A new debate on paying off the mortgage (or not).

[JustCurious]

Originally Posted by Bikerdude

The mortgage allows me to deduct health care expenses, property taxes, charity and state taxes.

You make some good points, but remember that property taxes are now partially tax deductible (at least for 2008 ) even for those who take the standard deduction.

[unclemick]

Sooo - I take it nobody is telling me to exactly time the housing bottom - buy a house with a humongous mortgage - live in it two years while I do Roth conversions - then sell and downsize with the profits.

Still with the rent idea - in fact though I don't do it.

heh heh heh - this is a fun thread - even though I bought a small house(aka the right size) post Katrina with a 30 yr fixed - cause I couldn't find a rental I liked.

[Want2retire]

Originally Posted by unclemick

Sooo - I take it nobody is telling me to exactly time the housing bottom - buy a house with a humongous mortgage - live in it two years while I do Roth conversions - then sell and downsize with the profits.

Still with the rent idea - in fact though I don't do it.

heh heh heh - this is a fun thread - even though I bought a small house(aka the right size) post Katrina with a 30 yr fixed - cause I couldn't find a rental I liked.

'Twas ever thus. I am hoping to find something bearable to rent for my first year in Springfield, after we move up there in 2010. That would be the sensible thing to do in a new location. I am counting a year's rent as part of the moving expenses.

But I might end up buying right off the bat, because most rentals don't really knock my socks off. And gosh - - I can buy a house with everything I want or need for nearly nothing. Resale in Springfield could be a huge problem, though, if we ended up having second thoughts about moving there.

[Alan]

I had an interesting discussion with a friend of mine today on this. He is 62 and ready to retire but he is still uncertain. He works for a small company and a large part of his income comes from his annual bonus based on the company's profits. He is expecting a large bonus this year and was wondering about if he should pay off his mortgage. He has 55% equity and the rate is 5.5%. I said that I assume he has built up a wad of cash to retire next year so 5.5% is a pretty good deal so if I was him that is what I would consider doing.

He will probably pay off his mortgage but for quite a different reason. He has no wad of cash as his wife always finds ways to spend it so paying off the mortgage will keep it out of her hands. He said if an emergency came up he could always borrow against the house later - cash reserves were not an option with his wife

They are a lovely couple, married 35 years with 2 sons and 4 grandchildren but obviously quite different views on money. She has been a teacher all her working life and will retire with a pension, and he will have 401(k) money from his company plus SS so they are going to be fine. DW and I are so fortunate that our views on money are so similar.

I thought I would share this as a different reason for paying off the mortgage.