Sunday, March 29, 2009

Of Paying Down Mortgages

So, I found this excerpt below in the Reader's Digest, and I thought I should post it and get the word out. It just goes to show--despite what the world may say, it is always best to follow the prophet's advice--in this case, the advice has always been to buy an affordable house and pay it off as quickly as possible. And guess what? As far as I know, you get the same tax breaks for charities you donate to, so lets pay off our houses folks, and donate that money to charity!

"Pay more on your mortgage. You may have heard that because the interest is tax deductible, a mortgage is a good debt. But even if you're getting a tax break, you're still paying interest—and the longer you've had the mortgage, the smaller the tax break (because you pay less interest each year). As with all debt, paying it off sooner is better. So once you've paid off your credit cards and other high-rate debt, go ahead and add an extra payment each year (or spread it out over 12 months). If you do that over the life of a 30-year fixed loan with a rate of 6 percent, you'll shave roughly 20 percent off the total interest you pay. On a $150,000 mortgage, that means saving about $26,000." ~RD

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