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Should You Make The 20% Down Payment For a Property?



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as a beneficial for you to put down the

20% of your money for a down payment

that's the topic for today's episode and

without further ado let's dive in hello

everyone and welcome back to another

episode for those who are tuning in for

the first time this is your channel for

real estate education so today's episode

will be all about the 20% now I'm not

sure if you're in the process of buying

a property or probably you have already

gone through it but regardless you have

probably done some research into what

your options are right and during that

research you'll probably realize that

they are a lot of different mortgages

available in the market requiring you a

different type of down payment so to

speak right so you have the loans that

will require you to put down a 5% some

of them are 10% and some of them are a

20% and I've heard a lot of arguments

justifying why putting the 20% down is

actually a better deal one because you

get more equity into the property and to

because you get to eliminate the need

for a PMI and if you don't know what a

PMI is it basically stands for private

mortgage insurance and it's required for

all mortgages where the buyer is

actually putting less than 20% down for

the down payment now I'm not here to

question whether the five for the 10 or

the 20% down it's better what I'm here

is to sort of like I want to challenge

you to look at things a little bit

differently right so recently I was

reading a book from Robert Kiyosaki and

he was actually sharing his viewpoint

about people who actually put down their

20% and that goes as follow people who

were actually paying 20% down for the

down payment of the house they're in

fact paying a lot more than that they're

not paying just the 20% now before I

dive into the Nitty Gritty right I want

to show you something that I have inside

my computer so that you can actually see

the breakdown of how much of your income

is actually taken out before you got the

final check or the

final payout in your hand so I'll see

you inside my computer okay so we have a

paste up here some of it might call it a

earning statement but in essence they

sort of like me the same so I'm sure

that whenever you get paid right or

simply through a regular check that you

get every two weeks or every 15 days or

so it will pretty much look like this

right so you have the company address

whatever your employee ID and then your

name your social security and then one

through one are you getting pay and one

is your check being issued right so as

you can see here you will have the

number of hours that you work and then

how much you actually earned that's what

you're getting paid for these number of

hours that you're actually working right

but then when you look at the

withholding or the deductions column

then you will see all kinds of taxes

coming out of your paycheck right so for

example you see the state taxes whatever

the FIR compensation you may have so for

example in here you will see state taxes

federal taxes some of you might have

city taxes some of you might have

Medicare cost so all of that it's gonna

add up to basically this amount so you

are making this working but this much is

actually being taken away from your

paycheck because you have to pay taxes

right so if we were to add up the math

here right we're talking four hundred

ninety nine point sixty two divided by

two thousand three hundred and seven and

sixty nine tenths and we're talking

about roughly 22 percent that you're

paying off and taxes right and that

amount that is taken away from you may

vary depending on your income bracket

and if you're curious here's a table

right here right from nerve wallet and

don't worry I'm gonna give you the link

down in the description box below but

take a look at this right depending on

on your tax bracket where you're filing

as a single married filing jointly or

finally in separate

or whether you are a head of household

these are the different tax brackets

that you will fall into depending on how

much you're actually making a year right

so let's say for illustration purposes

we are going to assume that you may

$50,000 in the year and when you're

making $50,000 filing as someone who is

single your tax bracket is 22% so let's

remember this number and I will see you

back outside and the bore alright so

hopefully you learn a little bit more

about what's actually taken out of your

paycheck and we talked about two numbers

right we talked about 22% and we talked

about a salary of 50,000 two percent tax

bracket and we have a salary of 50,000

annually so let's say for example that

yes this is what you're making and that

a 22 percent is actually taking out of

your salary and that numbers actually

equals to $11,000 now let's say for

example you saw a house a beautiful

house right that you wanted to buy and

the price that you're willing to pay for

the house is $100,000 right which means

that 20% of it is equal $20,000 so the

way Kiyosaki looks at this number is

that now instead of you just paying

$20,000 you are actually paying if we

were to add these two numbers together a

two number of $31,000 you think you're

paying $20,000 but in reality you're

paying $31,000 why because this amount

was already taken away from you before

you even got paid so you're actually

using after-tax money to be able to buy

the house right so now you're probably

thinking well so what are the choices do

I have like I can't just invest with

pre-tax money right so does that mean

that a house is about investment

I'm doing something wrong here not

entirely he's just helping you or he's

just sharing his point of view as to why

this down payment it's a lot more than

what you think your pain and that's when

the concept of opium always comes in

right so Robert Kiyosaki is a big fan of

opium meaning other people's money right

and what other people's money so other

people's money is basically money from

your credit cards right it could be

money from a cash cow refile

from a HELOC right so if you guys have

no idea what these are or what I'm

talking about I'm gonna leave you a link

down here in the description box below

but in the meantime bear with me so that

way you can get the most out of this

episode why is it that a credit card is

consider other people's money well

you're using the bank's money right

using the bank's money to invest for

that down payment and your property

right a cash or refi even though you're

using the equity of some of your

properties it is still cash that is

coming from the bank right and same

thing with a HELOC you're using the

equity of your home but at the same time

it is money that is given to you from

the bank and what do you think that bank

is getting that money from it's getting

that money from people who like to save

would like to open bank account and

wants to their money in there and

what the bank does is that they're

taking that money out of those accounts

and they are investing it with you right

they're giving you the opportunity to

take $20,000 out or $80,000 right

depending on how you want to look at it

whether you want to get the mortgage

with a bank or whether you want to use a

HELOC or a cash every five for the

$20,000 right in essence it's money that

is sitting there from other people and

the bank that's given it to you of

course

at a rate right you have to pay a

mortgage rate a mortgage interest rate

and then based on that rate they're

making their money back and as you're

repaying that loan they're taking that

money and putting me back into the bank

account and so on and the whole cycle

repeats now if you're probably wondering

okay but then what happens if the person

wants the money tomorrow well that's

going to be

topic for you to find out and I'm gonna

leave you the link here down below so

you can actually check it out and that's

in essence what that is right if you're

liking this episode so far do not forget

to hit the like button right here so

back to the board right so credit card

cash a refi HELOC that's entirely the

concept of other people's money you're

using this amount for the down payment

and at the same time the remaining

$80,000 that you need you are mortgaging

in that amount right you're going to the

bank and say hey I need a mortgage for

the remaining amount I have $20,000 to

pay down which you where you think the

bank is gonna get that remaining $80,000

strong they're gonna get it exactly from

the bank right from other people's money

so it's a way to shift your thinking

it's a way to shift that mentality and

if you're probably wondering well now I

have two loans or two mortgages to worry

about that's why you need to learn a

little bit more about the different

concepts of good debt versus bad debt

and how to use it to your advantage and

if you're curious and if you want to

find out don't worry there's a link down

here in the description below for you to

find out and that's it that's pretty

much all I have for you and while I have

you here remember some of the episodes

that I mentioned before

well I pick one right here so that way

you can actually check it out and

hopefully will help you complement

whatever you're learning over here and

hopefully you enjoyed it and will not

forget to subscribe and I will see you

soon the next time bye bye