Reply to Is it completely stupid to pay off our mortgage?

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[quote=Anonymous][quote=Anonymous]Not having a mortgage gave me an indefinite amount of mental security.  I realize it isn't the smartest way to maximize your money but it was something I really wanted to achieve and it was also the last "to do" before my wife became a SAHM. Having the mortgage out of the way eased that transition. [/quote]

We did this.  We are debt free.  Doesn't matter if Uncle SAM gives you a break…there is a definite mental mind shift that comes when you are debt free.  So I agree with PP, except I DO look at it as the smartest way to maximize your money.  Because what's money for, if not to free you up?  Mentally as well as physically.

BTW Dave Ramsey gives a financial argument that it is actually smarter to do this and he deconstructs the myth of the mortgage interest deduction as being better for you.   Here's his take below:

"It is wise to keep my home mortgage to get the tax deduction."
Wrong! If you've listened to me for any amount of time, you know I strongly encourage people to pay off their mortgage so they have their entire income to use for wealth building. (This is, of course, after you've paid off all your other debts, have an emergency fund, and started investing for retirement and your children's college funds.) But when I talk about paying off the mortgage, I almost always hear from someone touting the tax deduction.

Let's do the math. If you have a home with a payment of $900, and the interest portion is $830 per month, you have paid around $10,000 in interest that year, which creates a tax deduction. If, instead, you have a debt-free home, you would in fact lose the tax deduction, so the myth says keep your home mortgaged because of tax advantages.

If you don't have a $10,000 tax deduction and you're in a 30% tax bracket, you will have to pay $3,000 in taxes on that $10,000. According to the math, we should send $10,000 in interest to the bank so we don't have to send $3,000 in taxes to the IRS. Personally, I think I will live debt-free and not make a $10,000 trade for $3,000.[/quote]

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