Prepaying Your Mortgage

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Ralph: Have you ever dreamed a tossing
extra money at your mortgage each month?

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Maybe you had friends talk about
it and they told you about how much

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money they saved, or maybe the idea
struck you right out of the blue.

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Well, folks today we're uncovering the
benefits of prepaying your mortgage.

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And how it can supercharge your
journey towards financial freedom.

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And that's what we're all about here.

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What if I told you, you can save
thousands of dollars over the life of your

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mortgage by just paying a little extra.

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Listen today, folks.

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Welcome back to the Ask Ralph
podcast, where we help you master your

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finances from a Christian perspective.

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And today on this motivation
Monday, We're tackling the

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exciting world of home ownership.

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And mortgages.

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Specifically, we're going to explore
the power of prepaying, your mortgage.

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And see if it's a strategy that aligns
with your financial goals and values.

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So let's start with some basics.

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Let's say for example,
you have a $200,000 home.

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Your monthly payment at 30 years.

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That's a 30 year amortization.

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At 5% interest would be $1073.64.

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And it would take you
30 years to pay it off.

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The total amount of your monthly
payments will be $386,507.

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So that's what you'd be paying in total.

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For your monthly payments.

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So why.

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Are we thinking about
prepaying a mortgage?

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Well, let's break it down.

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The truth is folks prepaying.

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Your mortgage is like giving
your loan a swift kick.

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And it helps you get to
that finish line faster.

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Well, Ralph, what does it mean to prepay?

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Well, it's pretty simple.

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It means making extra payments beyond
your regular payment each month.

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And maybe if you can't afford
to do it every month, do it.

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As frequently as you can.

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And those, extra dollars go directly
towards reducing your principal balance.

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That's the original amount
you owed on the loan.

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So let's talk about the financial
benefits of prepaying, your mortgage.

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this is where it gets exciting.

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Prepaying your mortgage comes with
some incredible financial benefits.

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The first of which is you
save a boatload of interest.

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This is a biggie.

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Since your interest is
calculated based on what you owe.

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Hammering down that principle
means you'll pay substantially

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less over the life of your loan.

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That's more of your hard-earned
money staying in your pocket.

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Let me give you an example.

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I talked a few minutes ago about that
30 year mortgage, 5% interest rate.

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Your standard payments, $1073.64.

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Let's say, for example, you find
an extra a hundred dollars a month.

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And pay it towards your mortgage.

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That means you're only
going to pay $1,173.64.

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So a $100 increase.

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Well, what does that do?

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Well, first thing it did.

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It's going to save you $37,068.19
cents over the life of the loan.

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Now that means you're going to pay
that a hundred dollars every month.

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And you're going to save
over $37,000 in interest.

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Think about that.

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That's huge.

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Here's the other thing it's going to do.

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It's going to help you
own your home faster.

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Imagine paying off your mortgage
years ahead of schedule.

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I've had several clients
that have done this.

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It has led them to financial freedom.

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That's the power of prepayment.

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Think about all the things you could
do once your home is free and clear.

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Let's talk about the example.

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We had a few moments ago.

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In that example, where I had you pay
an extra a hundred dollars a month.

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Instead of paying that loan over 30 years.

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You're going to pay it over 24
years and nine months had saved

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you five years and two months.

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Hey, while we're here.

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Let's think about another example.

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Let's say you could afford to do this.

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Instead of throwing an extra
hundred dollars a month.

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Make it $200 a month.

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That would take your monthly
payment, the $1,273.64.

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Now understand this is just
principal and interest.

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This doesn't include your
escrows or anything like

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insurance and property taxes.

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But if you pay that extra $200
a month, Guess what folks.

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Over the life of the loan,
you're going to save $61,158.43.

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That's enormous.

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Over $61,000 saved.

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Over the life of the loan by finding $200
extra a month to prepay on your mortgage.

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And best of all, guess
what it did to the term.

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You're no longer paying over 30 years.

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Now you're going to pay for 21 years
and three months that knocks off eight

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years, seven months from your mortgage.

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Now, depending upon how you approach
prepayment, you might even get

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those monthly payments reduced.

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at some point of interest rates go down.

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You can potentially refinance your
house for a much shorter term.

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Now let's talk about the benefits of
prepaying from a Christian perspective.

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Because here at the Ask Ralph
podcast, we believe in managing

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money in a way that honors God.

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That's why we do what we do.

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Here's how prepaying aligns with
your Christian financial principles.

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Number one, stewardship.

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Prepaying demonstrates responsibility.

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And wise stewardship of the
resources God has entrusted to you.

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If you are saving interest.

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You're doing a good job
of being a good steward.

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The other thing, and this one is massive.

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It helps you get freedom from your debt.

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The Bible reminds us in Proverbs
chapter 22, verse seven, the

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borrower is a slave to the lender.

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I think I've said that a million times.

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Now in my podcast.

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But it's so very true.

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Prepaying puts you on the fast
track to breaking those chains

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of debt and they are chains.

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Debt will hold you down.

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Now, I'm not saying that
debt is a bad thing.

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There are very good reasons to have debt.

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But you have to do it wisely.

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And what that does freedom from that
gives you more freedom and flexibility.

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You can be more generous.

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You can support missionaries,
you can support your church.

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You can support your family.

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Another Christian thing.

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It does it give you peace of mind?

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There's something truly liberating
about knowing your home is yours.

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I've had so many clients come in to me and
say, Ralph, guess what I did this year?

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What'd you do?

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I paid off my mortgage.

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And you can just see
the pride in their face.

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And I've had clients that have taken
my approach and they've taken a 30 year

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mortgage and paid it off in 10 years.

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Now, of course, they're not going
to do a $200 extra month, but

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has really not that much more.

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And you can save.

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Months and months and years
and thousands of dollars.

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And think about that
burden that it unleashes.

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It can give you peace of mind,
allowing you to focus on your faith.

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Your family.

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And other passions that God places in your
heart, because you don't have that saddle

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of that mortgage debt over your head.

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So let's ask the simple question.

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Is prepaying rate for you?

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It.

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I sound like a no brainer.

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But hold your horses folks.

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There are some things you need to consider
and everybody's situation is unique.

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So I'm going to put a plug in
here for my services right now.

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I'm happy to have a consultation with you.

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You can go to the ask Ralph podcast
site, that's askralphpodcast.com/store.

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You can schedule a consultation with me.

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You're going to pay a consultation fee,
but if I can save you $60,000, I think

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paying a consultation fee is worth it.

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But everybody's situation is different.

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So let's think about some considerations.

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So number one, financial goals.

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You might have other priorities
competing for your money, like

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building a strong Emergency fund.

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Or investing for retirement.

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So those are all things we
have to take into consideration

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for your individual situation.

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You also have to think
about your interest rate.

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There are people right now that have two
and 3% interest rates on their mortgages.

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Well, if you have a rock bottom
interest rate, the money saved by

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prepaying may be less significant.

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if you can earn.

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Money in the market or investments
or CD's right now, the truth is this.

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You can go out to the market and buy CDs,
know, and banks they're paying five, 6%.

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Well, if your mortgage is 2%.

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I'm not sure that prepaying is
all that beneficial for you.

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So that's something you need to talk with
a financial advisor, somebody like myself,

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and look at your individual circumstance.

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And what we're talking about
your life circumstances, are you

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facing major changes that require
more financial flexibility?

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holding off on prepayment right now,
by be wise, like if you've got a child

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that's going into college, maybe that
extra a hundred dollars that extra $200

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a month needs to go for that college.

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And I understand that, and
that's an individual thing.

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So I always try to give you action steps.

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So let's talk about some action steps.

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So, how do you figure out if
this is the right path for you?

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Here's your action plan.

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First thing you have to do.

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And I stress this.

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Talk about this in my book,
mastering your finances.

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The first chapter of my
book is all about budgeting.

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You can get that book again at my
website, askralphpodcast.com/store.

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So you do a budget check and see how
much extra you could realistically put

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towards your mortgage each month without
derailing your other essential expenses.

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So if you say Ralph, I can
put $300 extra a month.

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Well then do it.

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We just looked at two examples where.

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An extra hundred dollars
a month saved you $37,000.

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And an extra $200 saved over $61,000.

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If you can find that in your
budget to do it, then do it.

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But, all of this goes along
with seeking guidance, talk to

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a qualified financial advisor.

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Who understands your goals and can
assess your total financial picture.

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you may have to pay for that service.

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Guess what folks.

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You get what you pay for in life.

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If someone can save you thousands of
dollars, then by all means, sit down

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with them, have a consultation with
them, have a consultation with me.

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I don't care where you live.

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Zoom has opened up the doors that I
can talk to people all over the world.

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And I do talk to people
all over the world.

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I have saved people.

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Thousands of dollars on their
mortgage by making an extra $50,

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$200, $300 a month in payments.

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And then you have to do the math.

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And that's what I would do.

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If I sat down with you.

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Explore those online mortgage
prepayment calculators.

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Hey, in preparation for our meeting today.

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This is what I did.

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I went online and I said, okay,
give me the average $200,000 home.

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What's the 30 year
fixed rate, 5% mortgage.

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And what if I pay an extra a hundred?

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What if I pay an extra 200?

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There's things are all out there.

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Folks are just there for you.

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To take a look at.

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So let's talk about what
we've talked about today.

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we talked about the benefits
of prepaying your mortgage.

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We talked about how much
interest that can save you.

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We talked about how much time that can
save you over the life of the loan.

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We talked about the Christian stewardship
portion to that, and that peace of mind,

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knowing that your home is paid for.

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Friends prepaying your mortgage can
be a fantastic strategy to save money.

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Paying off your home sooner and
taking control of your finances is a

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way that honors biblical principles.

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However, remember this.

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It's not about rushing into anything.

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You got to do your research.

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Consider your individual situation
and maybe even pray about it.

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Hey, always take your
petitions to God in prayer.

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He will give you direction and guidance
and maybe he'll put people in your life.

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Maybe I'm that person in your life.

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If I've impacted you on this
podcast, please do me a favor.

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Share it with somebody.

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If you know, somebody that's
struggling with their finances, do me

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a favor, share my podcasts with them.

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My goal is to reach people.

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If I can help one person.

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then I feel like I've done my job.

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I feel like I've done what
God sent me here to do.

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And if prepaying aligns with your
financial goals and values, prepaying

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00:11:27,188 --> 00:11:30,788
might just be the key to unlocking
financial freedom and living a

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life filled with greater purpose.

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And isn't that what
we're all trying to do.

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We're trying to get to what
God has for us in our purpose.

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And that's a wrap folks.

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Hope this episode has inspired you to
take a closer look at your mortgage.

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And how prepaying could
benefit your financial journey.

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Remember to check out our podcast page?

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I think I've mentioned it five times now.

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That's at askralphpodcast.com
while you're there, I encourage

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you to join our email list.

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00:11:54,758 --> 00:11:57,698
Every week, we're giving away
an Amazon gift card for $25.

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So you don't want to miss that
and share that with friends

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00:11:59,678 --> 00:12:00,818
so They can sign up as well.

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So until next time, as I always
say, Stay financially savvy.

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Find financial freedom and God bless you.

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Abundantly.