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View Poll Results: Why do have or dont have a mortgage
More invested money working for me 30 24.19%
I have an income to pay the mortgage 26 20.97%
Fixed income investments are paying lousy 6 4.84%
Reduced withdrawal rate 7 5.65%
If we have a big downturn, I wont have to pay a big mortgage bill every month 12 9.68%
Have one to provide tax advantages 16 12.90%
Dont have one to provide tax advantages 4 3.23%
Property owners are crazy 0 0%
I couldnt have bought a house without one 23 18.55%
Voters: 124. You may not vote on this poll

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Reason for holding a mortgage...or not
Old 02-18-2006, 12:31 PM   #1
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Reason for holding a mortgage...or not

The three primary reasons why you do or dont have a mortgage, and thank you very much for your participation. Your free hat is in the mail!
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 12:48 PM   #2
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Re: Reason for holding a mortgage...or not

Quote:
If we have a big downturn, I wont have to pay a big mortgage bill every month
What's with that?* If we have a big downturn,* how are you going to pay your property taxes?* I'm gonna use the money I did not use to pay off my mortgage*to make my monthly payment and to pay the property taxes

How many readers have a sub-5% fixed interest rate mortgage? You aren't paying extra on it are you?
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 12:50 PM   #3
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Re: Reason for holding a mortgage...or not

You left one out: I have a mortgage because I otherwise did not have the money to buy a house.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 12:52 PM   #4
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Re: Reason for holding a mortgage...or not

I don't have a mortgage but the reason why isn't among your list. I don't like to owe money. So I don't care whether or not it makes more sense financially to carry a mortgage on a house because I feel better being debt-free.

yko
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:02 PM   #5
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Re: Reason for holding a mortgage...or not

Yeah, YKO's reason needs to be there to get a clear picture of people's reasoning. (IMHO).

To me it is a practical reason. Right now, while working and in higher tax bracket, I will keep the mort. for tax deduction.

The rate is 4.75, so I can earn about the same in safe investments, the tax break tips the balance toward keeping it.

If I had a 5.5 rate or higher I think I'd pay it off.

If the payments were high enough to be scary, (i.e. affecting withdrawal rate in down market, etc.) I'd pay it off, but they are only $428/mo. so it's relatively painless while still working.

Even after quitting, it adds less than $5,200 to the annual budget. I shouldn't be cutting it that close anyway.

I think the payoff decision is quite different for people with higher amounts, or higher rates.

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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:06 PM   #6
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by LOL!
What's with that? If we have a big downturn, how are you going to pay your property taxes? I'm gonna use the money I did not use to pay off my mortgage to make my monthly payment and to pay the property taxes

How many readers have a sub-5% fixed interest rate mortgage? You aren't paying extra on it are you?
Easy answer. If my stocks drop 50%, I dont have to take 12-25K+ a year out of that depleted portfolio to pay a mortgage every month. And if they drop 90% I can earn enough money at the quick-e mart to buy food and pay the utilities.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:06 PM   #7
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by brewer12345
You left one out: I have a mortgage because I otherwise did not have the money to buy a house.
Added.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:07 PM   #8
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by Yipee-Ki-O
I don't have a mortgage but the reason why isn't among your list. I don't like to owe money. So I don't care whether or not it makes more sense financially to carry a mortgage on a house because I feel better being debt-free.

yko
I captured that in one of the other polls, but good point.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:08 PM   #9
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by Sheryl
I think the payoff decision is quite different for people with higher amounts, or higher rates.
Thanks Sheryl - i'm trying to stay out of the payoff quagmire, just trying to find reasons why someone does or doesnt have it for profiling purposes.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 01:43 PM   #10
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by (Cute Fuzzy Bunny)
Thanks Sheryl - i'm trying to stay out of the payoff quagmire, just trying to find reasons why someone does or doesnt have it for profiling purposes.
Well, yeah,* good luck with that.*
If you don't have one, either you rent or you paid it off.*
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 02:05 PM   #11
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by Sheryl
...

If I had a 5.5 rate or higher I think I'd pay it off.

...
If prevailing CD rates were 6% would you still think that?

A reason I ask is that a couple years ago when prevailing CD rates were 3% and mortgage rates 4.5%, folks would say "Why pay 4.5% when you are earning 3%?" and look at where rates went.

Many folks believe that Bernanke et al will continue to raise rates, so CD rates will be going up.

You got to plan ahead.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 02:18 PM   #12
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Re: Reason for holding a mortgage...or not

Quote:
Originally Posted by LOL!
If prevailing CD rates were 6% would you still think that?*

You got to plan ahead.
No, I wouldn't think that, and I agree with your point that you need to plan ahead. Again, its all about personal situation, and constantly reevaluating your position given current conditions and what your crystal ball says.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 02:21 PM   #13
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Re: Reason for holding a mortgage...or not

Just looking for the reasons here, not a debate on whether they make sense.

Please.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 02:27 PM   #14
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Re: Reason for holding a mortgage...or not

We have a 5.375% 30-year mortgage with NFCU (now only available at 5.875%), and this week they raised their seven-year CD to 5.5%.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 04:36 PM   #15
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Re: Reason for holding a mortgage...or not

We have no mortgage on our house in Illinois, nor on the Texas condo. The Number One reason, honestly, is to protect me from myself. I see "deals" everywhere and many many ways to
"invest" the money locked up in our homes. Psychologically, living with no mortgage is what works for me. My folks recently deeded
over their house to me and my brother. No mortgage there
either. Taking all three (3) properties, it's a lot of money........
close to half of our net worth.

JG
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 04:41 PM   #16
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Re: Reason for holding a mortgage...or not

Yeah - I'm definitely one of those who paid off their mortgage, because they don't like holding any debt at all. It's more of a philosophical thing.

I don't even own a house anymore! I live in a motorhome. And I paid cash for it.

Audrey
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 04:46 PM   #17
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Re: Reason for holding a mortgage...or not

This might sound strange but my first goal in life was to pay off the mortage. When my grandmother died I wanted to purchace her/my home ( I lived with her) unfortunately those were the days that banks wouldn't give mortgages to 25 yr old single women. I went thru hell trying to get a bank to loan me the money, eventually my dad had to talk to the president of the bank he dealt with for his construction business. They gave in and wrote the mortgage for me but he told my dad the board did it as an exception because they didn't want to lose his business. My how things have changed huh? Oh and the rate I had to take was 17.5% ..yep.. that was the going rate back then no matter who you were. This summer I'm having a small party to burn copies of the mortgage and the business loan.

My next goal is to retire, hopefully before I reach 55 but who knows, maybe sooner.
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 05:58 PM   #18
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Re: Reason for holding a mortgage...or not

I'm probably a minority here but being Canadian there are no tax advantages to having a mortgage... make that few. We can't deduct mortgage interest unless we borrow to invest. I seem to have enough investments relative to the value of our house that the risk of rising rates, falling RE values aren't wort it.

Besides, I like being debt free!
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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 06:47 PM   #19
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Re: Reason for holding a mortgage...or not

Outtahere,

I just have to ask. What year was it that you tried for a loan on your grandmothers house? Having had an experience trying to get a mortgage after a divorce at a young age, I want to know if it was just the times......

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Re: Reason for holding a mortgage...or not
Old 02-18-2006, 07:11 PM   #20
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Re: Reason for holding a mortgage...or not

It was 1980, womens rights had come a long way but the stuffy old suits holding the money still had a strangle hold on things and discrimination against the female gender was still pretty rampant. I was there with my father when he went off on the bankers and he was the ONLY reason I got the mortgage and you can bet your butt I never let him down by being late or missing a payment.
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