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The financial advisor, Rick Edelman(IIRC) advises AGAINST short-term mortgages, making extra payments or trying to "get rid of a mortgage.

I wonder what Rick's problem is? If a person pays only the required monthly payment on a 30 year mortgage, at the end of that 30 years, he will have paid at least double the selling price.

By making extra payments on principal, and shortening the life of the loan, he will save tens of thousands of dollars that would otherwise have gone to interest.

Whatever tax advantages you lose by paying off a mortgage is more than made up for by saving on what otherwise would have gone to interest.

I think it's because the MONTH TO MONTH cash you're spending on making extra principal payments could go to investments of various kinds that would earn one a net gain at the end of that 30 years.

Basically, thousands upon thousands of dollars properly invested can be a million or two million at the end of 30 years. By paying the mortgage more quickly or just bringing principal down, you are left with a damn house.

It would depend on how much loot one has. If I were incredibly wealthy I'd just buy without worry because monthly payments would be irritating.

Rick also correctly points out that constant references to the "Dow Jones" paints an inaccurate picture of the entire stock market, sometimes too rosy and others too gloomy, as it is only a measure of the very largest.

Just read some of his book, so I'd have to re-check a few factoids.

That financial advisor is a little bit impersonal IMO.

I understand the concept of having other assets than your home, but all things being equal, having your home paid off is a great feeling and I don't buy that your home "is just a place to live".

Ideally, you would have other assets as well as own your home outright.

"I wonder what Rick's problem is? If a person pays only the required monthly payment on a 30 year mortgage, at the end of that 30 years, he will have paid at least double the selling price."

That's the time value of money. Take the difference in the payment and invest it each month. You will come out ahead, and have the option to pay off the mortgage with the nest egg when the house would have been paid off with the accelerated payments. When interest rates rise, your investment return can increase, while your payment stays low. Also, you should avoid holding too much equity in your home, for asset protection purposes.

Here's Ric's explanation:

http://www.ricedelman.com/planning/home/rule21.asp

I wonder what Rick's problem is? If a person pays only the required monthly payment on a 30 year mortgage, at the end of that 30 years, he will have paid at least double the selling price.

Primarily, it's a liquidity thing: yes, equity is an asset, but it can't be tapped quickly, and in some cases, it can't be tapped at all.

For example, you make extra payments and pay off your mortgage, so you own your house free and clear. Now you lose your job--try tapping into your equity to support yourself until you find a new job. You won't be able to. If you'd been investing the money in other, more liquid places rather than in paying off your mortgage early, you'd have a huge fund to live off of.