First of All, I'm not a Dave Ramsey person and I have never listened to him or gone to see him. I just want to pass on some info along to those who are interested.<quoted text>
These tax benefits that you speak of. Is that the interest deduction that you get on the schedule A? If so, you have the wrong train of thought. I own a $123,000 mortgage at 6.875% interest (which has since been refinanced but using my tax info). Last year, I paid $8323 in interest. What tax did that save me since I'm in the 15% bracket?$1248.45. What happened to the other $7074.55? It lined a bank's pockets. Why would you want to pay a bank $8323 to save you $1248 at tax time? Personally, I would rather pay $1248 to have an additional $7074 in my pocket. Not to mention, in 2008 you could have written off $1000 of property tax (another tax deduction) in addition to your standard credit. That would have given me a total of $11,900 in deductions compared to $14,000. Big whoop. I still am missing about $5000 in my pocket.
As for anyone else, I was like you in that I didn't understand why people listened to or paid for Dave Ramsey's advice last year. Then I read his book and it gave me the motivation to get out of debt. I've stumbled and am getting back on track now. Sometimes, motivation comes from getting your butt chewed out, or someone giving you common sense advice that no one else taught you.
I just found that if you pay bi-weekly payments on a 30 year fixed mortagage, you will cut 5-7 years off your mortgage. For example, if your monthly payment is $1000 a month and it's due May 1st. If you pay $500 by April 15th and $500 by May 1st, the interest you will save yourself over time will cut off 5-7 years off your mortgage. In addition, if you pay an extra $50 every time you make a bi-weekly payment, that again reduces your mortgage ahead of time. Had I known this, I would have started this process along time ago. Just thought I'd pass it along. I wish I'd have known this along time ago.