- We want to build up savings to the recommended three to six months worth of expenses. If my husband lost his job , savings and investments will help a lot more than a lower mortgage balance.
- We want to save money to make a down payment on a new car when one is needed.
- Although I'm not sure about this, I think having a mortgage may result in more financial aid when the boys go to college. Even if we paid an extra 1K a month (ouch!), we wouldn't pay off the mortgage for another eleven years, which is about the time our first will be heading off to college. My guess is his college would be happy to help us out with that sudden extra cash flow.
We don't have credit card debt to pay off, and rollup into the next debt. But we will use future raises to increase our ShareBuilder allotment, and when we pay off our HELOC, we'll increase our savings amount by that figure (as we did recently with our car payment).
If we didn't have an automatic savings plan, or our weren't disciplined enough to use it, paying off the mortgage might work -- but I think it's a big risk to put extra money into a mortgage without an emergency savings stash.
There are a lot of articles on both sides of this argument -- I like this one: http://www.fool.com/foolu/askfoolu/2001/askfoolu010307.htm.