Mark’s Market Update – 2/16/2023
This simple mistake can cost you, literally, millions of dollars!
Don’t pay cash for a home, or for that matter, put tons of money down (the math works the same way in both instances).
Follow three simple rules:
1. Put the least amount of money down that…
2. You can get approved for that…
3. It doesn’t keep you up at night thinking or worrying about the decision you made.
There’s a difference between compounding versus amortization, and those two concepts move money in opposite directions. Amortization costs less and less and less over time while compounding earns more and more and more over time.
Don’t believe me? Follow this simple calculation. The cost of interest using today’s interest rates will be, over the next 30 years, $510,777. The potential of earnings, using the average S&P rate of return over the last 20 years, would be $3,246,598 (Yes, today’s rates are hovering at around 6.5% to 6.625% – they’ve been moving up during the last 10 days). So, if you finance the home – it will cost you $510,777, and free up the $400,000 to earn $2,736,000.
That’s assuming you NEVER refinance the loan to take advantage of a better interest rate.
FACT: Mortgage Advisors make Realtors and their client’s money. I help people develop wealth through Real Estate. Call me for a free wealth-building consultation.