We’re paying extra on our daughter’s car to get it paid off a bit early, but can’t afford that for the house.

A 30-year fixed gives you a certain amount of flexibility. When the goose is hanging high, you can always pay more. When things are tight, you aren’t going to come up short.

Mortgage money is the cheapest money you can borrow nowadays, even discounting the deductibility. My first mortgage, back in 1979, was in the double digits.

My monthly payments were high, but the interest wasn’t as bad as for the usual 30 year loan, and for me, I was paying mostly principal. I paid 6.5% interest for my mortgage.

It saved me a pile in interest to do that, and it allowed me to retire early. I could sense this economic bust was long overdue, and I wanted to be free and clear before it hit. I made it just in time.

Aside from the car-loan analogy, a lower rate does not only reduce your payment. It also reduces the total amount you will have paid by the end of the contract. In short, it makes you money.

We all have to work with the choices we’ve made.

Maybe I’d have done better in some corporate cubicle, but I’ve seen way too many corporate cubicle types lose their jobs and incomes too, and when they don’t have the “I can create my own job” mindset, I think it might actually be harder on them than it is on me. Who knows?

The older we get, the more numerous the roads we decided not to travel. I’ve always done best by keeping my eyes on the road ahead.

I know a man’s gotta do what a man’s gotta do.

But at this point in my career, cash flow is everything. This refinance will give me a monthly payment over $200 less than it is now, and over $600 less than it was when I refinanced in 2006.

That makes a difference some months.

IOTW, are you paying the price of being in a mortgage essentially forever, and the only benefit is a smaller monthly mortgage payment?
All else being equal, I would prefer to pay as much as possible but to get out from under the obligation as soon as possible.

I realize everyone’s situation is unique, but when I bought my house, I calculated the total cost (principal plus interest) and got as short a mortgage as I could afford monthly payments for that would minimize that sum. No one can afford to pay cash for a house, you have to borrow, but I felt minimizing interest was my top priority, not minimizing the payment.

Interest rates are, I believe, at an all-time low, and they can’t really go anywhere but up.

House prices are going up here too, and building is going on everywhere, but I live in an unusual area and haven’t projected that as a nationwide trend. I don’t know how sales are doing, but I do know that the new development where the pumpkin-patch farm used to be sold out pretty quick, and they weren’t cheap.

A couple of things are going to happen soon–outside the U.S., and largely outside our control–that are going to put a big ding in our economy. I intend to have things sorted out by then.