A 7 week series
what are the baby steps?
Now, we’re still on baby step 2, but that doesn’t mean I haven’t planned out our next goals. Here is step 6.
As Dave explains:
PAY OFF YOUR HOME EARLY.
“Now it’s time to bring it all home. Baby Step 6 is the big dog! There’s only one more thing standing in the way of complete freedom from debt—and that’s your mortgage. Can you imagine your life with no house payment?
Any extra money you can put toward your mortgage could save you tens (or even hundreds) of thousands in interest. If you currently have an adjustable-rate, interest-only or even 30-year mortgage, consider refinancing to a 15-year, fixed-rate mortgage. You’ll be amazed at how much you can save in the long run!” ~ Source: Dave Ramsey
why pay off your home earlier than planned?
Do you actually know how much interest you’re paying on your loan every month? If you’re like most Americans, the only time you really pay any attention to it is tax time. Last year our family paid $6,156.27 in interest alone. Now, we have a pretty good interest rate of 4%, but still…can you imagine what you could do with an extra $6,000+ extra per year? I’m sure you could find something to do with it. 🙂
Imagine not owing any single person a single dime? How would that feel? How would it feel to go into retirement with a paid for house? Yeah, pretty great huh?
And how about this quote from Money Under 30
“Few people regret paying off debt.”
“There are huge psychological benefits to a debt-free life.”
“Even with a relatively low interest rate on your mortgage (let’s say 4 percent), paying it off provides a guaranteed return, plus the elimination of your monthly mortgage payment. No matter what the historic track record of the stock market is, there is no guarantee that your portfolio will perform at that level over the next 10 or 20 years. How much better would you sleep with no mortgage payment?” ~ Source