Financial Vehicle to help me pay off my house quickly?

Question

Hi All,

Just got into the business and just got my first house rented.  I have a 30 year loan I want to pay off in 15.  I am wondering what strategies there are out there to do that.

Is it possible to save say $200 a month in the stock market some way, such that in 15 years (or when the value reaches the payoff amount) I can take it out and not pay any taxes on it?  Is there a way to do this?  Right?, so the interest earned would normally be taxable, but I am using it to pay off an investment, so I am looking to see if I can avoid the taxes.  Kinda like a the 1031 exchange concept where if I were to sell this property and buy another in x days I do not have to pay taxes.

Is this possible?  Is there a better way, another way?

Dave Foster · Answer

@Cali Skier, That won't work unless you go into a vehicle like non-taxed munis or something like that.  You'll have a tax bill.  But saving money in an interest bearing or appreciating stock account is a great idea to pay off your house loan early as long as you are making more in return than the interest rate on your loan.  If not then you just as well pay the $200 extra right to the loan.

There's folks who have made lots of progress using bi weekly loan payments and extra principle amounts.

Your desire to be financially disciplined is great - keep it up!

AJ S. · Answer

Re-finance your mortgage into HELOC in first lien position, difference is compounded amortized interested vs. simple interest on average daily balance. Use the HELOC as checking account, pull money in/out of account, though most have 10 year draw period.

Cali Skier · Answer

Thanks, I appreciate the reply.  Always looking for a trick.  A roth would work for this, but I can't contribute more that allowed.