Economy and paying off mortgage???

[Tink-n-MrIncredible]

Given the economic state of the whole US. How important do you think it is to pay down/ pay off the mortgage quickly? Do you think it is better to pay the mortgage as usual and put the extra into savings? I would love to know what other think on this.

 

[university]

As a DR fan, I think having 6 months worth of expenses saved up is plenty, then it's time to pay down that mortgage as fast as humanly possible.

 

[crjack]

Given the economic state of the whole US. How important do you think it is to pay down/ pay off the mortgage quickly? Do you think it is better to pay the mortgage as usual and put the extra into savings? I would love to know what other think on this.

I think it depends on a lot of factors such as interest rate and amount of mortgage, how far into it are you, job security and most importantly your overall financial situation such as current savings, retirement accounts, etc.

Equity in a house isn't liquid money that you can access right away so you need savings you can get at for bills if you were to lose your job. You also need emergency $$ for car repair, home repair, etc.

Lots of people here have been disciplined at paying off their mortgages and I think that's great but I would only do it if my other accounts were in good shape first.

 

[punkin]

I can only speak to my own situation. With my interest rate currently at 3.25% and housing prices plummeting, I am not in a rush to pay off anything.

 

[NY Disney fan]

I can only speak to my own situation. With my interest rate currently at 3.25% and housing prices plummeting, I am not in a rush to pay off anything.

I totally agree! Paying my mortgage quickly is not a priority, My priority is 1.) staying employed 2.) saving up emergency money and retirement 3.) enjoying life. Everything else can wait.

 

[bettymae1121]

Paying off the house early rather than saving the money isn't a bad choice...it's just not always the best financial choice. I think if you have no other debt, there isn't any pressing economic reason to pay off your mortgage ahead of schedule. Personally I'd rather have that money more liquid and (relatively) easy to get to in times of need. For example, if something happens and you need to pull equity out of the house, you'd need to either sell the house or get a HEL or HELOC. Selling can take months or even a year (or more) and getting HEL or HELOC may not be possible if the reason you need the $$$ is because of job loss. But if that money is in a bank or investment accounts (invested in safer things like bonds if peace of mind is what you're looking for) you can pull the money out and have it in a week, and no worries if you're unemployed.

That said, often paying off the house makes some people sleep better at night, which is something that is hard to put a price tag on.

Like I said, it's not that paying off the house is a bad thing to do. There really isn't a wrong answer to this and an individual, after weighing all the options, should do what makes sense to them.

 

[lakelandgal70]

Like everyone else seems to be saying it is individual choice. We did it because if something were to happen with DH job our house would be paid off. They can't take it away. That to me was worth it. Sure could have put that money somewhere to invest but I felt this was the best decision for us. And I think everyone has to do what is right for them. What one person does may not be right for another.

 

[lisaross]

i guess if u have all your other funds filled then why not. besides savings, emergency savings, college, reiturement etc. what about a new car fund...home project coming up etc.

my goal is to have it paid off by the time i'm 50 years old..So i will be paying it off about 6 months early...

 

[blanq]

I am in no hurry topay off my 3.75% mortgage. We prefer to continue plowing money into our retirement accounts instead of paying off our mortage at this point.

 

[RitaE]

I have one kid in college and one a Senior in High School. My focus right now is keeping them student loan debt free and maintaining our retirement funding.

With the rate down around 4% and less than 10 years left, it just doesn't nag at me as a priority.

 

[Kathi OD]

As a DR fan, I think having 6 months worth of expenses saved up is plenty, then it's time to pay down that mortgage as fast as humanly possible.

As someone who has just lived through a 2 year lay-off, 6 months is nowhere near enough to have saved in an emergency fund during difficult economic times.

But to answer the OP, it's an personal decision whether or not to pay off the mortgage. If t were me and the mortgage rate is low, I'd keep plowing money into savings and take my time paying off the mortgage.

 

[Jeff_G]

I like the Dave Ramsey steps they make the most sense to me;

#1 Save up $1000 for a basic emergency fund
#2 Pay off ALL debt (except the mortgage), credit cards, auto loans, school loans
#3 Save 3 to 6 months of expenses as a real emergency fund
#4 contribute 15% of your income to retirement accounts
#5 contribute what you need to the kids college fund (so they wont have debt)
#6 Then Pay off house
#7 Build wealth, Have fun and Give

 

[Mary•Poppins]

I am in no hurry topay off my 3.75% mortgage. We prefer to continue plowing money into our retirement accounts instead of paying off our mortage at this point.

We just refinanced our mortgage last October and have a 3.75% rate. We have now increased our retirement savings. Our goal is to retire earlier than we had planned. I think as other posters have said, it all depends on your financial situation and what you are comfortable with.