Should I pay off my home ASAP on 6.25%/30yr as small biz owner?

6 Replies

I’m small business owner with no w2. Only loan I was able to qualify for my primary home was “business statement loan” with 6.25% interest rate. I purchased house 4 months ago and I put down 20% down on 149k house and my mortgage is $889/month, but I have been paying extra $3000 on principles, total of $3889 per month and I have 100k left on loan. Should I keep pay 4 times more on my minimum? So Loan will be paid off in 2 years or so???

Absolutly not! Work on qualifying for a conventional loan and get a 3% 30 year fixed conventional. Invest your money into something that makes more the 3%!

Promotion
Jamestown Invest
Build a well-balanced portfolio with CRE
Considering CRE Investing?
Download this whitepaper and learn about CRE investing from a manager with a 38 year track record
Learn More

That is incorrect; the only reason you cant get a conventional loan is if your self emplyment is so new that you don't have 2 years of tax returns. So you may have to wait a bit..

The other option is to get a loan with a family co-signer (parents?).

The question you need to ask to a lender: "how can we do this, what will it take?" and then plan accordingly.

@Marcus Auerbach

I have been self employed since 2017 and I get 1099 not w2. I have excellent credit score, but I’m not sure if I can refinance my mortgage for better rate. That’s why my plan was just to pay it off in 2.3 years instead of 30 years by paying extra $3k month while I can still save cash for some future deals. I have enough cash to pay off now, but I want to invest in other deals.

Originally posted by @Junji Yokota :

@Marcus Auerbach

I have been self employed since 2017 and I get 1099 not w2. I have excellent credit score, but I’m not sure if I can refinance my mortgage for better rate. That’s why my plan was just to pay it off in 2.3 years instead of 30 years by paying extra $3k month while I can still save cash for some future deals. I have enough cash to pay off now, but I want to invest in other deals.

Yes you can refi it, about 3% for a 30 year currently and under 2% for a 15 year! I went form W2 to 1099 in 2015 personally and a lot of my clients are 1099 and they still buy houses and get conventional financing.

You are much better off buying an investment property than paying off your personal residence.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you