Rachel Cruze: Why Pay Off Your Mortgage Early

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Rachel Cruze, a celebrated voice in personal finance, strongly advocates for early mortgage payments. This advice sometimes astonishes those who think mortgage debt, unlike high-interest credit card debt, is “good debt.” But what makes Cruz differ from the usual financial narrative?

Typically, mortgage debts are perceived positively because they are linked to property investments, which often appreciate over time. Most U.S. mortgages, approximately 92% as per the Federal Reserve Bank of St. Louis, are fixed-rate, ensuring consistent payments despite economic changes. This aspect makes them appealing to many financial planners.

Why Rachel Cruze Promotes Early Mortgage Payment

Rachel Cruze, alongside her father Dave Ramsey, encourages people to prioritize paying off their mortgages. This viewpoint often counters the mainstream suggestion that mortgage payments can wait, especially if one’s retirement savings are on track. Cruze’s reasoning is deeply rooted in the peace and financial freedom achieved through eliminating long-term debt obligations. But what makes paying off your home so advantageous?

Analyzing Mortgage Versus Market Investments

While discussing her perspective, Cruze often encounters the argument of investing spare cash in markets, which traditionally yield higher returns than the typical U.S. mortgage rate. Here’s a twist: Cruze challenges this tactic with a thought-provoking question – if your home were debt-free, would you take a loan against your house for market investments? This often introduces a new angle to the debate, prompting a re-evaluation of mortgage as ‘good debt’.

Considerations like these clarify why many value the reliability of a paid-off home over unpredictable market investments. Despite the low rates, debt remains debt, and clearing it can be liberating.

The Serenity of a Debt-Free Home

Mortgage debt may not be equivalent to destructive debts, yet it weighs heavily on one’s financial peace. Imagine the liberation of knowing your home is fully paid for. Rachel Cruze envisions this freedom for everyone, encouraging homeowners to prioritize their mortgage payments, thereby easing the financial strain and bringing peace of mind.

Cruze emphasizes, “True peace is found when you owe nothing.” This makes a compelling case for considering the benefits of an early mortgage payoff.

If you’re intrigued by Cruze’s perspective and want to learn more about personal finance strategies, we invite you to Click Here For More Personal Finance tips and strategies.