By Scott Fitzgerald

Staff Writer



A home can be a consumer’s most prized and coveted possession.

Or, it can lead to limitless headaches as people scramble around each month to make the mortgage payment that can be their largest monthly bill.

Financial counselor Dave Ramsey, who writes a syndicated column that runs in the Sunday business section of the News & Eagle, tackles mortgages in his advice to help people get out of debt and gain financial stability.

“He talks about it all the time. It’s No. 6 of his seven baby steps,” said spokeswoman Beth Tallent of Ramsey’s enterprise that includes books and public presentations. His radio show can be heard 2 to 4 p.m. weekdays on KGWA (960 AM).

Ramsey’s baby steps toward financial security, taken in chronological fashion, are to build a $1,000 emergency fund, get out of debt, increase the emergency fund to three to six months expenses, stash money away for retirement and a child’s college fund before knocking out the home mortgage.

“A mortgage payment is the only debt Dave doesn’t get upset over,” Tallent said.

When people reach Ramsey’s home mortgage step, they are usually “revved up and excited” because they’ve gotten rid of personal debt, Tallent said.

Getting rid of a home mortgage further makes a person feel rich because that person doesn’t have to send money away to someone else.

“The grass feels greener under your feet,” Tallent said.

Enid tax accountant John Stambaugh said from a moralistic standpoint, Ramsey’s advice is appropriate.

“If your house is paid for, you’ve got a place to live,” Stambaugh said.

But, from a purely economic standpoint is it the best decision to navigate the cash flow?

Stambaugh said no or at the least reconsider in terms of getting the most from your buck.

Many investment options can offer a larger return on someone’s money down the road than the amount saved from paying off a mortgage early to curb, or in some cases, negate interest altogether, Stambaugh said.

“That’s my line, also,” said Brad Blankenship, Security National Bank president. “Individuals need to decide what’s making the most money for them.”

Many financially prudent people have taken advantage of low mortgage interest rates to get other means of cash, such as home equity loans.

“We rarely see 30-year notes anymore. Most mortgages will turn within a seven- to 10-year period,” Blankenship said.

As for investment value, Enid’s residential real estate market took a big hit in the early 1980s with the oil bust that depreciated many residential properties.

It has turned the other way since, and the positive signs are evident.

“We are seeing some (property) appreciation gains. New construction is visibly evident. There is a value increase per square foot. Costs are driving it,” Blankenship said.

What the option ultimately boils down to when the numbers are crunched and what stream someone’s money is going to travel is discipline, said R.S. “Brud” Baker, president of Central National Bank.

People analyze the numbers, their tax brackets and what on paper is their best option. It’s another story, however, to carry out on those plans.

“Would you really invest that money?” Baker said, is what people with a surplus should ask themselves as they are deciding where to invest it whether it be a home mortgage or other financial instrument.

“There’s a discipline built into a home mortgage loan. You don’t owe any money on your house. You feel good. Emotionally, it’s a whole different world,” Baker said.