Quote:
Originally Posted by Maynard
Related to paying ahead towards principle in order to shorten the payoff time: Would it not make more sense for long term to put that extra money into a stock fund that can earn >6% rather than paying down the mortgage that is only 3%, (once you are off PMI)? Is there something I'm missing in this?
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in average / expected return term, yes, but in real life, we don't always get the average / expected return. depending on your age/risk appetite you make a different decision.
if you're in your 20s no kids sure put the majority of your wealth in the stock markets but as you age, got kids to support / future college bills to pay you gradually dial down your risk tolerance because you can't afford to be unlucky and take a 20% drop in your asset valuation that happen at the time you need the cash...