Pay the mortgage off or use that money for tangibles?

[Prairie Patriot]

Hi all,

Simple question. In order to prepare for a financial/economic crisis what would you recommend? Pay off your home so you are free and clear OR use that extra money to purchase all your tangible items for prepardness i.e. pantry, water storage, etc.

Please elaborate the "why" behind your reasoning.

[SethB]

Tangibles or home improvements.

Assuming that you have a fixed mortgage, inflation will cause your payments to be cheaper than they are now.

Of course, it depends on your prospects for maintaining cash flow during hard economic times.

I've look to cut bills (utilities especially) so that you can maintain your cash flow if things do get really bad.

[68W]

I voted split you're money on both...but that is under an assumption of the circumstances. I would go towards paying off the mortgage under a different circumstance.

If the question is based on a situation of normal budgetary planning with no realistic change in income foreseen I say work on both. If you aren't on the doorstep of paying it off and you are just working with a normal income and expenses spread then I think it makes sense to be doing some physical preps and doing extra on the mortgage as your income allows. This way if the real SHTF happens (whatever that may be) then you've done some preparing physically and if it doesn't happen you've made progress on the mortgage, making you better prepped for a more typical economic problem that doesn't involve doomsday type lifestyle.

If we are talking about a scenario where you are about to receive a windfall of cash, like a significant inheritance, that can wipe the mortgage clean in one check or really close, and you don't see a change in your regular income happening then pay it off now. Then all dollars that were allocated to the house out of your typical budget plan can go to physical preps and you'll be sitting pretty in a quick hurry. Of course this also assumes you like the property and its location and want to be there.

To me being free and clear on the house screams "prepared" and "independent." In a terrible economic downturn or a personal economic disaster there wouldn't be too many things more helpful. If we are only considering SHTF like in "The Book of Eli" or "The Postman" then the system is gone and no one will care if you owe on your house or not...physical preps reign there. How you answer this question all depends on perspective and what you think is the most important thing to prep for. Since I don't know what is really likely to be the case I try to balance both.

It's just a real shame that you never really, truly OWN your property free and clear in America. If you miss that bill the tax man sends you Gov't can take it from you regardless how long ago you paid off the note.

[Prairie Patriot]

I voted split you're money on both...but that is under an assumption of the circumstances. I would go towards paying off the mortgage under a different circumstance.

If the question is based on a situation of normal budgetary planning with no realistic change in income foreseen I say work on both. If you aren't on the doorstep of paying it off and you are just working with a normal income and expenses spread then I think it makes sense to be doing some physical preps and doing extra on the mortgage as your income allows. This way if the real SHTF happens (whatever that may be) then you've done some preparing physically and if it doesn't happen you've made progress on the mortgage, making you better prepped for a more typical economic problem that doesn't involve doomsday type lifestyle.

If we are talking about a scenario where you are about to receive a windfall of cash, like a significant inheritance, that can wipe the mortgage clean in one check or really close, and you don't see a change in your regular income happening then pay it off now. Then all dollars that were allocated to the house out of your typical budget plan can go to physical preps and you'll be sitting pretty in a quick hurry. Of course this also assumes you like the property and its location and want to be there.

To me being free and clear on the house screams "prepared" and "independent." In a terrible economic downturn or a personal economic disaster there wouldn't be too many things more helpful. If we are only considering SHTF like in "The Book of Eli" or "The Postman" then the system is gone and no one will care if you owe on your house or not...physical preps reign there. How you answer this question all depends on perspective and what you think is the most important thing to prep for. Since I don't know what is really likely to be the case I try to balance both.

It's just a real shame that you never really, truly OWN your property free and clear in America. If you miss that bill the tax man sends you Gov't can take it from you regardless how long ago you paid off the note.

I'm not as concerned as a Book of Eli doomsday scenario. I'm more worried about my money not being worth squat in the next 3-4 years. That's about the time it will take if we really concentrate on paying off the principal. We are pretty secure in our income so I'm not too worried about losing my job unless something completely disastrous happens. Basically, if the collapse doesn't happen in the next 5 years, then I will be good on most everything including the house being paid off. Just not sure about the gamble.

[lethal dose]

Not being subject to market fluctuation and owning your house is a good place to be. Not sure how to answer your question, though.

[Traveshamockery]

I'm not as concerned as a Book of Eli doomsday scenario. I'm more worried about my money not being worth squat in the next 3-4 years. That's about the time it will take if we really concentrate on paying off the principal. We are pretty secure in our income so I'm not too worried about losing my job unless something completely disastrous happens. Basically, if the collapse doesn't happen in the next 5 years, then I will be good on most everything including the house being paid off. Just not sure about the gamble.

If you're worried about devaluation of money and you have a fixed mortgage, don't pay off the mortgage. Inflation will effectively reduce that cost as the value of the dollar falls. Your preps will have been bought at a low price.

[PA PATRIOT]

Pay off the house and then use the saved monthly mortgage funds to buy your supplies.

[ryr8828]

Depends on your interest rate.

Having a house free and clear is a good thing though.

[nrvnqsrxk]

I would pay off my mortgage. The United States isn't like Croatia.

Sent from my HTC Sensation

[Briman1001]

I would divide it up, between the two. Use a mortgage calculator like http://www.drcalculator.com/mortgage/ to determine an acceptable timeframe in which you can pay off the mortgage early. You can try it out using differing amounts that you pay extra each month and see which fits your needs the most. Even a few hundred dollars a month extra toward principle lowers the amount of interest you pay over the life of the loan and depending on your loan contract can have it payed off much earlier.
I think somewhere in the middle is probably most effective. Another thing to think about is trying to refinance to a 15 year loan. Your rate would drop and again the interest paid would be much less than a 30 year loan. 15 Years goes by pretty quick.