I don't see how a mortgage is "theoretical money". If you sell your house for less than you paid, you still have to pay off the mortgage, even if the mortgage balance is more than you got for the house. The banks aren't going to let you walk away from your debt. And I don't see why a paid-off house would be harder to sell than one with a mortgage. I'm confused as to what you mean exactly.Originally Posted by mrblanche
Paying off your house is putting all your own cash at risk. Yes, it frees up some monthly income, but, should you have to sell it for some reason, you will have to "realize" your gain or loss completely for yourself.
In other words, if your house has gone up in value, you get to keep all the profit. But if it's gone down in value, you get to take all the loss, and it's real money. If you have a mortgage, it's only theoretical money.
The only "drawback" I can see to paying off your mortgage is that you don't get to deduct the interest from your taxes. But since you aren't paying the interest in the first place that's not really a drawback
Congrats! Now you can call Dave Ramsey and yell "We're debt free!" on his show