Save a Fortune On Your Mortgage

This faith and finance podcast is underwritten in part by Movement Mortgage.

Movement provides residential home loans in all 50 states. Founded in 2008, amidst one of the biggest financial meltdowns in American history, Movement set forth on a mission to create a movement of change in their industry, in corporate cultures, and in communities. So that a portion of their profit creates a long term positive impact in communities, both close to home and around the globe through the Movement Foundation and Movement Schools. It all comes back to their mission to love and value people. Learn more at movement.com slash faith.

.org. Now don't get me wrong, it's great to shop around for the best interest rates on savings. My point is that it's a whole lot better to pay attention to how much you're paying in interest on your mortgage because efforts to reduce it will pay off so much more. Just take a hard look at the amount of interest you'll pay over the life of a 30 year fixed rate mortgage.

And it should be all the incentive you need to pay it off as fast as possible. Let's say you take out a $375,000 30 year fixed rate mortgage at 7.3%. That's the median sales price for a home these days and an average interest rate. At the end of that term, you'll have paid just over $550,000 in interest, making the true cost of the home closer to $925,000. So with today's higher interest rates, it's more important than ever to get your mortgage paid off as quickly as possible. So let's say you take out that 30 year mortgage but decide to pay an extra $300 a month on principal. You might have to make some sacrifices to do that, but again, it'll pay off big.

How big? Well, if you pay that extra $300 each month, you'll pay off the 30 year loan eight years and three months faster, saving you, are you ready for this? $176,000 in interest. So you see, paying off more of the principal amount each month is huge, and it really needs to be a priority in your financial decision making.

There are four steps to getting there. First, you need a spending plan, not just because it's a good idea and everyone should have one, which is true. You need a budget because you can't start the process of accelerating your mortgage payments without one. And setting up your spending plan is now easier than ever with the FaithFi app. It uses the envelope system to make budgeting easy and it'll track your spending and reveal things you can cut to free up more cash.

For example, cutting back on your streaming services, limit eating out, put a moratorium on new clothes purchases, even if it's just for a month or two. If you need more incentive to tighten the belt, consider that saving just $25 a month and putting it on your mortgage will net you $22,000 in reduced interest payments in the example we gave before. Now, the next step is to determine just how much of that extra cash you can apply to your mortgage. You can even make it a budget category all by itself. The point is, anything extra you put on your mortgage now will be worth a lot more down the road, so make that number as big as you can.

Now, the next step is something anyone can do. It's using money that comes your way outside of your budget, as with a bonus or a tax refund. Put that unexpected cash on your mortgage principal as well as the surplus money you've identified in your budget. Now, if you haven't set up an online account with your lender, do that now.

Most lender websites make it easy to apply extra payments to the principal just by clicking a button or two. And while you're logged in, you'll be able to see the running balance of your principal, keep track of it, watch it go down as you make extra payments. That'll help you stay motivated. And remember, celebrate your progress along the way. And the sooner you start, the more money you'll save that can be put to better uses. Proverbs 21 5 says, slow and steady plotting brings prosperity, so start plotting steadily towards your early mortgage payoff. Now, while you're doing all of this, wouldn't it be great to know that you're actually helping to make the world a better place and expanding the kingdom just by paying your mortgage?

Well, you can do that with Movement Mortgage, an underwriter of this program. This is a decidedly Christian mortgage company that was founded amid the housing crisis of 2008 to help Christian home buyers and to have a positive impact in communities in the U.S. and around the world. Besides offering competitive rates, Movement gives its customers a chance to participate in, well, a movement of change. In a little over 15 years, the company has donated, you ready for this?

$377 million to projects helping local communities. Movement has 775 locations nationwide and can service loans in all 50 states. So if you're looking for a mortgage, we hope you check out Movement at faithfi.com slash movement.

That's faithfi.com slash movement. All right, your calls are next. The number 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith in Finance.

Stick around. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states guided by a mission to love and value people and a goal to redefine the mortgage process. Movement seeks to help others achieve their financial goals. You can find out more at movement.com slash faith. Movement Mortgage LLC supports equal housing opportunity. NMLS number 39179.

For licensing information, please visit NMLS consumer access dot org. Every day we hear life changing stories from listeners just like you who see money and possessions as tools to invite more people into God's kingdom. Instead of chasing wealth, you've chosen to embrace God as your source of love and provision at faith.

I were passionate about meeting people where they live and work through our national radio program app resources and Web site to influence widespread positive change in our culture. Please consider becoming a monthly partner at faith by dot com slash give. So glad to have you with us today on faith and finance.

I trust you had a great weekend and perhaps now you're ready to dive into those questions you were thinking about over the weekend related to your finances. Well, we want to help with that, encourage you along the way, take you back to God's word, help you understand a biblical worldview of money management, starting with the idea that God owns it all and you're a steward. And now the goal is faithfulness to whom much is given, much is required.

And so faithfulness is about being faithful over a long period of time, according to what God has entrusted to you. And we want to help you dive into those specific questions and concerns you have today, whether it's maybe related to your lifestyle, staying on budget, living within your means, which is really challenging now or paying down debt. Maybe you've built up some credit card debt just because lifestyle spending has gotten away from you in light of inflation and you want to know how do I get rid of that debt? Maybe you want to give more intentionally and wisely. Perhaps you want to consider giving even beyond just cash flow out of your assets.

Well, we can help with that. Or maybe it's thinking about your short term or long term savings. What about those changes in the I bond rates?

If you were an I bond purchaser back when rates were a lot more attractive than they are today, or maybe it's just thinking about the volatility in the stock market, whatever it might be today, we'd love to tackle it with you. The number to call today with your questions is 800-525-7000. Again, that's 800-525-7000. You can call right now. All right, let's dive in today. We're going to begin with Jay. You'll be our first caller in Nevada. Go ahead.

Hi, Rob. Appreciate you taking my call. My question is about nine years ago, I put together a will and in that to take care of my daughter and then also my mom, who we take care of. I bought a second home for mom to be in and I put her on the mortgage in order to get finance for it. Since then, I've paid off that home. She was actually on the title joint tenant and survivorship. And I didn't realize that at the time.

I might have messed that up. My question is, at this point, because she's in her mid to late 70s, would it be best for me to move to have her sign off like a quitclaim deed and just be able to move that back to me? Or I have a trust that I could also put that home in.

My daughter's grown and she's no longer and I'm adjusting the will. So I just want to make sure I'm making the right steps. OK, so let me make sure I understand here. So the home you actually purchased with your money, but you put your your mom on the deed. Is that right?

Yes, it ended up being there and I think I might have made a mistake on that. OK, so you, in a sense, made a gift to your mom of the value of the home because it was your money that went into the home. So you actually bought it.

So that's your purchase. But as soon as you put her on the deed, now that was a gift to mom because this is now mom's asset. And so you essentially gifted her the amount equivalent to the value of that property when you purchased it. And so you may want to talk to your CPA about that, because that would have involved you filling out a gift tax form, not because it would be taxable. You can gift up to 13 million dollars over your lifetime, at least based on the 2024 rules and regs. And it doesn't become taxable to anyone. There is no inheritance tax and there is no gift tax until you get above that amount.

So that would be the first issue. And then if your mom then gifts that back to you in the form of a quitclaim deed or moves it into a trust. That is your trust where you are the grand tour and you're naming the beneficiaries, then that's going to be a gift from her back to you at that point.

What is your ultimate outcome here? Who do you want to be the owner of this property? Either myself and my wife or the trust, just so that mom is taken care of in case the Lord takes me home first, and then for my daughter to be able to receive after we've gone to receive the rest of that. So it sounds like the trust is the place for it to go, because that way it's going to ensure that as long as the trust is written properly to both care for your mom in the event that you're gone, but also to care for and provide for your daughter once the three of you are gone, you and your wife and your mom, then all of that can be handled inside the trust. The trustee would be named depending on, it sounds like give an adult daughter so she may actually be the trustee, but ultimately, regardless of who the trustee is, it's going to be for your mom's benefit and then beyond your mom's life for your daughter's benefit or both.

And so it sounds like just getting as many assets as possible into that trust to serve all of those purposes is the right approach. The only thing you're going to have to talk to your estate attorney about who drafted the trust, and then your CPA about is whether or not there needs to be a recognition of the gift from you to your mom. When you bought a property and put it in her name, and then back to you when she gifts it back to you by way of your trust, just to acknowledge that those gifts occurred so you can, you know, be, you know, in good standing with regard to what actually transpired even though that may have not have been your attention. And then I think from that point, you're good in the sense that the purpose of the trust is to make sure that the assets are handled the way you want before if you're incapacitated before your death at your death or following your death if you don't want it all distributed.

You know, in full and you want it kind of parsed out over time to provide income to your mom and or your daughter so all of that should be in place, you just want to make sure that it's legally titled the way that it needs to which it sounds like it's going to be need to be retitled the property that is in the name of the trust, and then you want to make sure you're in good standing with regard to how you've communicated all of that to the IRS. God, you guys Yeah, it sounds like I've missed the gift part. So if I gift over and it gets back, there's no taxable event, but we've communicated exactly what we did, even though I messed it up, but it still works out to the correct outcome.

It sounds like what I'm looking for. I think that's right. Because gift for the tax form is 709. And it's going to just acknowledge that you've chipped away even though you didn't intend it to be and maybe the CPA knows where a way you can unwind it since that wasn't the intention and you're kind of reestablishing your ownership.

But if not, then you would just chip away at your lifetime exemption of $13 million in gifting and the same for your mom back to you. Great. Well, thanks for so much. Appreciate it. You have a blessed day.

All right. God bless you, Jay. We appreciate you being on the program. Well, folks, we're just getting cranked up here today. We're going to be taking your calls and questions on anything financial helping to provide you with sound biblical wisdom as it relates to your financial concerns.

So what are you thinking about today? The rest of the program is yours. We want to dive into the questions and considerations you have and help you apply God's truth. So call right now with your financial questions. The number is 800-525-7000. Again, that number is 800-525-7000. We've got lines open. Our team is ready for you. We'll get you on the air quickly and we'll be diving into those questions just around the corner after this break. Once again, 800-525-7000.

You can call right now. Before we head into our break, let me remind you, you know, as we look at God's word and think about our role as managers of God's money, we can pull principles out of Scripture that are practical, but they're also timeless. For instance, the big ideas that we want to communicate is first that God would be your ultimate treasure. But then as we get into money management, we want to spend less than we earn because that's the key to every financial success.

We want to avoid the use of debt because debt mortgages the future. We want to set long term goals because the longer term your perspective, the better your financial decision today. We want to have margin to fund those goals that God has given us and we want to give generously because giving breaks the grip of money over our lives. Well, I hope what we're sharing today is an encouragement to you and above all else, I hope it draws you into a more intimate relationship with the Lord.

We'll be right back. Are you looking for a financial professional who aligns with your biblical values? Certified Kingdom Advisors are trusted financial, legal or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice. You can find a local C.K.A.

professional in your area by going to faithbuy.com and clicking Find a C.K.A. Learn more and enroll today at chministries.org slash faithfy. That's chministries.org slash faithfy.

Hey, thanks for joining us today. Our goal here on this program that God would be your ultimate treasure, that we'd help you make money, a tool to accomplish his purposes as you live, give, owe and grow. Hey, by the way, our brand new edition of the Faithfy app is coming in just days. What is the Faithfy app?

Well, it's the place where you go. It's a smartphone app that you'd get in your app store to not only listen to broadcast archives of this program and jump into our community where you can post a question, get an answer. You'll also find the best content in biblical finance we aggregate from not only here at Faithfy and our team of writers, but Ron Blue and Randy Alcorn and Howard Dayton and so many others all in one place. But there's also our money management tool where I believe it's the best money management system out there. Julie and I use it daily.

There's no way we could stay on budget without the Faithfy app. We have digital envelopes set up for every spending category. Our transactions download automatically. The app is smart in the sense that it knows when I go to this restaurant, it goes in my food category. And when we shop here, it goes into a different category. It automatically places each of those transactions. But here's the beautiful part is that I can pull it up and know where I stand in every envelope at any moment in the day.

And so we can curb our spending if we need to if one envelope is getting out of control in a particular month. So you've got that real time information. Well, Faithfy 4.0 is just days away with a brand new look and feel. It's beautiful and a lot of new features coming as well. So now's the time to get it so you'll be ready when Faithfy 4.0 launches. If you want to download it, you can do a couple of things. Number one is just head straight to your app store, Google Play or Apple and search for Faithfy, Faith and Finance. Or if you'd rather just go to our website and find the link to download it in your app store, go to faithfy.com and click app. That's faithfy.com and click app and you get it downloaded, get it set up, create your envelopes. Well, when Faithfy 4.0 comes out, you'll be ready to go. All right, let's head back to the phones here.

We're going to go next to Oklahoma and welcome Ron to the broadcast. Go ahead, sir. Thanks for taking my call. I'm calling, I have a lot of questions, but specifically I'm calling about social security benefits. Unfortunately, my wife passed away in March. She was 60 years old. She was retired educator and drawing her retirement, but she was not drawing social security benefits. And my question is, is there a way that I can, when I start drawing, I will be 63 in July. Don't expect to draw social security for until 67, maybe later.

My health is good. So is there a way that I can apply for social security benefits and do something like suspend those and draw my wife while mine continue to grow? Yeah.

You know, it's a good question. So neither of you were receiving benefits. Is that right? That's correct. Yes.

Okay. And so you have benefits based on your own work record, of course. And she did as well. So you said she was a teacher and she didn't have any kind of elimination of benefits based on a teacher's pension or anything like that? That's correct. You know, the plan was for her to start drawing her social security benefits sometime in the future.

She maybe 63 or so was the 62, 63, something like that, but had not started drawing. Okay. Very good. Yeah. I mean, in many cases, a surviving spouse can to be, to begin receiving one benefit at a reduced rate and let the other benefit continue to increase. And so that would be something, you know, you could take a look at just to see if that might work out in your situation. You can, of course, only get one at a time. But the opportunity, you know, for you perhaps to take a spousal benefit early as a survivor's benefit and then switch is there. There are, you know, a number of provisions there that you would need to look at just to make sure that that would in fact be possible. I'm not saying for certain that it would be, but it's at least worth looking into, you know, basically the survivor's benefit is generally calculated on the benefit your late spouse was receiving or would have received at the time of death based on age and earnings history. And then, you know, your actual amount will differ according to your age and family circumstance. But there is this opportunity to collect one and then switch and get a higher amount.

So what I would probably do, Ron, is make an appointment with the Social Security office and just look into that further and see if they can help you analyze the options that you have moving forward. OK. OK. Well, I will do that. I really appreciate the information. Absolutely, Ron. And I'm so sorry to hear about her passing. I certainly know this will be a different season for you, but we'll be praying the Lord gives you just a real vision for what he has next for you as you enter into this season. And we'll keep you in our prayers, my friend. But thanks for being on the program. May the Lord bless you. Let's go to West Virginia. Hi, Ed.

How can I help? Hi and thank you for taking my call. I have a question of capital gain. I'm going to be sixty nine in November. My total income is from Social Security check. And I have a two hundred fifty acres of property that I am thinking about selling. If I sell, would I qualify for a zero percent capital gains tax, being that my income is below, say, forty thousand?

Yes, that is correct. So the capital gains rates for twenty twenty four, you know, if you were to sell this year, let's say it's based on your taxable income. And so if your income as are you a single filer or married filing jointly single.

OK. Yeah. So that threshold is forty seven thousand twenty five dollars. So if you if you have income below that ordinary income, then you would be at zero percent as a capital gains rate. So if I sell this for, say, like a half a million, I paid two hundred thousand for it in 2002. I would not have to pay any capital gains tax. That's correct.

So the first question is, you know, is it your primary residence? And to the extent that it is, you'd have this exclusion of up to two hundred fifty thousand in gains. But even if you didn't have that and let's say it was all a taxable capital gain. And so you said what the difference is, maybe three hundred thousand in profit that you'd realize. Is that right?

Yes. OK. And so a long term capital gain, which is a property that you've owned for more than a year. The capital gains tax rates that are applied to that gain are dependent upon your income, the tax based on your tax filing. And if your income for the year in which the sale occurred is less than forty seven thousand twenty five dollars, then your corresponding capital gains tax rate is zero percent. It doesn't jump to the next bracket from zero to fifteen percent until you get over forty seven thousand twenty five dollars in income. OK. And that means I would not be taxed on a three hundred thousand dollars profit. That's correct. Oh, wow.

That would be a capital gain, but your tax rate is zero if your income is less than forty seven thousand twenty five dollars. Yeah. And I have lived on it the entire time. OK, very good. Hey, all the best to you.

And I hope that was good news. Thanks for calling today. We're so thankful to have you with us today. I couldn't do this without my team, Jim Henry, Devon Patrick, Robert Youngblood and the rest of the crew here at Faith Buy. Have a wonderful day and come back and join us next time. Bye bye. Faith and Finance is provided by Faith Buy and listeners like you.