Paying Off Home Loans Faster with the “All-in-One” Loan | Brett Johnson

Brett Johnson, a mortgage broker with Northpointe Bank and realtor with LoKation® Real Estate, with 25 years of experience in real estate, explores a new mortgage strategy all-in-one loan used by the wealthy to pay off home loans faster.

This strategy allows you to pay off your loan faster than the traditional 30-year mortgage and free up money for retirement and investments. 

It was 15 years ago that Brett first discovered this mortgage strategy. He describes why it appealed to him, how others can use this strategy to their advantage, and how it is different from traditional mortgages. 

Many are reluctant to utilize this ‘out of the box’ strategy because it’s not something they’re familiar with, it’s something brand new. Brett uses an online simulator to help clients understand that it isn’t magic, but math. Once they see the numbers, they can see that it is not only simple but extremely beneficial. 

The most common thing Brett gets from clients is “It scares me because it’s a monthly adjustable” – they don’t like that the rate changes. The answer to that is that this is a simple interest loan, not a compound interest loan, Brett says. Brett breaks down how to do the math, demonstrating how simple interest is different from compound.

[7:17] “So if you take 100,000 and you say the interest rate is 8 percent on that, simple interest. You take 800,000 x 8 percent and then divide it by what you want to know. Do you want to know the daily interest? Then you divide it by 365. In that case, you’ll come up to about $25/day […] Now let’s say you deposited 10,000 because you got paid […] your 100,000 just went to 90,000. Now the interest for that day is getting calculated on 90 versus 100. So as it starts inching up as you’re buying Chipotle, washing your car, paying the electric bill. That interest rate goes up a bit daily, but then here comes your next paycheck.”

Brett says that you should be asking ‘What will this cost me over time?’ Instead of asking ‘What’s my payment?’ ‘What are my closing costs?’ ‘What’s my rate?’

The mindset should be saving interest instead of paying it. 

Why isn’t refinancing your mortgage your best option? Brett explains:

[11:18] “Honestly, banks and brokers out there have us all programmed to refinance every five to seven years. Unfortunately, that doesn’t help you pay off the debt, it actually just resets the clock. And then they use fancy words like ‘Oh, let’s pay off some of this debt.’ You’re not paying off debt – you’re just moving it. And now it’s going to take me 30 years to pay that debt off.”

Not everyone can do the all-in-one, but everyone should be striving for it, Brett says. There are specific qualifications. Such as a 700 credit score and above, at least 15 percent of cash reserves, and more. 

Brett explains what you will want to do if you want to build wealth. He also explains that there are some 15 different ways to utilize this loan which can vary for different people. 

There are potential risks to this kind of loan strategy, but none that most people aren’t already taking in having a credit card. Brett walks through why it is worth it. 

Links

• Brett Johnson | LinkedIn
• Brett Johnson | Northpointe Bank