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Paying off your mortgage not right for you?

March 06, 2019

Here are some counter-intuitive thoughts:

  • If you won the lottery today would you put your money into an account that earns zero interest? When you pay off your mortgage, you reduce the interest you pay on your loan, but you no longer earn interest on the cash you paid, nor do you have that cash available for emergency use.
  • Remember, you must qualify to get cash out of your house. The time to get the cash is when you don't need or want it. The bank probably will not give it to you when you need it, especially if your earning power is impaired.
  • If you have a 6.00% mortgage for business or home, at a 25% tax bracket, you only have to earn more than 4.50% to get ahead. For once, Uncle Sam is on your side.
  • A $2,000 payment at 3% inflation costs the equivalent of $1,107 after 20 years, $823 after 30.
  • If you have a $250,000 mortgage and $250,000 in an easily accessible, secure side fund - is your house paid for?
  • If you have enough money in a side fund to satisfy the mortgage is it then a debt or a financial obligation?
  • Are Suzy and Dave right to be so vehemently and categorically opposed to debt?

If what you know to be true about finances turned out not to be true, how soon would youwant to know?