Why Your Mortgage Suck?!


In this video, we’re going to talk about
why mortgages are absolutely terrible and after this video you’ll never want
to have a mortgage ever again! hey what’s going on guys this is Sam
co-op one of the Kwak Brothers and in this video I’m gonna share with you guys
why mortgages suck and while you’ll never want a mortgage again after
watching this video now real quick and fun fact the word about the word
mortgage if I can point out to you guys the front part of the word morte means
death right this is why we use words like mortify mortal all represents death
okay gauges the word gauges means to touch to to have a promise so this is
why we use the words like engage so if you combine those two words it
essentially means death pledge okay right right there and already we’re not
not to get started with the word mortgage but I’m going to show you guys
mathematically and the financial aspect as far as why more we just suck and
banks designed this so that you can stay in debt forever and we don’t want you
stay in depth forever we want to get you out of the debt pay off your mortgage as
fast as possible right so I’m gonna draw something for you guys
give you guys a little bit of basics into a mortgage and how mortgages work
and this information can be found in what’s called Truth in Lending statement
so if you recently got a mortgage or if you’re about to get a mortgage make sure
you read over that because it’s gonna show you all the math behind how
mortgages work so I’m gonna draw something called the amortization graph
okay and a lot of you guys are smart watching this video you guys are you
guys have a good head on your shoulders so you may know this but I want to make
sure that everyone understands where we’re going with this and the dangers
even for you guys that know what this is I want to show you the dangers behind
this so I’m gonna draw this line graph here the horizontal axis represents the
time that you spend on paying off a mortgage so in this video I’m going to
deliberately focus on the 30-year mortgage because that’s the traditional
more typical term as far as the average Americans what they get so at the end we
have 230 years and here we got 0 years so that represents you know just getting
started type of thing on the vertical axis this is your monthly payment okay
so this represents your monthly payment and this is in dollars right so in this
example let’s say your monthly mortgage payment your principal and interest
payment not counting your property taxes and insurance let’s say this is thousand
dollars a month okay I’m gonna go with more the average I know for those who
are in California and New York may have a higher monthly payment but stick with
me here this is just a math and this is just an example I want to show you guys
okay okay so this red line represents your interest payment over time the
amount of interest at out of the thousand dollars okay the amount of
interest that’s being paid okay on the blue line is your principal balance okay
so do Ralphie the the paying off right throughout the progress the longer you
pay off the mortgage more and more of your monthly thousand dollar payment
gets to go to your principal so we want the principal principal is what we want
okay the more principal we pay off the more equity we gain obviously the
interest really doesn’t do much for us the interest goes right to the bank now
one thing you’ll notice right away is that in the early parts of the month or
the earlier parts of your mortgage lifecycle vast majority of it is going
towards who the bank write that interest so out of thousand dollars and I’m just
gonna drop a make this number up but out of a thousand dollars more than likely
about eight hundred dollars of that is gonna go towards your DNP interest okay
so the moment you get your mortgage okay the first month’s payment vast majority
of that is gonna go towards a bank okay principal okay you may only collect
let’s say two hundred dollars of that which makes up the total of thousand
dollars a month okay so over time you’re getting more principal little by little
okay every the next month you get a little bit more principal the next month
together more principal so this is what we like to call front and it interests
because on the front on the early part of the mortgage vast majority that is
going towards the interest it’s kind of like the bank’s way of saying hey we’re
letting you use our money but we’re gonna collect our fees first does that
make sense so it’s a bank it’s the bank’s way of mitigating their their
risk but it kind of sucks for us consumers borrowing because what if you
know what happens we get to you this part I’m gonna switch back to the black
marker here these marker okay so what happens we get
to like this part right here let’s say this is our like 10 to 12 year mark so
to two things generally happen the first thing is you may end up moving right job
changes you may want to move you know you got a new job somewhere else now
you’re you’re being asked to move there so when you move and you sell the
property you sell your home and you go and buy a next one
what kind of sucks is that you’ve only built build so much of the equity and
number two you don’t get to continue paying off where you left off when you
go buy a new house and get a new mortgage guess what you start all over
back to square one okay and you have to pay all this interest all over again and
I think that’s one of the big reasons why today here Americans and Canadians
watching this we don’t really truly get to build wealth because we always end up
moving in it’s it’s it’s a new trend we have to move
you know because our job changes and job changes are more frequent now than ever
so that’s one reason why you’ll never fully finish paying the mortgage off
without building up much principle the second reason might be is you are
tempted to refinance now this this might not be your fault and I won’t put a
point display to you guys but typically what happens is when you make it to the
10th or the twelfth even as early as your eighth year paying off your
mortgage you know your banker might call you you know your bank might give you a
call and say hey mr. and mrs. borrower congratulations you’ve been paying your
mortgage on time for the last 8 to 10 years we want to reward you with a
promotional interest rate and get your monthly payment down from thousand
dollars to 950 dollars now unfortunately a lot of people look at that thousand
dollars versus 950 and they realize oh my gosh I can save 50 dollars a month
that’s amazing but the trick of the trick here guys is that when you do
refinance let’s say from thousands of 950 because you’re saving $50 a month
what happens is used and you restart all the way back here’s from to square 0
essentially and you’re having to pay all this interest back again ok this is a
this is a problem and the challenge that we have
today as Americans every 10 years of refinancing it what happens well we
never get to the finish line ever because we’re always constantly tempted
bet hey you should refinance because you’re gonna get a lower monthly payment
hey you should refinance because your interest rates lower in fact in a video
that I want to recommend in just a sec I’m going to show you guys why interest
rates really don’t matter but it’s all about paying that sucker off okay pay
the principal balance off and you guys are going to start to see that you’re
gonna skip towards paying more principal off so guys if you do end up refinancing
just know the consequences of refinancing because when you do you
start all over you’re paying all this back to the bank and this is why banks
want you to have a wants it keep you at 30-year amortization because they know
in ten years they can get you to refinance or they can get you to buy a
new home and yet to start all that over now you might be thinking man are is
this like is this it like are we stuck with this is this the only system that
we have available to buy a home and to move and and have this mobility well
fortunately guys there’s a strategy called the debt acceleration strategy
which I’m gonna go ahead and leave a link to another video that I made on how
to pay off your mortgage as fast as five to seven years without having to put
more money in or sacrificing your lifestyle so I know there’s a lot of
message out there saying if you want to pay off your mortgage first you got to
cut back you got to save if you got a scrimp right none of that guys I’m gonna
show you guys how to pay off your mortgage as early as five to seven years
saving you up to sixty seven percent of the interest and I’m gonna show you guys
how to pay off more the principle without having to sacrifice more money
into it so I’ll leave that video link down to the link description go and
scroll down just a tad and you’ll see that link right there click on it watch
it I’m gonna show you guys how to pay off
your mortgage really really fast without having to play the game of refinancing
selling and and using the sturdy your graphing and one thing that I didn’t
mention guys if you follow what the banks are telling you to do okay if you
stick with the whole entire thirty years you don’t move you stay in one place for
thirty years which is a long time you’ll actually typically end up paying double
the amount that you would have if you just bought it cash
right let’s say you bought a home for $150,000 on 5% interest and a 30-year
mortgage you’re more than likely going to end up paying close to $300,000 total
and that’s with interest so this is why I’m not a big fan of the mortgage this
is why I’m steering people away from the mortgage again it’s your choice you can
you know donate some more money to the banks like if they need it or you know
you can be generous I’m a generous guy so we can keep on being generous and
paying more to the to the bank or you can you can use my strategy that
acceleration strategy pick up more principal build more well pay off your
mortgage faster so that you don’t have to fork over more interest than you have
to cool all right guys I hope this video
was helpful for you guys I’ve seen the next video and I’ll see in the next
video take care hey guys it’s Daniel and this is Sam we are the clock brothers I
hope you guys enjoyed that video if you want to see more content value that we
put out like this what should they do Sam go and hit the subscribe button and
also hit the bell icon so you guys get notification for our upcoming videos
that’s right

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