Mind-Blowing Mortgages
Yikes! Would you like an all-too-clear view of how much even our "good" debt costs us? I was playing around with this mortgage payoff calculator online today. Seriously, check it out! I plugged in these numbers: $150,000 house 30-year mortgage 6.38% interest rate In thirty years, this $150,000 house will have cost a whopping $337,063. Paying just an extra $50 a month will save $29,548 over the life of the loan.
posted by Meika at
Tuesday, May 15, 2007
4 Comments:
That's what keeps the banks in business!! At least the interest is tax deductible. And that $50/month can go even farther if you invest for your retirement at a higher rate of return than the 6% you pay on your mortgage.
True dat! The difference, for we risk-averse, is the peace of mind that comes with knowing that even if the stock market crashes and the automotive industry crumbles (that may be a when rather than an if:), we won't end up on the street or depending on others' generosity. Have you ever seen Cinderella Man?
Mike and I are loosely following the Dave Ramsey plan, which consists of the following "baby steps" (which I'm quoting pretty much verbatim):
1- $1,000 to start an Emergency Fund
2- Pay off all debt using the Debt Snowball (pay off each debt in turn and add the payment from the paid-off debt to the next payment)
3- Three to six months of expenses in savings
4- Invest 15% of household income into Roth IRAs and pre-tax retirement
5- College funding for children
6- Pay off home early
7- Build wealth and give!
I say we're "loosely" following it because while we're charging away at step two, we're also dabbling in steps three and four right now. For me, that calculator was kind of a heads-up. Now that we have almost everything but the house paid off, it's tempting to rest on our laurels a little bit. Realizing that mortgage debt isn't free, either, is added incentive to get on to step six.
What about step 1 1/2? Support your elderly parents.
Elderly? Who's elderly? You're still looking pretty spry to me! :)
Post a Comment
Subscribe to Post Comments [Atom]
<< Home