Suzie Says “Pay Off Your Home Mortgage”
Suzie Orman
But now and then she has a good nugget of information. Check out this short clip about paying off your home mortgage as soon as possible.
The only counter argument I can think of is inflation.
If you bought your house in 1980 for $50,000 and never paid off the mortgage (that wouldn’t be possible unless you refinanced the home loan along the way), the value of $50,000 today is a lot lower than it used to be 30 years ago.
But on the flip side, the mortgage interest tax deduction on $50,000 is rather small too. So maybe you should send in that extra $100 every month!
One resource I strongly recommend is How to Save Thousands of Dollars on Your Home Mortgage.
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January 31st, 2010 at 2:24 pm
I totally agree. My partner and I are focusing on paying off our primary home mortgage first. I pay the minimum mortgage payment on our rental properties because they are all cash flow positive and I want to use any extra money to pay off our home first. Nothing gives you more security that having your home paid off!
February 21st, 2010 at 2:06 am
This is a subject that is very close to my heart at the moment. I have the ability to pay off the remaining small balance on my mortgage right now…..but for some reason I am holding off doing so. I blogged about my reasons here…. http://www.mysipp.net/mortgage-freedom/
I guess my worry is that I am not leveraging “me.inc” enough.
March 9th, 2010 at 11:13 am
After a heated conversation with my accountant,I paid off my mortgage for the simple reason that your home interest, unlike an investment property, is not 100 % deductible. It is only deductible up to your tax bracket. In my case only $20 out of every $100 in interest was deductible.
May 14th, 2010 at 7:17 am
Suzie’s ideas may be simplistic but so is the logic of proper money management. So are people. 70% of people have an IQ between 85 and 115. That’s why the first law of business is to keep it simple. So simple is as simple does…Pay off your mortgage. First it is protection against inflation. A house is a house is a house in any market. When you pay it off you free up 30% of your disposable spending budget because you don’t need to pay the mortgage out of your income. For retirement you reduce your income needs by 30% because you have no rent to pay and you can cash it in and invest it to pay for the monthly costs at the “resort” (what they call the home these days). On the psychological level that is a huge burden lifted from your shoulders so that you can enjoy your golden years.