Home Sweet Home

 

"Those points aside, I'd agree that it may not be your best investment alternative and you'd certainly be making a mistake to sacrifice your ten percent savings, your insurance program, or your retirement planning to pay off the house faster. However, if you have surplus funds beyond what's needed for our three financial priorities, then paying down the mortgage may be worth considering. Actually, we'll talk a bit more about this subject next month, but before we leave it I should mention that I've yet to meet anyone who has paid off his mortgage early and regretted it."

"We'll talk more about this next month is right," James Murray taunted Roy, in a semi-serious fashion.

"Suppose there was a person who had a large enough discretionary cash flow to save ten percent, build a re-tirement fund, and pay down the mortgage, and supposing that such a person agreed with your advice, what would be the best way to implement it?"

By employing the word "suppose" liberally, Cathy was attempting not to incite Tom by reminding him of her substantially-higher-than-his income and not to annoy James Murray by siding with Roy.

"Miss Moneybags . . . must be nice!" Tom threw in im-mediately.

"I still think there are better alternatives," James Murray murmured.

"There are a number of possible early-paydown meth-ods, Cathy. Some mortgages allow for prepayments of principal without penalty; some allow for biweekly pay-ments. By paying twice a month, you end up making vir-tually a full additional month's payment every year. That can reduce the life of a thirty-year mortgage by almost ten years!