EnableMe and paying off mortgage faster

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Forums › Finance and wealth management › EnableMe and paying off mortgage faster

jonb

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#284527 27-Apr-2021 19:43

Reading this article in Stuff today: https://www.stuff.co.nz/life-style/homed/real-estate/124728108/can-i-pay-off-my-mortgage-in-less-than-10-years

Slightly confused about how paying a company $2000 to $7000 a year would help reduce the household spending to put towards the mortgage, am I missing something?

engedib

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#2698963 27-Apr-2021 19:47

This is just a paid, marketing article by the company she writes about.

KrazyKid

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#2698980 27-Apr-2021 20:42

I assume you have a good income but spend it as far as it comes in. The company provide coaching, budgets and plans tailored to your circumstances and you end up saving more than you spend on there fees.
I suppose it could work for some people.

freitasm

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#2699003 27-Apr-2021 21:53

"But working with them seriously costs $2000 to $7000 a year. McQueen addressed that “elephant in the room” within minutes of starting her mortgage-free spiel."

But there's no explanation in the article... But let's looks at some highlights:

"I’m lucky enough to have a mortgage of under $200,000. It pays to have been in the property market for a long time. My first house cost $105,000 (25 years ago) and I had family help – a gifted deposit. How people are expected to do it in today’s market is beyond me."

"I already own a share of a rental property. Leveraging off borrowing for new-build rental property is one of the tenets of the enable.me system. And, I have my KiwiSaver contribution set to the highest rate (10 per cent)."

"But if I want to pay off my mortgage in less than 10 years, it’s obvious I’m going to have to knuckle down. And in fairness to enable.me – and to Dave Ramsey, the Barefoot Investor, and all the other money gurus out there – I recognise that that is almost certainly not going to happen if I don’t commit to one of their plans."

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Senecio

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#2699013 27-Apr-2021 22:28

Spend less, save more. Put savings into mortgage.

If anyone would like to compensate me for my financial wisdom please PM me for my PayPal account.

Note: This is sarcasm, not financial advice.

Linux

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#2699035 28-Apr-2021 06:39

Make bigger mortgage payments than required ' This is not rocket science ' You would have to have rocks in your head to pay someone 2k 5k a year to tell you this when that 2 - 5k would be far better off on the mortgage

antonknee

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#2699083 28-Apr-2021 09:08

Article:

Afterwards, I condensed all I had learned into eight words to send back to her: “Stop frittering. Restructure your mortgage. Buy investment property.”

But “sign up with enable.me” is probably a valuable add-on.

And we wonder why every man and his dog is a 'professional landlord' and the housing market is so sick in this country?

Article: According to enable.me, if your income to mortgage debt ratio is 1:4, you should be able to pay off your mortgage in eight years.

Does the maths on this stack up? I assume this means your income:mortgage balance - in which case mine is pretty close to 1:4 and there's no way I could pay it off in 8 years even if it was somehow an interest free mortgage.

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freitasm

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#2699085 28-Apr-2021 09:10

I did shave four years of the home loan account by going from 4.5% to 2.8% rate while keeping the same repayment amount a few months back.

Didn't need an expensive financial advisor to tell me that.

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Linux

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#2699095 28-Apr-2021 09:27

My mortgage rate in Feb this year went from 4.19 to 2.29% kept the payments the same (Was paying more as it was) and this knocked 6 years off alone

Had to pay $0 for this common sense!

frankv

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#2699117 28-Apr-2021 10:03

"I already own a share of a rental property. Leveraging off borrowing for new-build rental property is one of the tenets of the enable.me system. And, I have my KiwiSaver contribution set to the highest rate (10 per cent)."

Getting *another* mortgage isn't going to help you pay off your first mortgage, unless you get more rental income than (expenditure+principle repayments+tax) on that second property. I wonder why new-build is an important criterion? But this is likely a recipe for disaster if you buy at the top of an inflated property market.

High KiwiSaver payments is obviously not going to get your mortgage paid off earlier, and, depending on interest rates, is probably a worse investment than putting the money on the mortgage.