Speaker (Denzel Rodriguez) contrasts two approaches to mortgages: accelerating payoff to be debt-free versus intentionally keeping long-term debt ("never pay off") and investing instead. He states his personal preference for being debt-free but fairly presents the opposing online camp that advocates keeping 30-year mortgages, refinancing to reset the term, and investing the cash flow. He discusses risk arguments used by the "never pay" camp — banks calling loans, higher foreclosure likelihood when equity is low, and 2007–08 precedents — then argues that by 2025 legal protections and political constraints make mass loan-calls of prime borrowers unlikely. He gives a HELOC numeric example (house worth $700k, owe ~$400k, credit line $560k) to illustrate bank leverage concerns, and closes by recommending choosing and committing to a strategy that maximizes cash flow and that you will actually follow.
Chapters
Some of you in the room may never pay off your mortgage because you have no intent to pay your mortgage off. That's probably no one in this room, honestly. Maybe there might be one person, one or two people in the room, but for the most part, I lean more toward living a debt free life. On the, on the personal side, maybe I'll leverage some debt here and there, but for the most part, I don't want to have payments and I'm willing to miss out on opportunity costs to have the peace of mind of no payments for the most part. Everyone in this room probably leans that way for the most part. But there is a camp online. There are some financial professionals, some content creators that preach the never pay your mortgage off early. They preach 30 year mortgage, keep it, pay the fixed payment, invest, save your money. And then they'll even preach refinance that 30 year, reset the clock again, just keep having a 30 year mortgage. When you build up equity in the property, they educate you to refinance. One of the reasons why they think this way is because of how risk and ownership work. So if you're talking to someone or if you're listening to any content online where someone is coming from the camp of Denzel, never pay your mortgage off because you don't really own your home. Number one, even when you pay it off. Number two, from the bank's perspective, it's more risk for the bank to foreclose on someone that has a large debt balance compared to the available equity in the property. It's more, it's more risk, more cost for the bank to foreclose on that person over, let's say people in this room that have been accelerating their property for many years now, and you've got 3, 400 grand of equity built up in your home and maybe you only owe a hundred thousand, one hundred fifty, two hundred thousand. The bank can, there's a some sort of clause where they can call the loan on that property. So even though you've been faithful paying your mortgage on time, you got all this equity built up in there and all of a sudden the bank pulls the rug right from under you and says, hey, you need to pay us in full within 30 days that remaining balance of the 100, 200,000 that you owe. The reason why that bank would go after that person over the person that has a $500,000 mortgage with equity of only 550 in it is because it cost the bank too much for them to call a loan on that and then have to resell it again. Versus that 100 $200,000 balance with the $400,000 plus of equity or more. They can rebalance their portfolio, their balance sheet by calling those loans. There's an argument to be said there to be had because of what happened in 2007 and 08 where a lot of the banks were failing and loans were being called, HELOCs were being frozen. I can see the argument for that. I'm coming from a school of thought in 2025 that from 2008 to 2025 banks are no longer allowed to just do that to people who are faithfully paying their mortgage payments on time. That there is, there has been legislation that has been written over the years. There has been more of a longer notice for the client, more of a warning for the customer, more protection for the customer. For bank is going under. There's other things that can be done to protect the homeowner. I also come from the school of thought that in 2025, let's just say I've got a first lien HELOC with University bank and I owe a little over 400,000. Let's just say, let's say, let's say my house is worth 700,000, I owe 400,000, my credit line is 560,000. So I have a ton of equity in my home. And let's say I get something in the mail that University bank is going to freeze my first lien heloc, they're going to close it up or they require me to pay my loan balance in full in advance. And let's just say I'm not in a position to do that. Listen, if University bank is doing that to me, I'm a 95% sure that university bank is doing it to a hell of a lot of other customers. And if Universities bank is doing it, guess what? A lot of other banks are doing it. And guess what? If that's the case, chances are there's probably a civil war going on, there's probably civil unrest, there's probably rioting going on on the street and let's say that's going on. Listen, I'm armed to the teeth, so if you want to come take my home, come take it. So I come from that school of thought where it's like, what are you going to do? Are you really seriously going to try to pull the rug from a prime borrower paying his bills on time, Great credit, great credit score. I just, I don't see a world where that makes sense. And even if that is the case, who's coming to take my home. Like, who's coming? And if they are, well, they're going to be met with something because I'm going to say, listen, like, what are we doing here? We can negotiate. The other school of thought that I come from is, well, I'll just move my business to North Point or First Savings bank or I'll go to any bank that will do business with me. So I have multiple contingencies from the arguments of never pay your mortgage off because of like you don't really own it and all this stuff that the bank can do this to you and the bank can do that to you. And I'm like, Look, we're in 2025. If that happens, you're going to see a hell of a lot worse than BLM riots. Like a hell of a lot worse because you're going to see the white people come out when the white people protest. It's a different ball game, folks. And I'm just going to, you know, I'm someone that's going to pay attention, be aware and know what's going on in the political marketplace for banks to have the coones to try to do that to its members, to its customers. Like, I just, I don't see a world where that can possibly happen. Like it happened in 07 and 08. 0708 to me was like a tester for to see how much power the banks had and then government stepped in and they changed some things. So over the years, I'm just, I, I don't see how they can possibly do that now and again. It's just going to be a different ball game if they try to pull that again, Totally different ball game if they. Because they're going to be, they're just going to have bigger problems. There's going to be way bigger problems going on, I'm telling you. Civil unrest, riots, breakouts, all kinds of things. And that's where I resort to having to protect myself in that situation because I don't see a world where, whether it's military coming out, knocking on people's doors to kick them out of their home of prime borrowers, great credit, pay the bills on time. It's totally different if like I decided to say f you, I'm not paying my mortgage. That's totally different. Yeah, they'll get foreclosed on and police will come in and escort that person out of the property because it's no longer theirs because they weren't making the payment. I totally get that. But pulling the rug on a prime borrower, great credit, good cash flows, good income. Like, I don't, I don't see that. So I don't. You know me, you've never heard me advocate someone to not ever pay off their mortgage. But it's a strategy. I totally get it. I totally get why they're coming from that position. And then they'll use the invest instead. So instead of investing to pay off your mortgage, they just say, never pay it off and invest for as long as you live. Like, just keep investing, Keep all that money. When life happens, boom, you're able to handle it, have reserves, have savings, things like that. Okay, so we went over costly, some costly mistakes. Went over the first lien heloc. We went over all the mortgage payoff strategies. If you believe I missed one, go ahead and comment. I pretty much covered all of them. From what I understand, maximizing, you know, cash flow based on the strategy that you're. You're going to choose that you're going to commit to. That's the one that you're going to get the best results from. Even if maybe another strategy that's more complicated might yield better results, but you end up not doing it. So keep that in mind.
