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12-13-2019, 06:33 PM
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#41
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Full time employment: Posting here.
Join Date: Mar 2006
Posts: 524
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What are those bonds worth if you sell them today? What is the effective "interest rate" on that presumably larger amount? Perhaps your wife just feels that you should take that available profit and secure the house.
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12-13-2019, 07:01 PM
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#42
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Recycles dryer sheets
Join Date: Oct 2012
Location: Minneapolis 'burbs
Posts: 382
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 Quote:
Originally Posted by JustCurious
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
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I think the general saying is "Happy spouse, happy house." 
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12-13-2019, 08:35 PM
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#43
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Full time employment: Posting here.
Join Date: Aug 2015
Posts: 987
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Keep the mortgage. You are printing money at that rate.
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12-14-2019, 06:22 AM
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#44
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,396
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Quote:
Originally Posted by Gumby
You must be new to this married business.
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Nope, you must be. 
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12-14-2019, 06:25 AM
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#45
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,141
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I don’t agree with the overwhelming pay it off crowd. Going into retirement with a mortgage is perfectly OK if your cash flow can cover it and you have a terrific deal there.
__________________
Retired since summer 1999.
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12-14-2019, 06:32 AM
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#46
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,141
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Quote:
Originally Posted by Castaspey
Right now I have a substantial balance in a Vanguard MM paying 1.7%, and that is my liquidity source that could cover 3 years of expenses if everything else somehow stopped. Paying the mortgage off would come out of there, and I don't feel like giving up the flexibility of that highly liquid money and convert it into home equity.
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This is a key point - flexibility. Once the loan is paid off, the funds are locked in the house and unavailable any longer unless you refinance or sell.
__________________
Retired since summer 1999.
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12-14-2019, 06:40 AM
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#47
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Moderator
Join Date: Nov 2015
Posts: 13,917
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Your argument for keeping the mortgage makes sense only if it's an A or B question. IE, you have to sell the bonds to pay the mortgage. But I'm gonna guess it's not that simple, you have other, maybe lower-earning funds, to add to the mix?
I was also an "emotional" pay it down person IRL. Fortunately DH was on the same page. We just put it behind us and used the increased monthly cash from having no payment to increase other savings.
It felt good. I considered it in that "money buys experiences" category even if it wasn't technically the soundest financial decision. If your wife understands this, and your position, and she isn't a twit but is basically saying "i know... but I'd still feel better if..." then I agree with your wife.
Marital decisions do not do well if one goes "well I asked on the internet and most people agree with me..."
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12-14-2019, 06:41 AM
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#48
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Administrator
Join Date: Apr 2006
Posts: 23,037
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Quote:
Originally Posted by JustCurious
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
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Quote:
Originally Posted by Gumby
You must be new to this married business.
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Is that you, Mick? Cool.
__________________
Living an analog life in the Digital Age.
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12-14-2019, 08:47 AM
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#49
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,396
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If someone says "Happy husband, happy life" then it is inferred that his wife must be under his thumb...but if someone says "Happy wife, happy life" then most people nod in agreement as if that is wise advice. I don't get that double standard.
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12-14-2019, 08:55 AM
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#50
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,368
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Quote:
Originally Posted by audreyh1
I don’t agree with the overwhelming pay it off crowd. Going into retirement with a mortgage is perfectly OK if your cash flow can cover it and you have a terrific deal there.
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Not really since the OP has said that he has money in a Vanguard MM fund earning 1.7% that would be used to pay off the mortgage. So the more relevant comparison is the 2.625% that he is paying in mortgage interest and the 1.7% he is earning on the Vanguard MM fund. So with a $140k mortgage he would be ahead abotu $1,200+ in the first year... enough for a nice dinner a month with his DW.
The 4.6% bond portfolio return is irrelevant because that would be kept if he keeps the mortgage or pays off the mortgage.
Quote:
Originally Posted by Castaspey
I appreciate the humor that other people have brought to the discussion; I had hoped that the title of the thread might create the space for that.
... Right now I have a substantial balance in a Vanguard MM paying 1.7%, and that is my liquidity source that could cover 3 years of expenses if everything else somehow stopped. Paying the mortgage off would come out of there, and I don't feel like giving up the flexibility of that highly liquid money and convert it into home equity.
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__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-14-2019, 08:58 AM
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#51
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,141
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Yes, I understand that. But I also understand why he doesn't want that Vanguard MM money locked in his house equity.
__________________
Retired since summer 1999.
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12-14-2019, 09:01 AM
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#52
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,368
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I get that but if he keeps the mortgage then that increase in home equity is going to happen either way. If liquidity is a huge concern he could get a HELOC after he pays off the mortgage.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-14-2019, 09:03 AM
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#53
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Administrator
Join Date: Apr 2006
Posts: 23,037
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Quote:
Originally Posted by JustCurious
If someone says "Happy husband, happy life" then it is inferred that his wife must be under his thumb...but if someone says "Happy wife, happy life" then most people nod in agreement as if that is wise advice. I don't get that double standard.
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Humor is like a frog. You can dissect it, but it tends to die in the process.
__________________
Living an analog life in the Digital Age.
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12-14-2019, 09:05 AM
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#54
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,019
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Quote:
Originally Posted by JustCurious
If someone says "Happy husband, happy life" then it is inferred that his wife must be under his thumb...but if someone says "Happy wife, happy life" then most people nod in agreement as if that is wise advice. I don't get that double standard.
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+1 I don't like sayings like this because they reinforce stereotypes.
Any financial decision involves both analytics and emotions. I'm firmly in the "no debt" camp, even in cases where the math shows that I might come out a few bucks ahead carrying some debt. There's something priceless about being debt-free.
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12-14-2019, 09:12 AM
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#55
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,396
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Quote:
Originally Posted by Gumby
Humor is like a frog. You can dissect it, but it tends to die in the process.
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I guess I don't get the joke.
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12-14-2019, 09:23 AM
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#56
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,141
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Quote:
Originally Posted by pb4uski
I get that but if he keeps the mortgage then that increase in home equity is going to happen either way. If liquidity is a huge concern he could get a HELOC after he pays off the mortgage.
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Ummm - he already has an excellent HELOC 
He could always choose to pay down part of it.
__________________
Retired since summer 1999.
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12-14-2019, 09:39 AM
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#57
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,368
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^^^ You seem to be totally ignoring the $1,200/year of savings.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-14-2019, 01:26 PM
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#58
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 2,232
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We had a similar discussion, with a 2.75% mortgage. In our case, keeping the mortgage allowed us to use the cash to live on, keeping our MAGI under the ACA threshold, saving us beaucoup $ in medical insurance premiums. Also, saved us income tax money for a few years.
Alas, this will be the last year, as the after tax money is getting a little thin. Next year we'll bite the bullet and start pulling from IRAs, but we got 4 years out of it.
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12-14-2019, 03:26 PM
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#59
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Thinks s/he gets paid by the post
Join Date: Jan 2017
Location: Hog Mountian
Posts: 2,077
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Quote:
Originally Posted by audreyh1
I don’t agree with the overwhelming pay it off crowd. Going into retirement with a mortgage is perfectly OK if your cash flow can cover it and you have a terrific deal there.
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+1.
We are in the process of obtaining a 30 year mortgage. Because we can (cash flow), and for us, it makes perfect sense. Fairly certain we'll both be happily composting long before that "death pledge" is paid off. 
__________________
Never let yesterday use up too much of today.
W. Rogers
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12-18-2019, 05:53 PM
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#60
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Dryer sheet wannabe
Join Date: Dec 2019
Location: Half way between the Grand Canyon and Yellowstone
Posts: 20
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In a low interest rate environment, holding a mortgage that is offset by cashflow doesn't seem like a universally bad idea.
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