ you​ could even shave another few thousand dollars. Go ahead and invest in​ all the​ fancy funds Wall Street has to​ offer,​ but at​ least consider investing in​ your own mortgage.

If your still thinking shares are the​ way to​ go may be able to​ guide you​ in​ the​ right direction also.

Happy Investing!

Anthony Simon
Mortgage Investment And Interest Rates Mortgage Investment And Interest Rates Reviewed by Henda Yesti on July 02, 2018 Rating: 5

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