I just read a Financial Samurai blog post where he has come up with a “5-year rule” that states that it take’s 5 years of saving in 401k to generate enough money to pay off the mortgage. He had previously posted a blog called “Pay Off Your Mortgage in Five Years”.
When I turned 31, I decided it was time to pay off my mortgage. Five years later, I did it . . . And with a 401k loan! Yep, you read that right. You’re in the bonus round, so listen up and listen up good.
This 5 year rule can save you hundreds of thousands if not over a million dollars.The basic principle is to take your mortgage balance, divide it by five and do that many years less of payments. This is where it gets tricky because math and budgeting can be difficult.First let’s figure out the $85K house we used in the example above:
I’m sure you’re looking for an answer to a very simple question, but maybe it’s not so simple. So here’s how this is going to work. I’m going to give you the algorithm and the math, but before I do that let’s cover some basic of 401k rules and regulations that are applicable to early 401k withdrawals and age restrictions.
It can be done. Find out how here ;).
The Top Ten Ways to Payoff a Mortgage with a 401k 5 Year Rule
Introduction:
If you’re looking to pay off your mortgage in 5 years, it may be helpful to know the top 10 ways to do so. This will help you make an informed decision about which method is best for you and your financial situation.
How to Pay off a mortgage with a 401k 5 Year Rule.
To get a mortgage with a 401k, first you’ll need to figure out how to pay it off in five years. This is based on your current mortgage payment and the average life of a mortgage. To find out, take the following steps:
You can start by figuring out how much money you owe on your mortgage and compare it to the average life span of a mortgage. Once you know that, you can work out a payment plan that will get you closer to paying off your mortgage within five years.
The best way to do this is to use an online calculator or robocarer. The calculator will help you determine your monthly payments and will also give you advice on ways to save money along the way.
Once you have a plan, set up automatic payments and make sure your lender knows about it so they can adjust their interest rate according to your progress. You might also want to consider bankruptcy protection if debt snowballing becomes too unmanageable.
How to Pay Off a Mortgage with a 401k.
In order to pay off a mortgage over a 5-year period, you will need to follow a few simple steps. In Subsection 2.2, you will learn how to make a payment on your mortgage and reduce your mortgage payment. You can also do this by using a 401k as an investment to help pay off your mortgage faster. Finally, in Subsection 2.3, you will learn how to save money on your mortgage by doing things like reducing your spending or making changes to your home’s layout. This will help you pay off your mortgage quicker and save money overall!
How to Pay Off a Mortgage with a 401k.
To pay off a mortgage with a 401k, you need to follow a few simple steps. First, take advantage of the fact that 401k distributions can be used to pay off your mortgage. Second, make regular payments on your mortgage and use the funds to reduce your payment on your mortgage even faster. Third, consider using the money you save from reducing your payment to pay off your mortgage sooner. Finally, make sure you have enough saved up in your 401k to cover any future down payments on your mortgage.
Conclusion
Paying off a mortgage with a 401k can be an effective way to reduce your monthly payments and save on your mortgage. By following these simple steps, you can make a payment on your mortgage that is sustainable over the long haul.