Hi Terry,
My wife and I are both 30 and recently married. We have no debt other than a couple of credit cards that we pay off each month and our mortgage which has $65K (@ 4.13% fixed 30yr) remaining from an initial $85K from 4 years ago when we purchased our home. It was a fixer-upper which I have made many updates to and while we haven’t had it appraised since buying, it was recently re-assessed at $105K. We have been paying an extra $300/mo towards principle each month, however we do have enough to pay off our mortgage, leaving us with about $15K in savings. We are considering paying it off but are wondering if you can think of any reason(s) this would be a bad idea? We are considering moving out of state in the next year or two; that savings would be nice to put towards a down payment on another house if we move, but we are also considering renting out our current home if we move.

Terry Says:  Well, first congratulations on doing such a great job of savings.  (Of course, you don’t mention having any children! And if you do, you will see why most people don’t have any savings! But I digress!)  I think it’s great that you are building equity and paying down your debt. But especially since you plan to move, don’t become cash-poor just to pay off your mortgage at this stage of life.  (I do think it’s a good idea before retirement.)   And make sure you are each contributing to a retirement plan at work or an Individual Retirement Account.  That is money that will have a long time to grow and work for you. You’re on the right track.

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