Even though you can claim that you are debt free after Baby Step #2 according to Dave Ramsey’s plan, you are not officially debt free until you have NO debt. So, now is the time to get rid of it all. Baby Step #6 is to throw all extra money toward paying off the house.
Dave Ramsey suggests getting no more than a 15 year fixed rate mortgage that is no more than ¼ of your income. If you don’t already have a 15 year fixed rate mortgage, now is a great time to refinance at a lower interest rate and knock off some years to boot. Moving from a 20 or 30 year mortgage to a 15 may mean that your payments are going to be higher but you will pay off the house faster and besides, you don’t have any other debt at this point so all your extra money should be thrown to pay off the mortgage anyway.
Some of the major reasons to pay off your home early included…
• Save thousands of dollars on interest payments
• Less stress
• Peace of mind
• Freedom to use that money to build wealth
Once you have paid off your mortgage, you will have an enormous peace of mind knowing that your house is paid for!