Paying off Mortgage

[Kyle Keller]

I am refinancing my house and will sign papers in October so I won't be required to make 2 months of payments. Should I save that money and put it towards other investments or should I put that money towards paying down the principal of the mortgage?

[Eric Ashby]

@Kyle Keller

Never pay down a mortgage. Generally mortgages have long amortizations and low interest rates. The payment amount is fixed regardless of how much principal you owe. So what is the incentive to make an additional principal payment; to avoid the last two payments due in oct/nov 2050? That’s crazy. I am a proponent of having some real estate owned free and clear, my cash cows, to provide protection for my leveraged properties but for me it’s an all or none proposition and I don’t see value in playing but the middle.