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Retire my mortgage
Old 03-11-2015, 08:47 PM   #1
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Retire my mortgage

with some luck, I bought some AAPL in Jan14. Just cashed it in. I have 6 years left on my mortgage. I plan to use the proceeds to pay it off this week. AAPL may jump after April share buy back announcement. But right now, I'm without any debt for the first time . Yeah, this is how I feel.
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Old 03-11-2015, 09:45 PM   #2
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Old 03-11-2015, 10:07 PM   #3
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Well done! Are you going to name your house the Apple House?
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Old 03-12-2015, 07:30 AM   #4
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Tremendous! How do you plan to celebrate?
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Old 03-12-2015, 07:38 AM   #5
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Good for you! It's a great feeling not having the house payment anymore.
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Old 03-12-2015, 02:05 PM   #6
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Congrats! That's my goal this year and I can't wait!
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Old 03-12-2015, 02:59 PM   #7
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We did the same thing!
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Old 03-13-2015, 10:25 PM   #8
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It's funny. you people on this forum are the only people we share the joy with. How do we celebrate it? I adjust my elex salary to diverge more $ to my kids 529s since I already max out 401k and Roth. I took DW to Chima, Brazilian steakhouse to indulgent ourself. Unconsciously, you people have influence and inspire me. Thank you. Sparing any unforseen stuff that life can throw at us, plan to w*401k for 10 more yrs.
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Old 03-13-2015, 10:57 PM   #9
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It's funny. you people on this forum are the only people we share the joy with. How do we celebrate it? ...
Just to get some alternate viewpoints out there, you should be aware that there are quite a few of us successful retirees who have absolutely no problem carrying a mortgage into retirement. I honestly can't understanding why moving money from one account to another is a cause for celebration. That's really all you are doing.

IMO, based on a fair amount of study of the subject, paying down a reasonable rate mortgage is probably one of the least important decisions/events in achieving FIRE. And these historically low mortgage rates are on the side of helping, not hurting.

Now, having the ability to pay off the mortgage - that is certainly a milestone worth celebrating. But whether you decide to do it or not is... meh.

-ERD50
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Old 03-14-2015, 09:28 AM   #10
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I agree with the last post. In fact, I'd refinance my house on a 30 year mortgage at 3.875% right now and make payments for 30 years with your account balance sky high from the money you took out. With the interest rate interest deduction, it's almost a free loan. Why pay off a mortgage? Peace of mind? I'd rather have stacks of cash in the bank, personally! Keep this in mind; the payments you make will become "less" over the years due to inflation.


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Old 03-14-2015, 12:27 PM   #11
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" I honestly can't understanding why moving money from one account to another "
True - My net worth is definitely unchanged from last week to this.


"Based on a fair amount of study of the subject, paying down a reasonable rate mortgage is probably one of the least important decisions/events in achieving FIRE".


I am aware of endless debate on this forum about for and against paying off mortgage. For me, it's more of an psychological decision than economical one. Quoting Ziggy29:
"Well, here's another way to look at it.

Let's say you have the ability to pay off a $100,000 mortgage at (say) 6%. You ask whether or not you should pay off the mortgage. A lot of people would say no because you can likely invest it at a higher long-term return, plus potential tax breaks for keeping the mortgage.

Now ask the same people: If you owned your home free and clear, would you borrow $100K against it at 6% to invest?

A lot of the people who would NOT pay off the home with a $100,000 lump-sum windfall would also NOT go $100K into debt to invest.

But these are essentially identical situations; the choice is whether you prefer to have $100,000 and a $100K mortgage or you have a paid-off home. But sentiment often changes depending on which way you approach it"


"I honestly can't understanding why moving money from one account to another is a cause for celebration."
For me, it's a little more than that. When DW and I started out 15 years ago, we both had about $1K combined, prior entering college, struggling with rent. So this is a big millstone for us. If a student went thru 4 years in college. He finishes all the courses and get a diploma. The act of getting a diploma does not make him smarter than he was the day before that. But he is well deserved a celebration especially the circumstances stacked against him in beginning.


I don't think we will ever change our LBYM lifestyle. But we will celebrate in this occasion.
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Old 03-14-2015, 03:27 PM   #12
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Originally Posted by NextInLine View Post
...

I am aware of endless debate on this forum about for and against paying off mortgage. For me, it's more of an psychological decision than economical one. Quoting Ziggy29:
"Well, here's another way to look at it.

Let's say you have the ability to pay off a $100,000 mortgage at (say) 6%. You ask whether or not you should pay off the mortgage. A lot of people would say no because you can likely invest it at a higher long-term return, plus potential tax breaks for keeping the mortgage.

Now ask the same people: If you owned your home free and clear, would you borrow $100K against it at 6% to invest?

A lot of the people who would NOT pay off the home with a $100,000 lump-sum windfall would also NOT go $100K into debt to invest.

But these are essentially identical situations; the choice is whether you prefer to have $100,000 and a $100K mortgage or you have a paid-off home. But sentiment often changes depending on which way you approach it"
First off, is that even true? I've never seen a scientific study that showed some significant % of people with the ability to pay off a mortgage would not see the contradiction in the above scenario. I find that people often put up these possible straw-man scenarios to make their point.

Even if true, all it does is point out that those people aren't looking at the situation clearly. That doesn't change anything else.


Quote:
"I honestly can't understanding why moving money from one account to another is a cause for celebration."
For me, it's a little more than that. When DW and I started out 15 years ago, we both had about $1K combined, ....
And as I said: "Now, having the ability to pay off the mortgage - that is certainly a milestone worth celebrating." . So I understand celebrating the ability, but I continue to not understand that actual act.


Quote:
If a student went thru 4 years in college. He finishes all the courses and get a diploma. The act of getting a diploma does not make him smarter than he was the day before that.
True, but not a good analogy IMO. Having or not having the degree absolutely will make a difference to an awful lot of potential employers (Bill Gates and Steve Jobs not withstanding). The mortgage pay-off has no analogous benefit that I can see.

-ERD50
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Old 03-14-2015, 05:36 PM   #13
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Originally Posted by ERD50 View Post
Just to get some alternate viewpoints out there, you should be aware that there are quite a few of us successful retirees who have absolutely no problem carrying a mortgage into retirement. I honestly can't understanding why moving money from one account to another is a cause for celebration. That's really all you are doing.

IMO, based on a fair amount of study of the subject, paying down a reasonable rate mortgage is probably one of the least important decisions/events in achieving FIRE. And these historically low mortgage rates are on the side of helping, not hurting.

Now, having the ability to pay off the mortgage - that is certainly a milestone worth celebrating. But whether you decide to do it or not is... meh.

-ERD50
crap..I just posted a similar question on a new post...didn't see this one working. Sitting back to hear everyone's answer now...
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Old 03-14-2015, 05:46 PM   #14
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crap..I just posted a similar question on a new post...didn't see this one working. Sitting back to hear everyone's answer now...
That new thread is here:

Poll -New debt in retirement?

I think it will probably get more discussion in your new thread which is really a slightly different topic.
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Old 03-14-2015, 06:39 PM   #15
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[QUOTE=ERD50
True, but not a good analogy IMO. Having or not having the degree absolutely will make a difference to an awful lot of potential employers (Bill Gates and Steve Jobs not withstanding). The mortgage pay-off has no analogous benefit that I can see.

-ERD50[/QUOTE]

Fair enough, how about this: a casual runner train for a marathon for a year that include couple long run of 26 miles. The cardio/health benefit of training is already harvested. The race itself has little added benefit compare with the year of hard work. But he sure is deserved a celebration.
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Old 03-14-2015, 08:03 PM   #16
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Fair enough, how about this: a casual runner train for a marathon for a year that include couple long run of 26 miles. The cardio/health benefit of training is already harvested. The race itself has little added benefit compare with the year of hard work. But he sure is deserved a celebration.
OK, I'll play.

For this viewpoint, I think it all depends on your goal. If your goal is cardio/health benefit, then you achieved it through training, and the actual race is really of no consequence, and would not warrant any celebration. You already 'won'. Celebrate the real 'win'.

So for the race to be a celebration, it must, in some way, actually be a goal in and of itself (even if they are not aware of it).

So take this back to a mortgage pay-off. The way I see it, and as I said before, having the ability to do the pay-off is what is key - analogous to the cardio/health benefit in your example.

And for the pay-off to be a celebration, it must, in some way, actually be a goal in and of itself.


So now, I think you could be asking yourself - why is the pay-off itself a 'goal'? What is to be gained by it, versus the alternatives? By saving and having the ability to pay it, you proved yourself, now make the best decision going forward - pay it off, or not?

And like I said, I'm not saying either is a clear advantage. Pay it off, don't pay it off, I see it pretty much as six of one, half a dozen of the other. Though I do feel that the historically low rates available make keeping a mortgage attractive, I don't feel that strongly about it to suggest that it is the 'right' thing to do, or a mistake not to keep it. But I don't understand celebrating it either.

Ahhh, this takes me back to previous discussions on this now. So look at it this way (in light of what I just said) - to pay it off or not is a binary decision, you do it or you don't do it, right? So therefore (using pure logic), if a pay-off is to be celebrated, then not paying it off must be some reason to feel pitifully sorry for those poor, suffering souls with the heavy burden of an awful mortgage, who must not be smart enough to pay it off, even if they have the funds to do it. See, by celebrating it, you are sort of (unintentionally I'm sure), ridiculing anyone who holds a mortgage with the funds to pay it off. That follows, doesn't it?

The thing is, this mortgage pay-off is so often held up as some sort of silver bullet to achieving FIRE, when it is practically irrelevant, and may even be detrimental. I just wish people would focus on more important things.

-ERD50 (are we having fun?)
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Old 03-15-2015, 07:37 AM   #17
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OK, I'll play.

True, but not a good analogy IMO. Having or not having the degree absolutely will make a difference to an awful lot of potential employers (Bill Gates and Steve Jobs not withstanding). The mortgage pay-off has no analogous benefit that I can see.

-ERD50 (are we having fun?)
I'm having fun.

I put it in slightly different time line. If a student went thru 4 years in college. He finished his last final mid-May; Had a walk following week and the diploma wont mail to him until July. All the relevant fruits fall under the first and, as you pointed out, last act. But most people would celebrate after the least consequential, but has a celebratory marker occasion.

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Originally Posted by ERD50 View Post
OK, I'll play.

...
The thing is, this mortgage pay-off is so often held up as some sort of silver bullet to achieving FIRE, when it is practically irrelevant, and may even be detrimental. I just wish people would focus on more important things.

-ERD50 (are we having fun?)
No, I definitely don't view owning your house clean and clear as a silver bullet to achieving FIRE. I plan to down size as soon as I RE. I 'd view the equity of this pay off home is just a slice of the whole pie.
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Old 03-15-2015, 07:47 AM   #18
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Negative to paying off mortgage:
You "probably" can make more if you invest the money

Positives to having no mortgage
You don't have to give your money to someone else every month
If the housing markets collapse, you can't be underwater
Your monthly cash flow has more freedom of what to do with it. This one means a lot to me.

I know that intellectually, in today's interest environment, paying it off is a little better, but emotionally I love that it's gone and will not go back.
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Old 03-15-2015, 08:07 AM   #19
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..... Let's say you have the ability to pay off a $100,000 mortgage at (say) 6%. You ask whether or not you should pay off the mortgage. A lot of people would say no because you can likely invest it at a higher long-term return, plus potential tax breaks for keeping the mortgage.

Now ask the same people: If you owned your home free and clear, would you borrow $100K against it at 6% to invest?

A lot of the people who would NOT pay off the home with a $100,000 lump-sum windfall would also NOT go $100K into debt to invest.

But these are essentially identical situations; the choice is whether you prefer to have $100,000 and a $100K mortgage or you have a paid-off home. But sentiment often changes depending on which way you approach it"....
I agree with the above and that is close to what I did... I did a cash out refinance at 3.375% and invested the proceeds from the refinance. While I would not do it at 6%, 3.375% was too good to pass up... plus I reduced my rate on then existing mortgage by 1.425%.
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Old 03-15-2015, 08:27 AM   #20
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A long time ago we got a raise and decided we could dedicate it to paying down our mortgage. Instead of making extra payments, we decided to invest the money in a mutual fund and when the money in the fund became equal to the remaining balance on the mortgage, we would pay off the mortgage. When that day came, we had a celebration and went out to a nice dinner, but we decided not to pay off the mortgage. Just having enough money dedicated in a separate mutual fund that could pay off the mortgage was enough peace of mind for us. Considering that the fund has more than doubled since that day about 4-5 years ago, Id say we made the right decision.

We've recently retired and will be moving in 3 months. We will sell the house, pay off the mortgage and have a lot of money left over. Of course our timing could've been bad and it could've all worked out differently but based on our low mortgage rate, I liked our chances. All that to say I agree that the celebration should be over the fact that you are able to pay off the mortgage, not that you actually do it.
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