30 Year Mortgage Paid in 77 Months (Velocity Banking)

About this video

• Video Title: 30 Year Mortgage Paid in 77 Months (Velocity Banking)
• Channel: VANNtastic!
• Speakers: Christy Van
• Duration: 16:17

Overview

This video explains how traditional mortgages are designed to benefit banks through interest accumulation and encourages viewers to take control of their finances. The speaker introduces a method called "Velocity Banking," using a line of credit to pay off a mortgage much faster than the standard 30-year term, demonstrating how this approach can save significant amounts of money on interest and reduce the loan duration.

Key takeaways

• Traditional Mortgages vs. Velocity Banking: The video contrasts the typical 30-year mortgage, which often results in paying more in interest than the original loan amount, with Velocity Banking. Velocity Banking uses a line of credit where income is deposited and expenses are paid, effectively reducing the principal balance and thus the interest accrued.
• Interest Calculation Misconception: The speaker highlights that the advertised interest rate on a mortgage is often not the true rate when considering how interest is calculated on the balance over time. For a 7.75% mortgage, the effective interest paid can be significantly higher.
• Accelerated Payoff Strategy: By making regular principal payments (e.g., $10,000 chunks) using a line of credit, the loan term can be drastically shortened. The example shows a mortgage being paid off in 77 months (6.5 years) instead of 30 years, saving over $180,000 in interest.
• Financial Empowerment: The core message is about financial literacy and taking control. The speaker urges viewers to understand their loan documents, explore options like lines of credit, and make informed decisions to build wealth rather than paying excessive interest to banks.