Why You Should Pay Off Your Home Early
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- เผยแพร่เมื่อ 19 พ.ย. 2023
- Believe it or not, your mortgage doesn’t have to be a debt you carry for the rest of your life. Your income is your biggest wealth-building tool, and if you’re no longer using it to pay off your mortgage, you can win with money in a big way. In this episode, learn the pros of paying off your house early.
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Made my final mortgage payment yesterday! 38 and debt free!!!!! Took about 11 years and 4 months to pay off.
That's incredible!! Young and disciplined plus it sounds more realistic to most of us than the less than 5 years people. Good work
Congrats
Congratulations
Wow, I am so happy for you. Well done. Another life is waiting for you now 🥳👍
Congratulations! All those sacrifices paid off! Enjoy your peace of mind 😊
Being debt free for 30 years. When my paycheck comes I’m like oh another check. It does grow when there’s no debt. Faster than you think. Honestly i don’t even know it’s pay day until i get the email from my bank saying a deposit was received. Good way to live.
Mortgage and debt free for us the past 2 years now and totally agree with this as it’s exactly the same situation we are in!
Honestly, I'd go a step further and say if you're celebrating payday, you're doing it wrong
There are million other payments besides your mortgage. Taxes, electricity water waste insurances fuel cloths and the list goes on and on
Indeed. Same here.
I bet you're in my boat as well.... Well shit....I got 20k in savings. Better call my financial advisor to invest some.
@@hydepark1382it sounds like he is justifying staying in debt
We were able to pay off our mortgage this past august. Life has been changed drastically for us. We no longer worry about money and our focus now is saving. We were able to pay it off in 10 years. The remaining balance was 20k and we payed the lump sum. At age 33 with a household income of 120k. I’m very proud of us.
That's wonderful!! Now, are you helping others??
As soon as you demand charity, it becomes tax. As soon as you share your charity it becomes marketing.
So embrace others to it, but don't go after and demand it of them!@@kbanghart
@@kbangharthelping others will be a waste if they use it for drugs
LETS GOOOOOOOOOO!!!!!!
Paid off ours in July, haven't wanted to borrow against since.
Today my mortgage of 175k is being paid off after almost 8 years and feels great 😊
That's great! You have a right to be proud of yourself for this achievement.
@@maryk446 thank you! It certainly is great
be proud be proud major accomplishment regardless of what people say sure u feel it
What was your interest in the mortgage? I also have 180 k mortgage with 6.5 % … the amount of month have to pay in interest is crazy ( fir a 30 year mortgage)
@@andratoma9834 5.4% but I just now remembered that it was a 115k mortgage but I put 60k on the down payment which really helped. And also paid off a 40k work truck during that time
I paid off my house 3 years ago. I literally can now save $60K per year. It's pretty cool, and I am single with no kids or other debts 😊 🎉 best part is I love working and making a 6-figure income. Next is finding someone to share it with. Starting my 40s with a bang 🎉 😊
@@Christian_VillanuevaHe's a guy🤭
@@Christian_Villanueva 🤣
@@Christian_Villanueva Hey! What ever rocks your boat🤭
Just don’t get married, don’t ruin all you’ve worked for
Make sure you have a prenup and live somewhere they're enforceable, or you won't have your house for long.
Paying off your house means more than just financial peace. The mental peace you get knowing that you can go to bed at night not owing money to anyone is a feeling of tranquility that is hard to describe.
I currently owe $85,976 on my mortgage loan and I’m aggressively paying down this mortgage at this time. I can hardly wait to pay this loan off. Then I will be debt free! Yessss!
I am almost there with you. I got 94k left.
@@tastysnack1 Financial freedom here we go! ☺️
98k
I've been in my home 9 years and got really focused in the last 3 years. I'm looking toward a payoff in mid 2024🎉🎉🎉🎉🙌🏾🙌🏾
Congratulations
Wow
We are there, too! Looking to pay off in Spring 2024!!!!!
@@kimochkaks well done 👏
I just paid it off this morning! Zero debt. 😃 I'll take the cash, do some upgrades, then get ready to downsize and retire.
We are now 8 years into our current house and in the process of paying it off by end of December 2024!!
We paid off our mortgage in this November Thanks to Dave’s 7 Baby steps and now we are one of the everyday millionaire because of his teaching! Very grateful that our family future has changed and we are now in Step 7! God Bless Dave and the team and it truly works if you follow his outstanding advice as we have validated it through our own experience to build financial peace and wealth!
Thank you Dave!!! I will be done with my mortgage in 3 years. Turn a 30-year mortgage loan into an 8-year loan.
How did you do that?
You are a winner. Paying off your 30 year mortgage in 8 years.
@@Maya-rw3fe you make extra payments. Double payment then any unexpected bonuses or tax return put on your mortgage. Google mortgage payoff calculator. I found one that way. The ramsey one didn't have the 30 year mortgage option so don't use that one if you have a 30 year mortgage. It's so fun! Now I'm super motivated to pay my mortgage off early!
The lenders must be pissed losing all that potential interest.
@@MrBrewman95or they don't care bc they have a ton more properties with interest
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
*@shirleygarland4766* I've been thinking about going that route. I have a lot of stocks that I have maintained, but they are beginning to lose value, so I'm not sure if I should hold onto them or sell them. I feel hiring your investment coach would make it easier to restructure my portfolio.
Do your homework and choose one that has strategies to help your portfolio grow consistently and steadily. Camille Alicia Garcia is responsible for the success of my portfolio, and I believe she possesses the qualifications and expertise to meet your goals.
Thanks, I just googled her I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
Thank you Dave.
I just paid my last mtg payment last week @ 40 yrs old.
That was my 40 birthday present. Paid my mortgage off. Congrats
That’s impressive af bruh
Been 💯 debt free for 14 months .. including the house .. glad we did it .. thanks Dave !!
🙌🏿🙌🏿🙌🏿🙌🏿
Also loving it
With rates climbing like never before in ’23 coupled with uncontrollable inflation, and our own mortgage at now 7.5% what are the best alternatives/strategies for avoiding a crunch and maximize my $600k savings other than moving in to an RV with my two kids and wife.
You are not alone we can no longer afford our mortgage, husband wants us to travel or relocate/I am proposing cashing in, walking away and renting while putting the rest in the stock market.
In my opinion, home prices will need to fall by at least 40% before the market normalizes. If you are unsure on paying off mortagage, it is best you seek guidance from a well-experienced advisor for proper portfolio allocation to maximize capital. So far, that’s how I’ve stayed afloat over 5 years now, amassing nearly $1m in ROI
@@greekbarrios The housing mkt has corrected 15% to 25%, depending on area. However, these were compared to absolute peak figures that were driven by insane amounts of pandemic money and cheap debt. Now if the mkts were ~20% below 2019 averages, then that would be a true housing correction.
@@greekbarrios sounds great! could you please suggest this expert you engaged their service? I have lots of difficulty sorting out the right positions to buy into as solid additions to my portfolio
I recently payed off my house. I payed the last $500k and now debt free. I make 1.2M a year and can finally breathe 🎉
I followed Dave religiously for 1 year, and we were able to pay off our mortgage. Thanks to Dave, I dedicated 16months in working full time and paying my Masters out of pocket. Today I am completely free, glory be to God.
I am naturally very scared of debt because I grew up watching my mom drawing in debts and never able to pay until our adulthood, my siblings and I came together to pay of her debts and for the 1st time in her life she is experiencing true peace of mind.
Now, I am entering my investment phase. I need all the guidance I need to invest wisely 🙏. YOur suggestions are welcome.
IT IS POSSIBLE, YOU ONLY NEED TO BE EXTREMELY DESCIPLINE.
THANK YOU DAVE. 🙏
Look into vanguard for investing.
We owe 55,000 on our home my wife and I are on a mission to pay off our home in 1 year and I will throw 10,000 straight to principal that should cut the interest to nothing . Wish us luck 🍀
Blue collar here, my hubby and I just paid off our house 2 weeks ago, it hasn’t hit us yet.😂
🙌🙌
When we paid off all our debt and even our home, and freedom is great!
If we did it, you can too.
We lived/live on way less than what we make. We have been a one income family (teachers income) since our oldest was born over 11 years ago. And now that all our kids are in school, I substitute teach only when I want to, not because I have to for extra income.
We just paid off our mortgage last month. It took us 6 years to pay off the 20 years mortgage loan.
Having sacrificed and paid off my home years early …. I was able to leave a toxic work environment and maximize the teachings of both Dave and Ken at the same time.
Thank you both and ALL the team at RamseySolutions.❤
What did you sacrifice?
@@IrisP989 The main thing was never buying anything new. Always shopped thrift for clothing and cut out impulse buys. After taking essentials for my wife and children, all available extra funds went to paying down the mortgage……
Now, being able to make the choice to leave when I chose to was life saving and easy.
My life and work has taken a nice turn for the better. I’m with my family more than ever before over the last 7 months . Being around a new and extremely positive work team is amazing.
Finding Dave and Ken has helped me and I listen and read daily to continue to build my family’s and my personal happiness and growth.
Take care. 😊
I am interviewing potential financial advisors, and one of the candidates called me out of the blue the other day and told me to pay off my mortgage vs. finance at 6.5%. I paid the remaining $300K off and will be hiring this woman!
Thanks Dave, I’ve taken your advice these last few years, it feels good not having debt, now I need to get real with my savings plan.
Paying my house off right after Christmas on my birthday!!! I cannot wait! I will be 38 in January!
My wife and I paid off our home in June of 2020. I was never afraid of Covid or any of it's variants. What terrified me was that, in America, the government could determine that a business, a church or whatever, was non-essential and close it down. We had 6-1/2 years left on a 15 yr mortgage and because of creating my own side hustle 20 years prior, we had enough money to comfortably pay the house off. Both the lock downs and the masks were so terrifying to me that I told my wife, I don't know where the world is headed but we are going to live in a home that is paid for. No excuses!! I was making $36k at my job and my wife had always been a stay at home mom. 4 months later I was fired after 20 years without severance, unemployment was blocked, and my insurance ended in the blink of an eye. Thank God for a side hustle that now supports my family better than I ever thought possible. Pay it off people!
Love this! My husband and I live Canada and paid off our $260K mortgage this past August in just under 5 years! We also cash-flowed 2 vehicles and countless home items (fence, furniture, etc.), and have also paid for daycare and put money away for our childrens’ education funds throughout! We bought the house for $565K, so had saved up a huge lump sum in advance as well. It IS possible! 🎉
Canadian mortgages are weird and punishing.
Of course it can be done if you are making the money you both are making. $52k a year just on your mortgage+ 2 car paid off and living expenses you are up there most people aren't making that kind of money.
@@andrewwilson5722 we were making WAY less when we started out! We lived wayyyy below our means! Our income went up gradually, but we’re not making a crazy amount! We just don’t over-spend! We eat at home, buy everything we can second-hand, and I also flipped some furniture on the side here and there. We have very “normal” jobs - we’re far from being doctors or lawyers! Also, it took us 8 years to save up our down payment! Slowly but surely we did it.
@@herbiehusker1889 agreed!! That’s why we wanted “out” of our mortgage as quickly as possible!
@@andrewwilson5722 we are not doctors or lawyers - we have very “normal” jobs! We saved up for 8 years for our down payment, lived below our means, always ate at home, flipped furniture on the side from time-to-time to pay for “extras/special things”, etc…all while donating 10-15 % of our take home pay every year (we’re Christians and believe in giving). While it wasn’t always easy, it was worth the grit and people can do it!
We paid off our home residence and our rentals. The happiness is real! Now our savings are growing!!
I paid off $150k fixed at 3% in early 2023. Could have made $5,000 in guaranteed profit on that cash through tbills, but instead we thought it would be better to pay the house off. Not the worst decision ever, but thinking of the $5,000 does hurt sometimes.
We are 18 mos away from paying off a mortgage which will end up being a 10yr mortgage! We are so excited. It is possible, I encourage everyone to find a way to pay off early. I can't wait to have a mortgage burning party.🎉😂
Me too dave, you are so right about budgeting. Feel empowered. On baby step 6, and continue pay extra on the house
I just used it and it is brilliant! 👏🏻👏🏻👏🏻 It gives me incentive to increase my extra money. Thank you, Dave. 😊
The phrase I forgot with being debt free is "freedom." It reminded me of the feeling of owing someone something when my initial debt from student debt came on me years ago.
18:00 Adding that risk in is something I realized no one talks about on this discussion with investing vs paying off debt...another thing not mentioned is the additional money you can invest from not having a mortgage that can start growing quicker from the principle plus interest you no longer owe.
If more people could learn how small the portion of their monthly payment actually goes on the mortgage balance....and how they could just add *that* small amount more each month....they could be paying TWO MONTHS' PAYMENT every month. They would save a ton on future interest, and cut the mortgage term drastically.
Especially those 1st couple years
@96ej It's true but unfortunately the first few years are usually the hardest to throw additional money at the mortgage. We didn't really start hitting my mortgage hard until kids were out of day care and then I crushed.
Can you elaborate? I'm 4 years into our 30 year mortgage and would love to know what you mean by that? Are you referring to how much of it goes to principal instead of interest?
@@musiqman24 look up amortization schedule
@musiqman24 yes 100%, early in a 30 yr mortgage you get killed on interest and not much goes towards the principal. For example, let's say your house payment is $1000 a month, $200 goes to principal, the rest goes to interest & taxes in the early years of the mortgage.
As a 26 year old married guy who just bought a home for my wife and kids and owes $340,000, that debt is daunting! I cant wait to get where some of you are.
Follow the Baby Steps
I feel you but you are also ahead of majority by having a house at your age.
You’ll be debt free and very generous soon. It seems like a long way off but it’s not. Just takes planning with a purpose and focus.
*I wasn't financial free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income, and got 4 out of 5 goals, just hope it encourages someone's that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made.*
Investing in many sources of income that are independent of government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Stocks, forex, and digital currencies are still good investments at this time.
Sure, investing is essential for maintaining your financial stability, but making any kind of legitimate investment without the correct advice of a professional can result in a significant loss as well.
It's really not easy trading this market. I read a lot of books, tried to study, watch some tutorial videos, did a little demo before funding my account and I still lost a lot. The financial market could be very tricky
wanted to trade, but | got discouraged with the market price fluctuations~>
I also keep seeing lot's of people testifying about how they make money investing in Stock, Forex and Bitcoin and I wonder why I keep loosing. Can anyone help me out or at least advice me on what to do.
It feels great to pay off the mortgage. I did it 4 years ago, before covid. Unfortunately you are never without a payment. Its called property tax, or as i call it "rent to the state."
Never is a totality word.
Try using "without exception in the universe".
There are many ways not to pay Property Tax.
Defer
Bond
Exempt
None
...
Yes, you're truly never without a payment. But it sucks paying a mortgage and property taxes.
@@aolvaar8792not paying your property taxes sounds like terrible advice.
I appreciate what my taxes pay for in our community. All the services I use as a homeowner. The schools that are already underfunded.
If I couldn't afford my property taxes I am a living in too much house.
8:16 PREACH DAVE 🙌🏽🙌🏽🙌🏽. Paid off my mortgage on 3/7/24. Thanks for the roadmap Dave! Thank you God for sending Dave! To God be the glory for the things the Spirit of God has done!!!
While I’m teaching chemistry the personal finance teacher has you going in the next classroom. You give me competition! 😂
I’ve been listening to Dave for 20 years. This may be the first time I’ve heard him tell somebody to pump their brakes lol.
I appreciate that Dave says "I love your zeal for paying the debt off, but don't let it eat your investments and emergency fund." Life has a way of throwing curveballs at you.
Made the last payment on the mortgage 3 weeks ago. We worked very hard to do it and it feels great.
I love that my house is paid off, it is so nice to own it outright. I commented on this on another thread and was told I only had a small amount of it paid off because I still had utility bills every month. I told the commenter that even if I was renting I would still have utility bills every month, since most rents do not include utilities anymore. Other people bring up repairs and property tax. You’re always going to have to deal with repairs and maintenance though, and I pay my property taxes once a year. I could pay the taxes in March and September but I like to pay them off all at once.
I pay them immediately also Kimberly. A great benefit of having extra money.
The people pointing out utilities, property taxes, and repairs sound silly. The sale value of your house is sitting in your back pocket. Now you need a smaller emergency fund also with no mortgage to pay.
Paid mine off last year its nice to have a bank account with just utility bills and insurance coming out lol
Property taxes...that's a big one also.
@@markg999 its pretty low in tennessee thank god i have friends that pay like 3000-4000$ a year and my house looks like a mansion compares to thiers and i py 1300$ a year
@@markg999 yes, that 650 a year for mine take it's toll.
@@markg999 I live in the Largest American city without a property tax,
My utility bill is ~$700/mo
The City makes money on utilities.
@@markg999 But even with property taxes, it's still much better without mortgage principal and interest payments.
Dave is the greatest advocate for people getting a grip on that money. Thank you sir and God bless you.
I paid 100k off on mine , worked two jobs for three years . I’m down to 24k left and I have double that in my savings but now I can’t bite the bullet …. It’s only 58 a month in interest. 2.7 apr .
Man I wish I could make $145k a year Lol. Also, this man sounds like a good husband who works with his wife as a team. That’s probably the best thing about this story.
You can do it! Increase your skills!
You can!
I make 220K a year. Doesn't feel much different from when I was making 75K a year.
@@ArmageddonIsHerecause you’re a bot
I signed up for a 30 year conventional fixed when I bought my home in 2016 to allow more flexibility in making each payment. A year or so ago my feelings changed and there's no way I would spend 30 years paying off a home I bought for $115K. I have my ducks in a row to take no more than 12 total years paying it off.
We paid off our house at 32 and 31 years old. Being completely debt free gives us buying power and many options.. not to mention peace of mind! Fast forward a year and a half later and we’re now sitting on 80 grand while we continue to stash away for our next house (had a few kids so it’s getting tighter!) we’re motivated to stay away from another mortgage and love being able to have plenty of resources to use as we best see fit.
For those of you thinking about doing it or trying to find motivation to do it I’m here to tell you ITS WORTH IT! get after it!! Every $20 toward your mortgage counts and serves to drive you forward.
I’m my jurisdiction we do not have mortgage interest as a deduction on our principal residence, so for me every extra payment on the principal resulted in a tax free gain of the interest saved. The ultimate reward was having a massive increase in disposable income after clearing our mortgage after 15 years.
I want to retire with no mtg. Currently owe 108k I have the emergency funds. I still contribute to 401k. From now on I’m throwing every extra penny towards mtg payoff. Need to be done in 3 years! Btw I don’t have any other debt
I'm debt free and mortgage is completely paid off as of January this year. It is the most liberating feeling. Changes your view about work, life and finances in general. I am no longer bound by these invisible chains. I am able to focus on my investments both in life and finances.
$214/mo would not change much for me.
You'd be surprised what you could do with after you save it for a couple of months. One of our back tax houses was only786$ we're hopefully gonna ng to get 200,000 for it this year. Your defeating yourself before you even start.@@aolvaar8792
I plan to buy my first home cash when I turn 25. It’s a big goal but I’m on track, you can do it if I can. PAY IT OFF!!!!!
I think you'll enjoy that very much if your spending means you'll be growing your saving and investments quickly.
Thanks for the link to the payoff calculator. I am paying extra on or mortgage and just found out that it should be paid off in 9 years. Yeah for us! We live on less than $3/month so it isn't like we can dump tons of money on it.
2014 when we started our baby steps and 2018 when we’re debt free including the mortgage. We’re still in the budget but we added more to our recreation and vacation envelopes. Sometimes we still feel poor except when we’re on vacation😊
We need more series like this.
Paid my mortgage off in 2019 at the age of 32. The argument against it is stupid. For the past 4 years, I’ve had the money to buy a new car in cash and save up and buy a new HVAC system and windows for my house. I am also able to invest more. I feel good knowing that I owe no one anything and am not making the banks rich. Now, if I sell my house, I get the net amount..:not someone else.
If you have a super low rate it’s better off investing. I refied at 2.25% in 2021 ish so I make more than double just on my high yield savings acct. if you have a higher interest rate like 4-5+ it’s probably better off paying off the mortgage instead
Each situation is different. For you, paying off your mortgage made sense. I had the option to pay off my primary residence after I sold my last rental property but I took the money and invested it. I have a super low mortgage rate, 2.875, and I will make more in the long run by investing. And just because you pay off your mortgage, doesn’t mean you will have no expenses. You still need to maintain it and pay taxes and insurance.
Do you guys fully fund 401x pretax accounts before applying any income to a mortgage? I get 24% on my money in tax savings doing that every year, any market returns are just a bonus. Also we get a match on the money we put in, which puts even farther ahead. My wife and I can do this with almost $70k of income every year. 24% tax savings vs my 2.875 mortgage. That's a very easy choice. I don't think this paid off house thing is as simple as people think it is.
also, IMO having money in these accounts is far more accessible than trapping it in an illiquid asset like a home. what do people do if they lose their job only 5 years into an aggressive 10 year mortgage paydown? not sure why this isn't a consideration of "risk".
@@blanketwodahs6741 if I had a low mortgage rate (2.5-4 %) I would 100% max out my retirement before paying extra money towards the mortgage. If I had a high mortgage rate like 6% or more I’d pay as much as I could towards it and maybe cut down on some of the extra retirement savings.
@@matthewgeissinger2856you have to maintain it and pay taxes with or without a mortgage.
This is great - you cannot forecast risk and your percentage return too confidently; that eliminating this risk is more beneficial than any potential return on your investments.
I have a 20 year fixed at 2.8%. I can put my money just about anywhere else and make more.
Exactly. The place most people screw up is spending that money instead of investing it.
@@ryanebrecht5651where should one invest?
Do you account for taxes? Fees?
I am fortunate to have a lot more money in investments than in my house value. I'm glad the house is paid off. I don't miss the little bit more I might be making on the investments.
Anyone here living in the actual real world? 😂
its possible, just needs disciple
also cash flow doesnt hurt
back lack of discipline makes even folks with more money STILL have the habit of acquiring things by debt.
i say acquire since true ownership inst really there. the property has a lien holder for the duration of the loan/mortgage.
I follow Ramsey. I am single income on clerk salary living in So.California. Debt free, house, net worth > $1M. Dave is right. Anyone in America can be a millionaire by getting out of debt including mortgage debt as soon as possible. Imagine, your savings $250K inside a money fund 5% yields $1000 monthly. The bank is paying you versus you paying the bank and making them rich. This is the secret bank don't want you to know, so they keep you in debt that you continue making them rich. GET OUT OF DEBT PEOPLE
What kind of "clerk's salary" lets you become a millionaire in Southern California? I live in SoCal myself, 220K+ doesn't let me even _FEEL_ like a millionaire, let alone BE one.
I live like a broke college student all my life. I eat peanut butter, black beans and NO DEBT to focus on paying off the mortgage. You don't have a money problem.
We are paying off our mortgage next week.
How did u do it
I really needed this right now. Its a bit tight on one income and my wife will not be returning to the workforce right away from pregnancy. I know that anything we can still put towards the mortgage will make a difference but just seems insignificant sometimes. I've been making some extra payments through and saw on my statements that at the end of our current 4 year term, we will have paid more to principal than interest. So if we keep it up, the difference between them will grow. Hopefully once she is back to work we can make some big steps! thanks Dave.
Congratulations on the kid!
thanks :) @@Sesshyru
@@DiscipleSteven I wonder why Dave doesn't talk as much about selling an existing home, and downsizing to put yourself in a much better financial position? Granted, you're starting over with a new loan, assuming you still need one for the new place, but at least it is at much reduced amount. I just think he could reach tons more people also with that strategy.
I have $315K to pay off, I'm still early enough in my loan terms that a lot of it is going to interest, so if I sell I can probably bank 200k to put into a much smaller place. Yes I may have a mortgage forever, but the property will go to my kids, and at least I'll be able to afford it much easier.
@@kbanghartYes that is very true! I think I have heard him state this in the past for a few specific callers - really depends.
If you could sell now at a profit that is great! I think a lot of people get stuck without a lot of equity or the price has dropped. It doesnt make sense to sell. Also to sell and rebuy something else, there are all of the selling fees, taxes, city tax fees, etc that it would eat at the profit you made too. Also, it might be hard to sell higher and then buy at a low price.
I need to bookmark this, I was chunking more money toward the mortgage, and I paused it when I got laid off. That mortgage calculator really opens eyes!
I’m currently working on paying off my house early myself. I’ve been in my house 5yrs. I’m 33 and plan to have my house paid off by the time I turn 40. 45 at the latest! I’ll be done paying off my truck less than 2yrs. I can actually pay it off in its entirety now, but I want to keep more liquid cash….Im glad to hear my process of paying off my house sounds the same what Dave and Co-host suggesting. ❤thanks!🤗
45 sounds more realistic. If you have a 30 year and you make the same payment amount as a 15 then you should get it done 12-13 years depending
Why on earth do you have a car payment talking about paying off your house? Car debt is as dumb as credit card debt.
@@ellencox8415many people have car payments.
@@Iburn247 Yah, I’ve did the math. My overall debt isn’t much so both is doable. Just a little extra output to make it to 40.😅
40 is my desired. I don’t plan on incurring anymore debt.
@@ellencox8415 My truck is what I wanted!
Reading is fundamental. The debt on that isn’t much. And could be cleared today- if desired! Paying off my house is absolutely doable during the time frame mentioned. Therefore, speaking about it & accomplishing it is *not* a challenge.😒
The only reason to make a lump sum payment is because you can’t contain yourself from spending the amount in your savings account. Pay down your house all the way down to the balance equaling how much you can give up from your savings and then your last payment should be the large chunk from savings.
We paid off our 15-year mortgage in February 2011 after 4 1/2 years! The wealth accumulation journey has been amazing since then - as have the charitable giving opportunities!
My wife and I are making double principal payments on our house, in the hopes of having it all paid off a year before we retire. No longer using the excuse that "well, you can write the mortgage interest off". Yeah right, that didn't help our taxes a bit because between charitable giving and retirement contributions, we're over the allowed deductions already.
Standard Deduction for us is +$30K.
I have a pretty tiny mortgage at 3.6% (my previous house was paid off, and I just took a loan out on the difference between house 1 and house 2). The actual interest part of my mortgage is $230/month, and the property taxes/insurance part is $490. I feel like I wouldn't be decreasing my base housing expenses much, relative to income, and I see much better gains putting extra money into stocks.
I agree and my mortgage is 3.0 percent
Took a second mortgage on our home. Started a distribution company that is on target to hit 4 million this year. If i sold my shares of the company today I can pay my mortgage over twice.
So yes pay your mortgage off if you have nothing better to for your money.
Years ago I heard you preach about not purchasing mobile homes or trailers. I bought a sturdy and solidly built mobile home. I am sure you are "preaching to the choir", well some of us do not "sing worth a hoot." There are places in America the only option is purchasing a home you can take with you. I live in Northern Arizona on the Navajo Nation. For many years my family ranches has been in litigation - the Navajo/ Hopi land Dispute. We were told to live like transits, squatters until the dispute is settled. Many of us decided to buy trailers, something we can call home. I was 15 years old when the litigation began, it wasn't until I was in my 50s the dispute was settled. My father's ranching area was awarded to the Hopis. Thank goodness my mother's ranch was awarded to us Navajos. At times I agree with you, but in this case I don't.
I didn't need convincing - paying my house off completely was/is the best thing I ever did for peace of mind...
why it's even a question - assuming you can maintain some savings - is beyond me.
And having little to no debt is soooo nice in our crazy world.
Super useful and interesting payoff calculator ! Thanks
I don't always make the best financial choices but I did prioritize paying off my mortgage and that happened in 2023- i had a 15 year note but paid it off in five. People always tell me that paying off a 2.9% mortgage was stupid, etc etc.. but I cannot say too strongly how good it feels to fully own my house. I still have taxes insurance and maintenance of course, but it FEELS SO GOOD to own it outright. Whatever you guys think about closing out a cheap mortgage, i will say it feels better than any financial decision i've made in many years. (i'm 58 years old so not yet retiring but still worried about having enough when the time comes)
I agree, it was stupid. Your feelings are irrational fear. If you had invested that money, you would be killing it. A paid off house isn't paying you dividends, nor gaining any more value than it would have otherwise.
hey my grass at the back is the greenest so far, bless you
There is no logical motive to rush paying off the mortgage when our percentage on it is below 2% and there are plenty of CDs, Savings, other investments that give 4.30-5.30% over 12-18-24 months. As soon as situation changes in any way and balance shifts, take out those savings with growth on them and pay it off if you wish 🤷🏻♀️ otherwise just normal payments make sense and investing all “extra”.
Except having over a thousand dollars go to your bank account instead of fannie maes bank.
Yes but don’t forget the taxes you’re paying so not getting that full 5% on CD
@@lukem5962 correct, yet it'll still be more than mortgage percentage most of the time (well, not right now when it's over 8% lol, but for everyone who purchased earlier for 1.25 - 2.25%). One can risk a bit more and invest into something more profitable, too.
@@lukem5962 also don't forget mortgage interest is tax deductible for most so the interest rate is effectively even less than stated
My mortgage rate is under 3%. Investments with a return over 3% will improve my situation faster than making extra house payments.
youll still have the maintenance on the house along with a payment thats 2/3 thirds interest while you build money in a casino account. Lets face it, do you folks really think that in 30 years the American stock market is going to be giving you 4-7% returns. All of your enemies now have nuclear weapons, and the middle east isnt safe to put a ship through. Amazing that folks think our markets are impervious to loss, or that just given time youll receive a hefty return.
I agree. If you lose your job, you could sell some of your stocks to make your mortgage payments. These people have irrational fear.
I bought my first home at 22. Paid it off in 6 years ( short term pain = long term gain). Fast forward 30 years and we own freehold our OO and 4 rentals, giving us passive income. Retiring now ( well, giving us the choice to work or not) at 52. Keep up the great advice, Dave. From the GOOD lady ( get, out, of, debt)
I don't get it why people are so happy to pay off their mortgages? It is always situational. If mortgage interest rate is 3%, and these days you can get 5% on your saving account, is it wise to pay off the mortgage instead of investing extra money there where you can get more than interest you are paying?
No it might feel good but you’re better off putting in the high yield or other investments.
@@andichrist2000I mean "at least" CD. Sure you can do better than 5 per cent. My point was that it is not always a good idea to pay off your mortgage.
Yeah this Ramsey guy is a joker. I don’t pay over because I make 5% on high yield and mortgage is 2.5%.
@@sarpsevinc8415 exactly. Who got mortgage for 2.8% and you can invest with 5% . Why in hurry to payoff?
This paying off the house theory is very situational - my taxes and insurance cost more than the actual principal and interest on my mortgage with a low rate. Paying off my house wouldn’t free up that much income.
That’s my situation. Only half the housing expense is the P&I. But still when it is paid off that will free that money up.
does this house magically have no maintenance costs? You dont have to put a roof on this thing for 20k at any point? Folks think these things just stay up without any work?
We will be done with mortgage in 3 years. Its a small price to pay, we are so excited to reach baby step 7.
That's great. So what are you doing to help others?
@@kbanghart What are YOU doing to help others?
@@formula112967 lots. But I'm still paying on my mortgage and other debts
Living debt-free removes so much m pressure from your life. I’m 25 with no debt and about a $250k investment portfolio and a $11k bank account and drive an accord (although it’s only 2 years old) but always nice to have no debt
Dear Mr Ramsey,
You remind me of my father when he talked about debt.
Gor a 30 yr mortgage. Paid off in 19yrs.
I paid one off in 1 day, I paid cash!
@@AlinaTamashevichI can do you one better my parents bought me a home in cash as a wedding gift.
@@reesercliffmust be nice 😅
Nah, mortgage at 4%, investment making 12% on average. (Dave uses this figure when he said 8% was a good withdrawl rate) using that same logic, mathematically its stupid to pay off sub 5% interest rate when you can make 12% annually.
And let the bank rob you blind, what a plan!
Remember you have to pay taxes on the dividends and capital gains. I have my payoff money invested in S&P 500 ETFs. My mortgage is 2.75 percent. Idk whether it will end up being six of one; half-dozen of the other.
@@genxx2724 my money would be on you being much better off investing at a 2.75% mortgage. You can run the numbers through online calculators but if we're talking about investing long term. 2.75% is great, you might even be ahead if you just threw money in 5.5% CDs.
If my mortgage rate was 6% I'd probably make my company match, max out roth ira and attack the mortgage with remainder. But less than 5% and 20+ years investment timeline I'm inclined to just invest.
A 4% mortgage payoff is zero risk
A 12% SP 500 has high risk…up 32% one year, down 20% the next.
You always have to look at the flip side of the same coin - risk: heads tails: return.
@@cstuartdc Over time, the S&P 500 does not have risk. The risk is inflation devaluing your cash.
Love this guy. Thank you.
We paid off our house off early for the peace of mind. When Corona hit I wasn’t worried about losing my job. I actually decided to retire last week. It wouldn’t have been possible with a mortgage payment.
That's great.....I bought my house and took my 30 year loan 10 years ago, and if I keep up the extra payments, I will be done in 2 years, shaving 18 years off my 30 year loan....what is your age?
He's right, you want a buffer. I needed one recently when ending up with sepsis resulting in endocarditis. That further resulted in heart failure, liver failure and kidney failure. I was out for three months and thankfully had savings/ leave/ insurance (paid out what I didn't have in leave). I live in Australia so there was no out of pocket costs for my month stay in hospital and two surgeries (including a double valve replacement).
Only 38 years old but doing well now :)
Question, I have a mortgage rate of 1.18% (still have 8 years left) and the current saving rate at bank is 5%. Will this be beneficial to pay back earlier?
Based on his stubbornness and some research done among billionnaires who all paid off their homes before finding the lock to the front door, DR and his fans will tell you to pay it off right away no matter how much you give away in returns.
I'm in a situation similar to yours (the last leg of my mortgage has a fixed rate of 1.05% APR).
I'd suggest you rely on your own judgement.
It’s a personal choice, but to me freedom and security is worth more than those returns. Once it’s paid off, savings will skyrocket.
I did the math here and it does not make sense for me to pay my house off as early as possible. Early yes, but not to the point where I'm sinking my Roth 401k contributions into paying off my house. Especially with a 2.25% interest rate on my mortgage. I pay an extra $200 a month on my mortgage, which will shorten my 30 year loan down to a 20 year loan. The rest of my hard earned dollars go towards maximizing my Roth 401k contributions to whatever the Federal Limit is. At the age of 55 I am projected to have around 5 million in Roth and my house paid off. Only 20 more years to go!!!
If you remember on thing: cash is king and never run out of it. If you hav the cash to pay off the mortgage don’t as you may have a business opportunity to invest in, a sick child a sibling or parent that needs financial support a once in a lifetime experience etc etc. the house is a unique thing you own as it is the only thing most people own that appreciates in value
The thing that will “rev up your wealth-building journey” is putting money into the stock market as early as possible. You can never make up for time in the market.
The market is about to crash
@@mitchdegrace2040 I hope it does. I’ve been waiting for a buying opportunity.
Four years into my 30 year mortgage and i found Dave 2 years in. Adding quite a bit extra each month and i should be done in 17 years, but that's assuming my husband or i never get a raise. If/when we do, I'll be getting more intense.
Check your interest rate. You would be better off putting that money in a high yield savings account. And then paying it off all at once.
@@aaront936
Your advice makes eminent financial sense, but she won't take it. As you can see, she hasn't replied yet.
You see, Dave's followers are mostly people who either aren't smart enough to develop their own financial skills, or _think_ they aren't smart enough.
They just blindly follow the leader; he's a messiah to them, and his words are the gospel truth, never to be questioned.
We need one of these shows in the UK (unless I haven't found it yet)
Paid off our home by 30. We are in Australia so this is AU dollars. Was quite a bit of luck alongside effort (we bought a piece of land for a future home for cheap while living in the cheapest home we could get in the costly city we wee in and by the time we sold our home while aggressively paying down both mortgages, it had gone up in value enough to cover the build and remaining mortgage for our new home). No other debt, now three years into building wealth and have a 1.3m net wealth (about 700k in primary home and the rest in savings and investments). Not far off the US million-dollar net worth status (need about AU$1.5m). So far this has required multiple jobs, a frugal lifestyle and hustling (household income ranging from 75k to 210k throughout this period). Proud of us.
I technically paid mine already. I am just waiting for the anniversary date to pay it off. I signed in November 2020 at 1.7% and withdraw all my overpayment and invested them back into 5.1% GIC for 3 years in 2022. Basically the bank is paying me for having a loan.
We refinanced to get 2.99 mortgage rate just a few years ago, so we're not far into our restarted 30 years. My thing is, wouldn't it make more sense to invest anything extra we would put towards the house in the market and get returns and growth greater than our 3% mortgage?
Totally, but Dave's take is that regardless of financial return, you will feel better having a paid off house. 3% is close to free money, at a time when savings accounts pay 4.9%, so it does come down to personal preference. If you're comfortable keeping the mortgage that's fine. I had once paid a house off in the Midwest, but sadly we lost our jobs and were forced to move and could not enjoy the low expenses. There's no rental market in a lot of Midwest towns, or wasn't then anyway. So individual circumstances decide how it's going to work out for you.
If you're disciplined in you're investing it never makes sense to pay off your mortgage early as opposed to investing and making the additional 4-5% on your investments.
I’m 44 years old, i this paid off my house 4 years ago, i feel much better love America 🇺🇸
Really enjoyed the show we need more 😂😂😂👏🏾👍🏾👊🏽