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[kiosk]

We are underwater on your house and may need to sell it in 4-5 years (TT at R1, so who knows). Should our extra money go towards the mortgage or into other savings? 

Details: We have $3000/mth to put someplace. No other debt (thanks to motivating posters last year!), and retirement and emergency fund covered. We pay PMI, but to get rid of it we need $90k today (we need 80% LTV of current value, so this amount has doubled on us already and will just increase as prices keep dropping). Our loan is 30 year fixed at 6.25%.

We are stuck on this one, so thanks for the help!

kiosk

[clean]

Congrats on being Debt Free!  Isnt it a great feeling?!!

If you were following Dave Ramsey's Baby Steps, you are in steps 4, 5, and 6.   At this point you should be saving 15% toward retirement.  If you have youngins, you should be saving for their education, and paying off the mortgage. 

At 3000 a month, I dont think that it could be too long before you would be completely debt free.  Then you will have the extra $3000 AND the house payment to invest. 

Then, no matter if you whether you have tenure or not, as long as you can pay taxes and insurance, you will always have a house.  Think how freeing it would be knowing that you could live in that house by working at Walmart.  Being completely debt (and risk) free is pretty freeing!

Good luck.

[pedanterast]

Before you take financial advice from Dave Ramsey, you might want to consider that he had to file for bankruptcy.  Clean doesn't seem to ever mention that.

[expatinuk]

Before you take financial advice from Dave Ramsey, you might want to consider that he had to file for bankruptcy.  Clean doesn't seem to ever mention that.

I'm getting bored with the constant bickering between you two.

[womanofproperty]

I agree with expatinuk.  I'm interested when there's disagreement regarding financial issues and alternative views of situations - that's informative.  I stop reading when comments are directed at a person rather than an issue.

[aneumey]

Well, Dave Ramsey did file for bankruptcy in the early 80s, but that was before adopted the principals he uses. I have never heard anyone suggest that doing what he teaches makes people go broke.  Most criticism I have heard is along the lines that he is too risk averse due to the bad experience of going broke.  And I would definitely agree with Ramsey and Clean on this one.  Beyond having some emergency money, you are much better off building equity in your home and getting rid of the PMI as soon as possible - the cost of the PMI is going to more than negate any gains you make by investing over that period of time.