Selling in 7 Years? Your Extra Payments STILL Pay

Five hundred extra a month on a $396,000 mortgage, and then you sell the house in year seven. Did those extra payments do anything? Yes: you walk away with $55,016 more at the closing table, and you only sent $42,000. Every dollar came back, plus $13,016 of interest the bank never got to charge. What you don't get is the lifetime number the calculator shows you ($254,275 of interest saved), because that one assumes you keep this exact loan for 19 years. So I ran the version where you sell. In this video: • What your extra payments are worth at the closing table: $363,663 owed without them, $308,647 with them, after 84 payments • What each extra dollar earned: the first $500 you sent is worth $838.61 at the sale, and the return works out to the loan's own rate • If prices drop 10% and you have to sell in year three: bring $15,896 to closing without the extra, or walk away with $4,219 with it • The same $500 a month in a top savings account and in the S&P 500 over seven years, and a bad last year for the market • PMI: extra payments move the date you can ask to cancel it from payment 107 to payment 48, but you have to ask, and the automatic date doesn't move • Selling in year 2, 3, 5, 10 or 15, once-a-year vs monthly, and what happens if you refinance instead • Why a 3% loan flips the answer, and the two years before a sale when I'd stop sending extra ⏱️ CHAPTERS 0:00 Did the extra payments do anything? 0:42 The loan 2:00 Year seven, at the closing table 3:17 What each dollar earned 4:14 If prices drop 5:03 The same $500, three other places 6:41 Quick word 7:34 The PMI you stop paying 10:26 Sell in year 2, or year 15 12:03 If you refinance instead 12:45 The next house 13:49 The 3% loan 14:37 The last two years before a sale 15:53 If this was me 17:07 Recap 📅 WORK WITH ME — I'm a licensed mortgage loan officer (NMLS 410420). Deciding between extra payments and saving for your next down payment? Book a free call and I'll run your loan and your move date: https://brokerdave.com/book or email ask@brokerdave.com 🧮 FREE EXTRA PAYMENT CALCULATOR — both schedules side by side; find the year you'd sell and compare the balances: https://brokerdave.com/extra-payment-... 📧 ASK ME A QUESTION — got a question but not ready for a call? Email me and I'll answer it: ask@brokerdave.com 📱 SAVE MY CONTACT — https://lurbee.com/c/david-lurvey 📘 MY BOOK — "DSCR Loans Made Simple: The Beginner's Guide to Financing Rental Property." Qualify on the rent, not your paycheck. Kindle + paperback: https://amzn.to/4gRPRDt SOURCES AND ASSUMPTIONS FOR THE FIGURES IN THIS VIDEO • One worked example: a $440,000 house, 10% down, a $396,000 30-year fixed at an example rate of 7.5%, $500 a month of extra principal from the first payment, sold after payment 84. Figures are principal and interest only: taxes, homeowners insurance and PMI are not included, so an actual monthly payment would be higher. Rates change daily and depend on your credit, down payment and loan; this is not a quote or an offer. It is the same math the free calculator runs. • PMI is priced off Essent Guaranty's published borrower-paid monthly rate card (740-759 credit, 85.01-90% LTV, 25% coverage: 0.38% a year). Your quote will differ. • PMI rules: for borrower-paid PMI on a one-unit home you live in, the Homeowners Protection Act (12 U.S.C. 4901-4902) lets you request cancellation when your balance reaches 80% of the original value, counting extra payments, with a written request, a good payment history and a value that hasn't fallen below the original (lender-paid mortgage insurance can't be cancelled this way); automatic termination at 78% follows the original schedule. Cancellation off a new appraisal (75% after 2 years, 80% after 5) is Fannie Mae / Freddie Mac servicing policy. FHA mortgage insurance (loans from mid-2013 on) runs 11 years with at least 10% down, otherwise the life of the loan (HUD ML 2023-05); USDA's annual fee runs for the life of the loan; VA loans have no monthly mortgage insurance. • The savings account is a top-tier 4.1% APY, taxed in a 24% bracket (about 3.12% after tax), held for seven years; savings rates move. The market side assumes the S&P 500's long-run average of about 10% a year (7% as the weak case, and one year of -20% as the stress test) with 15% long-term capital gains at the sale. The house side assumes 3% a year of appreciation and 7% selling costs. The refinance rate is made up for the example. None of this is a forecast. • Seller tenure: National Association of Realtors, 2025 Profile of Home Buyers and Sellers (median 11 years, a record). • I'm a mortgage loan officer, not an investment or tax advisor. Nothing here is a recommendation to buy any security. David Lurvey | NMLS 410420 | Cornerstone First Mortgage NMLS 173855 | Equal Housing Lender | educational, not personalized financial advice