According to Warren Buffett legendary investor of all time, when the tide goes out you will find out who's naked. If the assets are in a taxable investment portfolio, the decision depends on whether you are earning more on the investments than you're paying out on the mortgage and if you want to continue taking that risk. Maybe with a 10 year locked rate mortgage, and a 10 year amortization, so no extra rate risks.
The math on each of these what-ifs favored investing over paying off a mortgage. As a result, Somerville said he's increasingly steering customers into accelerated mortgage plans that hinge not on lines of credit but on credit cards. But for homeowners who manage debt responsibly, Getting a big, long mortgage and never paying it off is the smartest, safest strategy to use,” he says.
If you're in a position to consider paying off your mortgage at all, you're probably in a good place. Though we had our small house mortgage payment automatically debited from our checking account, we continued to receive mortgage statements in the mail. Why pay a bank say $3000 in interest a year to get $300 back in taxes from uncle sam.
Not only will this ensure you are living within your means (and not above your income, which is where credit card debt comes from), but it will also give you a set timeline on when you can expect to get debt free. Put the extra $120 into your mortgage every month and you won't even miss the money, since you're not used to having it.
In the months when you put your entire paycheck towards mortgagepayoffheloc your mortgage, you put the rest of your expenses on your credit card. Suzie, in this example, has nothing but a house to live in… and if the rainy day” comes before year 15, she also still has a mortgage payment to make.
Strategy #4: Pay extra. But since I developed such minimalist habits, I sometimes couldn't think of anything to spend it on and just put it toward the mortgage payoff instead. To best eliminate debt, calculate and make a list what you are spending on each debt payment and who you have it with.