I could be wrong in my thinking as I am a novice, I like the thinking Seabass!!! Many homeowners would love to fast forward to when they own their houses outright and no longer have to worry about monthly mortgage payments. We live minimally. The three main features you will see with most physician loans are: Are you interested in a physician mortgage loan? I have been thinking of paying off our mortgage early for a few years now,I am starting this new year 2018 with at least $200 more a month onto my principle bal I am sure that will knock a few years off my 15 yr mortgage. Both of which emphasize sound financial education and advice. Shortly after I graduated from college, I felt ready to buy a house. That definitely wouldn’t happen today . Did you feel like that aspect helped or do you think you would have been diligent enough to have saved the extra each month and invest it? It was an easy decision for me. I didn’t want this debt to limit me in the future. It just mentally frames house as a business debt rather than a personal debt. Extra payments were made toward principal to accelerate the pay down. Some could say it could go in a tax advantaged account while others who pay taxes on it immediately have different tax rate structures. He knew that he was financially secure enough to do what he thought was right. Owning a home often means building equity in a stable asset that appreciates in value over the long haul, and the equity accumulated in the home can be used for cost-effective borrowing in the future. Will an extra $10 a month be a hardship? Love f – fund ideal, does make a nice difference at work, and maxing the 403 funds etc is likely a good idea, however how much fin aid for ( I am assuming your kids ) a physician kid is really going to receive is likely to be low. Designed with convenience and timeliness in mind, 70% of surveys are answered on a mobile device in just a few minutes. Advice on Paying a Mortgage Off Early. If I ever had to pay the mortgage, I’d just get some money out of the 6% account, the point being I had the money so I had the security, plus I had another 3% growth beyond the security. In your case it sounds like paying off your mortgage actually opened the door to new opportunities by allowing you to take risks! Would love to start seeing some more rational takes on this subject, but it has become personal finance canon. If you have the will power to pay off your house, the chances are you will probably be fine financially in the long run . I just saw a post on bogleheads about a Sharonview CD that is paying 4% on a max of $250k. Due to the amazing growth the market has given us we are very close to having enough to retire and looking to go part time at the end of the year. As you point out, those type of things don’t show up in the numbers. Living next the Joneses doesn’t help either at times . Removing a mortgage payment from the financial picture means more money to live on each month, making it a sound financial decision in most cases. If you’re thinking about taking on a few roommates, especially if they are all men, I’d encourage you to contract a regular cleaning service. Contact: Michael Keithley (NMLS #29261) at 513-607-0850 or michael.keithley@citizensbank.com, CT, MA, NH I understand that some mortgage companies, for a fee, are willing to recast a mortgage that was being payed down aggressively but not fully paid off. Thanks for the advice. Oh, and PoF, those Hawaii pictures are mean! Adjustable-rate mortgages typically provide a lower interest rate initially, but over time, the interest rate may adjust upward. Contact: Sara Curry (NMLS#564893) at 269-978-6129 or Sara.Curry@lmcu.org, AZ, CA, CO, FL, HI, IL, KS, MA, MI, MO, NV, NJ, NC, OH, OK, OR, PA, TX, VA, WA They increased it every couple of weeks until they finally hit a pain point they couldn’t handle anymore. In essence, a $300,000 home costs more than $500,000 when viewed this way. Thanks for sharing Shawn!!! We will pay off our mortgage this year. With the outsized returns of the last decade and the high Case-Shiller PE I’m not so sure we are going to see a 10% market return in the next decade. I was much more secure than I otherwise would have been. “We paid off our mortgage early. The math actually becomes quite complicated. Mustard Seed is right. That’s a saving in interest charges of $117,282 !!! Incremental increases towards your mortgage is a great way to pay things off. Fortunately for me, I didn’t need to sell the house and still live here 13 years later. Great post Rob. Has given me some things to think about. Too many of my friends carried student loan debt. I’ve actually known people who have been burned by this brutal reality. While the interest on a 30-year mortgage is substantial, most consumers cannot afford to make extra payments or use available cash to pay off such a large balance all at once. I’m sure that some math can easily show us that instead of the extra payments if we invest that in the markets, we’ll probably have enough after stopping work to afford the mortgage payments in retirement. Eliminating all debt payments will allow us the peace of mind for him to “retire” from corporate, once we hit our mortgage free goal. Maybe 529 money might be an option. Many people choose to pay off their mortgage early by making extra mortgage payments. I’ll back into it this weekend. Contact: David Henderson – loan consultant (NMLS#1183120) at 916-549-9916 or DavidHenderson@loandepot.com. When I joined my practice, a wise senior partner advised me: “You can tolerate a lot of financial turbulence if your house is paid off.” So I made this my goal. We are just starting to throw a little bit extra at the mortgage. With good but highly unstable income and health reasons to consider, it was never a question of lost opportunity costs. The rest goes to savings and traveling. Paid off our mortgage in 2014 and have no regrets! Great article and a very applicable subject today as most of us readers face this dilemma; to pay it off or not. The analysis here involves a “feeling of security” by being debt free, but I always felt secure. I went a step further with huge help from ERN, from Early Retirement Now, who calculated that if I had dollar-cost averaged the $900, the actual return would not be 4.6%, but actually 5.8% when you consider all the dips and dives that the market took during this period ***. This is a possible alternative for those who must pay it down ASAP but some calamity happens making continued payments difficult for a short time frame. Our first mortgage rate was about 10%. No PMI despite a down payment of only 0-10%. Consider an average mortgage with a 4% interest rate, fixed for a 30-year period. I had a few friends who dove right into homeownership after college only to be faced with a tough decision of whether to take a job offer elsewhere which involves selling and relocating or staying put. I thought I knew everything there was to know about finance. That recognition is not the only thing we have in common. On face value, that would have been a higher compounded annual rate of return at 4.6% with dividends reinvested versus the 2.9% from paying off my mortgage early. Within five years, we had the house completely paid off. Most individuals gearing up for retirement are planning to live on a lower fixed income compared to their years in the workforce, which can put a strain on monthly cash flow. I have taken riskier positions and higher pay. Thanks for sharing Happy Philosopher!!! Regrdless, this was a fine article. We are the exact opposite and have held unto debt while investing. Contact: Barbara Reamer (NMLS #783173) at 517-853-2692 Office or 517-256-5364 Cell or breamer@mercbank.com, IL, NY, OH, PA For us, between 4 to 6 years to paying off the mortgage AND saving enough for life after no 9-5 job. Most of the proponents for paying off a mortgage balance early consider the interest rate first. What happens to mortgage protection insurance after the mortgage is paid off early. We are also an MD/JD couple, not too many of those around here. At some point we will have the wealth to afford the luxury of being debt free. Some of these lenders also offer loans for other high income professionals such as dentists, veterinarians, attorneys, podiatrists, optometrists, accountants, and others. What now?” By Helen Racanelli on September 2, 2020. Both are correct. 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