Comments on: Paying Off Your Mortgage Early Is A Bad Idea When… http://harvestingdollars.com/2009/09/21/paying-off-your-mortgage-early-is-a-bad-idea-when/ Plant Knowledge. Reap Financial Gain. Fri, 26 Feb 2010 18:51:54 +0000 http://wordpress.org/?v=2.9 hourly 1 By: The Realist http://harvestingdollars.com/2009/09/21/paying-off-your-mortgage-early-is-a-bad-idea-when/comment-page-1/#comment-9113 The Realist Mon, 01 Feb 2010 03:56:00 +0000 http://harvestingdollars.com/?p=1107#comment-9113 "If people continue to lose jobs and scale back we could see deflation for a while before it reverses to inflation." What if you are 55 and listened to this advice? Don't pay your mortgage early? You could be facing losing your home right now. You did things right, you kept your 4-6 months of salary in savings, but you have been out of work for 12 months. And you have 12 years to go on your mortgage. But you can no longer keep paying it. What are you going to do? Where are you going to live? I pay an extra $100/mo on my mortgage. Always have. Now I also have gotten up to saving $100/pay check and increased my 401k to 15%. Lastly, I am now paying 5% to my son's college education. I do not take home that much more than I did 10 years ago. Why? Because I don't need it to live comfortably. I save more so I don't have to worry later. Car breaks down? Got it covered. Son goes to college? Got most of it covered. Furnace goes out, got it covered. I lose my job at 50? I may not be covered 100%, but I do know that I won't lose my house because I have been "Paying Off my Mortgage early". “If people continue to lose jobs and scale back we could see deflation for a while before it reverses to inflation.” What if you are 55 and listened to this advice? Don’t pay your mortgage early? You could be facing losing your home right now. You did things right, you kept your 4-6 months of salary in savings, but you have been out of work for 12 months. And you have 12 years to go on your mortgage. But you can no longer keep paying it. What are you going to do? Where are you going to live?

I pay an extra $100/mo on my mortgage. Always have. Now I also have gotten up to saving $100/pay check and increased my 401k to 15%. Lastly, I am now paying 5% to my son’s college education. I do not take home that much more than I did 10 years ago. Why? Because I don’t need it to live comfortably. I save more so I don’t have to worry later. Car breaks down? Got it covered. Son goes to college? Got most of it covered. Furnace goes out, got it covered. I lose my job at 50? I may not be covered 100%, but I do know that I won’t lose my house because I have been “Paying Off my Mortgage early”.

]]> By: MJP http://harvestingdollars.com/2009/09/21/paying-off-your-mortgage-early-is-a-bad-idea-when/comment-page-1/#comment-7366 MJP Sat, 26 Sep 2009 04:44:27 +0000 http://harvestingdollars.com/?p=1107#comment-7366 I hear and read this argument often. It is not universally true. Paying off a mortgage with devalued dollars caused by extended periods of inflation is a benefit only if your income at least keeps pace with inflation. On the other hand, if your mortgage payment remains a fixed percentage of your spendable income even with inflation, what does it matter that those dollars have been devalued by inflation? The relative cost to you and your spending power is the same. I hear and read this argument often. It is not universally true. Paying off a mortgage with devalued dollars caused by extended periods of inflation is a benefit only if your income at least keeps pace with inflation. On the other hand, if your mortgage payment remains a fixed percentage of your spendable income even with inflation, what does it matter that those dollars have been devalued by inflation? The relative cost to you and your spending power is the same.

]]>