Why is this True? Think RISK. When you have a mortgage and lose your job and can't get another one, your sunk. Why? Your house has probably lost value and you probably can't sell it at a decent price in this market.
You Short-Sale it and find the IRS coming after you later. Or you let it go into foreclosure and prospective Employers asking 'what happened to your Credit Rating'? Or you have a major illness and can't work anymore: Your Screwed.
The issue is RISK. Dave says, "I found that 100% of foreclosures take place on houses with mortgages."
After we paid off the house, we found we could breath financially and year after year it gets better. We can't explain it - it's just the mindset you have after you've done it. The way you Save for things where before you just reached for the credit card. Or how you play off one vendor off another to get the best deals on Roof, Siding, A/C, and plumbing because you learned how to save for these things than getting slammed by them.
Yes, the Paid off Home Mortgage is better than the BMW. Why? Because I am free of the Banks Ball-And-Chain! So I'll scream with my family "I'm debt free" with Dave, because or families financial tree has rooted and is Growing!
I live in a smaller house here in the ‘hood in Memphis. I paid it off 2 months before the crash in 2008. I had been telling my wife it was coming for over a year and it was a great relief on her to know it was paid for.
When she was worrying a few months later about her job, I told her that with the house paid for, we would get by. That calmed her down. The 2 cars were paid off in 2010 and I have no credit cards. I don’t see how anyone can get by in this economy in heavy debt. Hell, I still am not saving much and I have almost no bills. Everything else (food, gas, electricity) has gone up so much it eats into any possible savings.