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October 20, 2011


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> Applying everything we could to retire the mortgage: pay >raises, bonuses, income from a side business, my wife’s >income, and gifts.
>It's been a GREAT decision and one I'd do again in a heartbeat.

I agree that it is annoying to have a mortgage payment, but right now the loan rates are so extraordinarily low
(30 Year fixed is 4.17% while 15 Year Fixed is 3.45%), does it still make sense?

Inflation is likely to be higer than 3.45%, so effectively a bank will be paying you to not pay off the mortgage early.

I'm all for saving that extra money, but just not giving it to the mortgage company any sooner than required.

-Rick Francis

Items 2, 3, & 4 are symptomatic of a person that is in serious financial straits as the result of circumstances beyond their control or a very foolish person that is intent upon living well beyond their means.

If you hit rock bottom because of a job loss, illness etc. then what choice does a person have other than to tap into whatever money is available. However doing this is a temporary respite that could be the prelude to #5.

As FMF points out it should be everyone's goal to be aware of how disaster can be just around the corner, especially in these troubled times, and that the prudent person is well aware of this and makes financial decisions as clearly outlined. This is particularly important when you have dependents to be concerned about.

I think the list makes some good points. #3 makes the pretty good point about home equity loans and homes losing their value.

#1 there is no problem with paying credit cards off too fast. Their actual concern is paying off cards and then turning around and accumulating more debt. Thats not due to paying the cards off 'too fast' but instead due to not fixing your spending habits. I think that one just needed to have the title changed.

@ Rick Francis-

Not sure, but I thought there was some discussion of eliminating the mortgage interest deduction. That might push some to dedicate extra funds toward their mortgage since the Fed continues to claim that there is no real inflation (HA).

I have been in the same position. We did not go away on a holiday for 6 years, buy a car (we actually sold it)and started a small business it was a great feeling once we reached our goal and now we have no mortgage either.

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