[quote=flu]I don’t get the fascination in today’s environment with the desire to pay a primary home off early, especially for someone who is young that has still a lot of earning potential and can afford to take risks and still recover.
Economic situation changes, and so does one’s strategy. Maybe decades ago when mortgage rates were at the bendover 10+% rate, there was an incentive to pay off early…But look around. Mortgage rates are 2.5% for 15 years fixed, 3.375% for 30 years on a primary. Equity in primary home is pretty dead (at least until you move out or move up)…In this current environment, why do you want your money just to still there doing nothing?
Phillip Morris pays a 3.4% dividend, AN probably has a few recommendations on dividend stocks that do over 10%, and even the sucky Intel will be paying close to 5% dividend (though, it’s still a crappy company)…And these rates won’t ever change. Someone who is well qualified and who can take advantage of this. Hell, you probably can get more than 3% by buying and selling crap on craigslist.
Paying off early is sooooo old school. Hell, I was part of that old school of thinking. Not so much anymore.[/quote]
flu, I agree, for younger people who purchased their homes in the last decade or so, and paid hundreds of thousands more for their homes than previous buyers, keeping a mortgage might not only make more sense, but, in many cases, is probably a necessity. Personally, I always wanted to keep funds free for investment properties, so I had a different strategy when I was in the “buying” mode.
On the other hand, I can also understand why the younger folks (and/or their parents) who are part of the current 21% mentioned in the OP might want to be free and clear homeowners.
Even though, when we’re young, we think we’re invincible, when unexpected things in life happen, it’s really nice to have your home paid off–just in case you lose that job, or have to pay all of your medical insurance, or, or….
To each his or her own–whatever works for your bottom line!
