Altering a Baby Step
Nancy and her husband are debt-free except for the mortgage. They make $65,000 a year and owe $17,000 on the house. She wonders if they should just attack it and pay it off.
QUESTION: Nancy in New York and her husband are on Dave’s plan and debt-free except for the mortgage. They make $65,000 a year and owe $17,000 on the house. She wonders if they should just attack it and pay it off. Dave asks how fast they can pay it off, which factors into his answer.
ANSWER: I would do that. I’d finish it if it was that close. Normally, the mortgage is $117,000. People that we’re talking to have a $217,000 mortgage or a $517,000 mortgage. In your case, you’re able to just knock this thing out so quickly. If I were in your shoes, that’s what I would do. I would knock it out. In your husband’s defense, if he’s trying to follow The Total Money Makeover book exactly, I don’t think I talked about that in that book. I think instead I was really hardcore, and I usually am really hardcore about staying right with the Baby Steps. I appreciate him for that, and in his defense, I did not say in the book if you have a tiny little first mortgage, go ahead and knock it out, but I think I would. It would just be a very cool place to be by Christmas.