Paying off your Mortgage early
Seems to me that if one could pay off their mortgage early (earlier than 30 years) it would be a Good Thing (tm). The argument that the tax write off we (American's) get for paying mortgage interest is specious. You get a $0.35 tax break for the privilege of paying the mortgage company $1.00. How is that useful? If I pay $10,000 in a year in just interest, I get to (this is a simplification, really I adjust my gross) write off $3,500 in tax, but I'm STILL out $6,500. That $6,500 could be working elsewhere.
I googled some, thinking the experts on tha intraweb would have something useful to say. This only confirmed that I can get better advice from any public bathroom's wall. Note "Ask Kim" provides different wisdom based on the season.
I did like these reasons though:
Here are a few reasons for Paying Off Your Mortgage Early:
- You want more than anything to be 100% debt free.
- You want to have more choices and options for your future and no debt gives you this option.
- You want to retire early. With no mortgage payment, you can save up for retirement faster and quit sooner.
- You want a guaranteed rate of return. Paying off your mortgage guarantees you that savings rate. Investing in the stock market can never guarantee you anything.
You don't itemize but take the standard deduction. You live in Canada or another country where these is NO tax benefit to carrying a mortgage.
- You are disciplined enough that once you have paid off your mortgage, you will invest the same payments into a retirement fund until you have enough to meet your retirement needs. (Remember, with no mortgage, your required retirement income will be greatly reduced.
These resonate with me. Why sell a house that's appreciated 200% when a comparable house has ALSO appreciated 200%? I figure
99% 97% of Americans that own homes also have a mortgage (An official out-of-the-butt-made-up-but-must-be-true Scott Statistic) and that debt fuels the economy. I haven't the chutzpah to go off the grid, but paying of my house would be a start, at least we'd be off the "debt grid."
Even making one extra payment a year can trim SIX YEARS off a 30 year mortgage. Of course, to do this one has to stop consuming. I wonder if a significant number of folks stopped drinking Frappacinos and put the extra money on their mortages if the economy would grind to a halt.