It’s a nice way of saying you’re stupid and you believe cultural lies that are out there. Dave’s answer: No way! I’m going from a 30 year to a 15 year mortgage. Coaching, Listen or Watch You’d have to pay taxes on $75,000. ANSWER: If you have the opportunity to pay off your home and you don’t pay off your home in order to keep the tax deduction, that would be an indication that you are poor at mathematics. Your mortgage payment is defined as your principal and interest payment in this mortgage payoff calculator. Would I pay off my home and take my old $4,000- a- month house payment and automatically start investing that into good mutual funds? and Syndication, Get the Ramsey Network And if you were thinking of refinancing from your current mortgage term down to a 15-year fixed-rate mortgage (the only one we recommend), now is the prime time to do it. Not only will you pay off a 15-year mortgage in half the time, but you’ll also pay much less in interest. Your ELP is an expert real estate agent who can help you get a great deal on the home that’s right for you. If you have a $200,000 mortgage at 5%, that would be $10,000. I want you to hear me loud and clear on this one: Never, ever use retirement account (IRA, 401k) money to pay off a mortgage. I knew that given the interest rate on my mortgage, 3.25%, that based on historic gains investing the $200K I used to pay off the mortgage was the “right” financial decision. I graduated in 2010 with about $100k. If you’re still not convinced that retirement investing should come before you pay off the mortgage, you can talk to an investing professional. With EveryDollar, Track It’s not a good deal. Hi all, hope I can get a decent answer on what to do here. My wife (32) and I (31) along with our newborn child are currently 3 years into living in our "forever home" and are paying $1300/mo as a mortgage payment, which includes an extra $200/month to get it over with quicker - we are on track to have the house paid off in 9 years. Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of "The Dave Ramsey Show," heard by more than 16 million listeners each week. My wife and I are refinancing our 30 year mortgage (25 years left) to a 15 year mortgage as our interest rate will drop nearly 2% and we want to pay the house off quicker. It won’t be building up interest right now. My accountant warns me against it, as I would have no other write-offs to offset my high income. So, what if you’re saying to yourself: I just hate debt and still want to pay off my mortgage. Dave tells Lisa he'd pay it off tomorrow. Get personalized money advice from a professional Dave trusts in your local area. We have a $10,000 tax write-off because we have a $200,000 mortgage at 5%. Share on Pinterest Share. The grass feels different under your feet. Also, the cash freed up between paying off the mortgage and finding (& moving to) my final house can be set aside to cover moving & closing costs on the next property. According to Dave’s extra payment calculator, I would pay off my mortgage 3 years and 10 month early and save about $5900 if I pay extra $200 towards mortgage. 2. This is why Dave says you should first invest 15% of your income for retirement before you work toward paying off your mortgage. That’s stupid. Share on LinkedIn Share. It’s what I did when I paid my home off years ago. ©2021 Lampo Licensing, LLC. In essence, you lost a $2,500 savings on your tax bill, but you gained $10,000 by not having to pay it to the bank. 2020, we have a $ 200,000 to trade $ 10,000 tax write-off because have. Into the financial independence community t have to pay off your mortgage faster... 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