As some of you may know, I don’t read many personal finance books. My tastes trend towards mysteries and suspense. BUT, out of all of the personal finance books I have read, The Automatic Millionaire by David Bach has always been my favorite. I love common sense advice that is simple to use and can make huge positive impacts on someone’s life.
Now I have the honor of reviewing a chapter of David Bach’s new book, Debt Free for Life. Here is my personal take on Chapter 9, Mortgage Debt: How to Protect Your Home and Pay Off Your Mortgage Early.
My Personal Take on Mortgage Debt
I will be honest, I asked to review this chapter specifically. I truly believe that paying off a mortgage early is one of the keys to financial security. Sure, there are worst debts. There are higher interest debts. There may even be higher interest investments. BUT, there is no security blanket in the world better for me than finally being able to live payment free in my own home.
That is why Mr. BFS and I found an affordable home ($114,000), put 20% down, and overpay the mortgage every month. If we just keep on the same track, our house will be paid off in 10 years total or less. We’ll be completely debt free at around age 32 and 33. That will make our early retirement dreams even easier to attain.
Bach’s Breakdown of Mortgage Debt
David Bach has once again impressed me with a straight-forward look at debt and EASY ways to get rid of it quickly! His mortgage debt chapter highlights the benefits of fixed-term mortgages and ways to use them to your advantage. He also gives advice on the best refinance companies or handling a bad mortgage situation.
In my opinion, the highlights of the Chapter 9 – Mortgage Debt include:
—> His wonderfully quick explanation and visual of the tens of thousands of dollars anyone can save if they can afford a 15 year mortgage instead of a 30 year term.
My husband and I would have been looking at a $530 payment for 30 years instead of the $740 payment we have with our 15 year loan, so the decision was pretty easy. It was pretty cheap either way, so why not go with a 15 year term, right?
—> His biweekly payment suggestion and visual for 30 year fixed-rate terms. It shows that anyone who pays half of their mortgage payment every two weeks can shave 5-7 years off their 30 year term and save tens of thousands of dollars overall. Biweekly payments on a $300,000 mortgage at 6% will shave off 6 years and $72,000!
—> Bach also suggests how to switch over to a fixed-rate mortgage if you plan on living in your home for more than 5 years and are in a variable-rate mortgage currently. He follows this with points to pay attention to during a refinance.
—> The last part of the chapter is for anyone in a mortgage crisis right now. He gives great advice to anyone who is currently struggling to keep their home including places to contact and options you may have.
—> As with all of his chapters, there is a small checklist at the end for anyone trying to go after debt freedom for life.
Overall, I couldn’t agree more with David Bach. Mortgage debt freedom is an important step to financial security and his suggestions are common sense ways to get there faster. It may not be a brand new idea, but it surely is worth mentioning by anyone as much as possible. Plus Bach has a great way of simplifying ideas without being condescending. I personally enjoy his very straight-forward writing style and appreciate the examples he selects to use. Bach seems like a guy that personal finance geeks like us could have a good conversation with. I give Debt Free for Life my personal thumbs up!
Crystal at Budgeting in the Fun Stuff. I did receive a free copy of David Bach’s “Debt Free for Life” in order to be able to do the review, but I volunteered for it in advance since I did very much enjoy “The Automatic Millionaire” before I ever even knew what a personal finance blog was, lol. Aside from using apps to buy stocks we don’t really have a lot of “automatic” money decisions being made for us right now. Perhaps I should dig in and find more ways to have money working for us.
Here are some other chapter reviews from the blogosphere:
- Barbara Friedberg Personal Finance’s Chapter 5 review, Debt Reduction is like Dieting
- Bucksome Boomer’s Chapter 5 review, David Bach’s DOLP Method to Pay Down Debt
- The Saved Quarter’s Chapter 10 review, The Student Loan Diet: A Review
- Bible Money Matters’ Chapter 13 review, A Review for Debt Free for Life by David Bach