Pay off house early-staying power-what is it?

<<>> You should pay off your house early only if you have staying power. Staying power is the money you have in your bank account. This money should be used for emergencies. Emergencies are when you lose your job or something of that nature, not when you get hungry for pizza.

Before you consider buying a home you should have your 20% down payment and an additional $15000 in the bank that can be used for emergencies. As a full time real estate appraiser, I see way too many people using their homes as instant ATM machines. The problem is once they put their money into their home sometimes they are not able to get their money out. Do you know why?

Maybe you lost your job and now the bank won’t give you a new loan. In this case, you’ll sit there until you run out of money and you’ll have to give you home to the bank with all of the equity that you’ve built up. What a shame. When you’re taking out a loan, the bank may require you to pay down points to get a better interest rate. If you don’t have cash, you can’t pay points, therefore you’re interest rate may be higher. Did you open your own business? Banks don’t like risk and they’ve been burned by so many home owners that they run the other way, if you are a new business owner. Many banks won’t give you a loan in this case and if they do, the interest rate will be high as a result.

Whatever the reason, it may be difficult to get your money back out of your home if your situations have changed since you became a home owner. When home prices are going up significantly, it saved a lot of people. As the saying goes, what goes up must come down.

Now I’m seeing people losing their home because they don’t have any staying power. Staying power is the money you have in the bank. Don’t buy a home until you have some staying power. The more staying power you have, the better off you and your family will be. Don't pay off your house early,until you have staying power.