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How I bought my Tesla Model 3 Dual Motor for free

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3silverISgold

Member
Dec 5, 2019
24
48
Placentia
I saved over $90,000 in future mortgage interest charges by using this method just in the first year.
I used the money saved to buy my Tesla Model 3 basically for free.

If you have a 30-year mortgage that is a few years old, then this method might work for you as well.

The basics:
You take out a HELOC on your house, then use the money to pay down some of the principal balance of your mortgage. Only borrow up to what you can pay it off within a year so you don't create an additional financial burden.
You can potentially save a lot of money on interest by skipping over many months of mortgage payments.

If I didn't take this route, then I obviously would have had to pay the full mortgage interest charges based on the payment schedule plus the cost of the Model 3 including financing cost.

During the COVID-19 era, many banks are shutting down a lot of the HELOC programs, but if you already have a line of credit or have a steady job with good FICO scores, there might still be opportunities out there for you to take advantage of.

I happened to buy a Tesla, but you can do whatever you choose with the money you save on your mortgage interest fees.
 

Knightshade

Well-Known Member
Jul 31, 2017
11,359
14,931
NC
I saved over $90,000 in future mortgage interest charges by using this method just in the first year.

How terrible is your mortgage that you claim you saved $90,000 in interest in a single year?

The average home in the US you'll barely pay 200k in interest over the entire 30 years of the loan.


I sa
I used the money saved to buy my Tesla Model 3 basically for free.

I do not think the word free means what you think it means.



If you have a 30-year mortgage


..and were concerned about interest, and had good cashflow, you should've just gotten a 15 year in the first place.


The basics:
You take out a HELOC on your house, then use the money to pay down some of the principal balance of your mortgage. Only borrow up to what you can pay it off within a year so you don't create an additional financial burden.


Not to suggest this idea is idiotic or anything... but if you could afford to pay down the mortgage that much "within a year" why not just make those payments direct to the mortgage company instead of wasting more interest with a second loan?
 

dmurphy

Woof.
Dec 7, 2018
3,396
4,596
New Jersey - Morris County
..and were concerned about interest, and had good cashflow, you should've just gotten a 15 year in the first place.

Not to suggest this idea is idiotic or anything... but if you could afford to pay down the mortgage that much "within a year" why not just make those payments direct to the mortgage company instead of wasting more interest with a second loan?

Bingo. We did exactly that 5 years ago - refi’d into a 15-year mortgage at 3% APR. Lopped about $275k in interest off the mortgage that way.

10 years to go. Past the point where any refi makes sense - even a 2% APR isn’t enough to make the closing fees worth it.
 

3silverISgold

Member
Dec 5, 2019
24
48
Placentia
How terrible is your mortgage that you claim you saved $90,000 in interest in a single year?

The average home in the US you'll barely pay 200k in interest over the entire 30 years of the loan.




I do not think the word free means what you think it means.






..and were concerned about interest, and had good cashflow, you should've just gotten a 15 year in the first place.





Not to suggest this idea is idiotic or anything... but if you could afford to pay down the mortgage that much "within a year" why not just make those payments direct to the mortgage company instead of wasting more interest with a second loan?


I live in Southern California and the purchase price of my modest-size house was $750,000. We refinanced to a 3.375% mortgage in 2016.
If my wife and I made more money back then, it would have made sense to convert to a 15-year loan, but we didn't have the means.
I used the money from heloc in 2018 to wipe out the next 10 years of mortgage payments based on the traditional mortgage schedule.
So with the $90k I saved on interest payments, I simply rerouted the money to buy a car.

The interest rate on the HELOC was lower than my mortgage rate at 2.99%. Plus, the advantage of a HELOC is that it has a revolving door.
The cost of the HELOC interest was somewhere between $3-4k since I made other purchases.
 

3silverISgold

Member
Dec 5, 2019
24
48
Placentia
Bingo. We did exactly that 5 years ago - refi’d into a 15-year mortgage at 3% APR. Lopped about $275k in interest off the mortgage that way.

10 years to go. Past the point where any refi makes sense - even a 2% APR isn’t enough to make the closing fees worth it.

That is exactly the same principle. Save money by doing some smart (re)financing, then use the money to get something of a higher value than making somebody else pocket fatter with interest payments.

Just this week I locked in a 15-year refi loan at 2.625%. 0 closing fees and will actually get back $2000 in credits.
Since I had made those additional extra payments the past 1.5 years with the HELOC, the new loan will be close to the previous monthly payments.

I have so far reduced the mortgage balance by more than $150k and there is a Model 3 sitting in the garage that is paid in full from the first day and cost me $3-4k HELOC financing charges for the entire 2019 at the lower rate than that of my mortgage interest. Just sayin'...
 
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Chasis

Member
Mar 3, 2018
54
37
SoCal
There is a misconception where one thinks "I paid off my mortgage early and and I saved XX in interest." This is true if you have a fixed income, or climbing some kind of corporate ladder and have some set of compensation schedule. If you are entrepreneur at mind, or know how to invest, heck I'll take that 3% fixed rate any day and drag it out to a 100 years if I can. It's a cheap loan. Jump on it and get a 5%+ return elsewhere.
 

TW14 9LF

2nd EV
Oct 28, 2018
289
256
SoCal
There is a misconception where one thinks "I paid off my mortgage early and and I saved XX in interest." This is true if you have a fixed income, or climbing some kind of corporate ladder and have some set of compensation schedule. If you are entrepreneur at mind, or know how to invest, heck I'll take that 3% fixed rate any day and drag it out to a 100 years if I can. It's a cheap loan. Jump on it and get a 5%+ return elsewhere.

Bingo.
 

vickh

Active Member
Dec 16, 2018
3,080
473
az
+ we no longer have the large mortgage interest deduction. Even then it was 20-30% of the interest.
 

dmurphy

Woof.
Dec 7, 2018
3,396
4,596
New Jersey - Morris County
The true misconception is only looking and comparing the interest rate itself. Paying interest of 3% of >$500,000 loan over 30 or 100 years is not cheap. Any sound person would, of course, invest the money elsewhere for higher gains through diversification.

Correct. Just adjusting the terms though doesn’t tell the entire story.

If I held my prior 30-year mortgage @ 4% to term, it would’ve cost me $766k.

By refinancing to a 15-year at 3%, it’ll be $522k.

That’s $244k in additional interest avoided.

Heck, even if I did a 15-year at 4%, it’s only $559k.

The question is - could I have earned more than $244k in 15 years with the extra $500/mo in my monthly payment? That’s 90k pulled “forward” from the back 15 into the front 15.

If I could’ve turned $500/mo into 245k or more in 15 years, the 30-year would’ve been the winner.

I’d rather be looking at being out from under the mortgage, personally.
 

MP3Mike

Well-Known Member
Feb 1, 2016
15,150
32,453
Oregon
We refinanced to a 3.375% mortgage in 2016

The interest rate on the HELOC was lower than my mortgage rate at 2.99%.

o_O So you are saving 0.385% on the portion of the mortgage you moved to the HELOC, which even if your mortgage balance was at the full $750k, and you could move the entire balance to your HELOC you would only save ~$3k/year. (And that savings would go down each year as you pay more of the balance off.) How exactly are you saving $90k again? o_O
 
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3silverISgold

Member
Dec 5, 2019
24
48
Placentia
Correct. Just adjusting the terms though doesn’t tell the entire story.

If I held my prior 30-year mortgage @ 4% to term, it would’ve cost me $766k.

By refinancing to a 15-year at 3%, it’ll be $522k.

That’s $244k in additional interest avoided.

Heck, even if I did a 15-year at 4%, it’s only $559k.

The question is - could I have earned more than $244k in 15 years with the extra $500/mo in my monthly payment? That’s 90k pulled “forward” from the back 15 into the front 15.

If I could’ve turned $500/mo into 245k or more in 15 years, the 30-year would’ve been the winner.

I’d rather be looking at being out from under the mortgage, personally.

Amen to that dmurphy. My goal too is to get out of mortgage debt as quickly as possible.
 

3silverISgold

Member
Dec 5, 2019
24
48
Placentia
o_O So you are saving 0.385% on the portion of the mortgage you moved to the HELOC, which even if your mortgage balance was at the full $750k, and you could move the entire balance to your HELOC you would only save ~$3k/year. (And that savings would go down each year as you pay more of the balance off.) How exactly are you saving $90k again? o_O
I saved $90k by borrowing against the HELOC to pay down my mortgage principal balance. At the time when I did this, I used about $66k from HELOC. This was a number that my wife and I were comfortable paying off within 12 months. HELOC has a revolving credit door giving you flexibility when you are in a financial pinch.
 
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KenC

Active Member
Sep 4, 2018
3,371
3,074
Maine
How expensive is this home to have saved you $90k in a year in mortgage interest? $2 to $3 million?
 

TMThree

Active Member
Mar 28, 2019
1,116
1,603
USA
Here's how I got my house for free:

I planned to buy 15 Bugatti veyrons but then I didn't. House was free based on interest saved.

This advice is every bit as good as OP's.

PS: Paid off my house, just installed solar on my roof. 100% coverage on my power including car. Still got to pay 5k a year for tax+insurance.

E7ZvRYa.jpg
 

Chasis

Member
Mar 3, 2018
54
37
SoCal
Here's how I got my house for free:

I planned to buy 15 Bugatti veyrons but then I didn't. House was free based on interest saved.

This advice is every bit as good as OP's.

PS: Paid off my house, just installed solar on my roof. 100% coverage on my power including car. Still got to pay 5k a year for tax+insurance.

lmao, I couldn't have word it better :D
 
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