Helping spouse understand my brilliance

[audreyh1]

Yes, I understand that. But I also understand why he doesn't want that Vanguard MM money locked in his house equity.

 

[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.

 

[Gumby]

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.

Humor is like a frog. You can dissect it, but it tends to die in the process.

 

[Which Roger]

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.

+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.

 

[JustCurious]

Humor is like a frog. You can dissect it, but it tends to die in the process.

I guess I don't get the joke.

 

[audreyh1]

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.

Ummm - he already has an excellent HELOC

He could always choose to pay down part of it.

 

[pb4uski]

^^^ You seem to be totally ignoring the $1,200/year of savings.

 

[HadEnuff]

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.

 

[Red Badger]

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.

+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.

 

[Castaspey]

In a low interest rate environment, holding a mortgage that is offset by cashflow doesn't seem like a universally bad idea.

 

[W2R]

Pay it off!! It won't kill you and you can move on to other, more interesting facets of life.

 

[troutnut1]

I sleep better in a home without a mortgage on it.

And someday, God forbid, we could both end up having to pay huge amounts for our care. When the money gets spent down, stocks, bonds, IRA’s, my 457b, cds, etc. are all up for grabs by medicaid. Not only may we have to withdraw that money to pay for care, but we would have to pay huge state and federal taxes on much of the withdrawals from IRA’s and the 457b. But one of the things that would be safe in Montana is up to $585,000 equity in our home, some income, and some savings.

On the other hand, I have seen so many friends our age with all their money trapped in the home. I’m helping my 86 year old mother with that right now. And she won’t qualify income wise to get another loan (unless she goes to Tom “The Mustache” Sellick) and pays HUGE loan fees for a relatively short stay in reverse mortgage land when her HELOC changes to fully amortized in 5 years.

 

[rodi]

We were in the 'make extra principal payments' camp for about 5 years leading up to retirement. By the time I declared we were retirement ready, the mortgage balance was under $40k... so we paid it off and were done. It is *very* nice not having a mortgage payment.

Cashflow works in multiple directions - we need *less* cash to live on because we don't have mortgage payments. This allows us to stay under the MAGI for ACA without having to be super stressed. But, yeah, our emergency fund took a hit. (Recovered nicely soon after.) And we got a HELOC so if we ran into an emergency we had a quick source of funds... Touched it for the first time this year (5 years later) when DH bought a new car... That will be zero'd out next month.

Your math is fine. But I get your wife's perspective, that it is really nice to have zero debt...

 

[Gill]

How much are you making on this, keeping in mind the bond interest is taxable and the mortgage interest may not be deductible? Also, there is some risk involved as the bonds don’t all sound blue chip.
Gill

 

[EdL3]

The feeling you get from being mortgage free is priceless. Add in a happy wife and you’ve got the golden ticket.

 

[RunningBum]

How much are you making on this, keeping in mind the bond interest is taxable and the mortgage interest may not be deductible? Also, there is some risk involved as the bonds don’t all sound blue chip.
Gill

That's an astute question. I'm all about getting an edge everywhere I can, and this is one of those places, but is it really a worthwhile edge if your partner isn't on board?

 

[68bucks]

If I searched I'm sure there is a thread of mine on here about my intent to take money from an IRA and pay the early withdrawal penalty to pay off my mortgage. There is an intangible value in no debt. I place a lot of value in it. So, several years later now I am retired and still have a mortgage. Swore I never would allow that. Basically my FA talked me off the ledge and I'm way better financially for it. Still makes me a bit uneasy a but I know I have the money at any time, to pay it off. So I'm saying how high is the value of no mortgage to you and your wife? That's the answer. If you have the money and can make better return from it do it, if the market turns just pay it of. My mortgage is 2.75 adjustable, reset 's next August. Decisions will need to be made then. I'll stress over it.

 

[Alexi]

i'd pay it off. with no debt all things become possible.

Exactly!

Happy Wife = Happy Life

 

[harley]

I only have one question. Has anyone put forth a different opinion on this thread than they have on the other 45 or so "Mortgage or not" threads that have been posted in the past? If not, can't we skip all of this and just read on of the other ones?

Hmm, that's two questions. OK, I only have two questions...

 

[Crabbyjerry]

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.

I’m with you on this. I remember when mortgage rates were 18 percent. At this sub 3 percent it’s like not having a loan especially since he has funds covering the note.

 

[RunningBum]

I only have one question. Has anyone put forth a different opinion on this thread than they have on the other 45 or so "Mortgage or not" threads that have been posted in the past? If not, can't we skip all of this and just read on of the other ones?

Hmm, that's two questions. OK, I only have two questions...

Why should this thread be any different from the other many common topics?

 

[jldavid47]

What about happy husband-happy life? Shouldn't that result in nothing else to discuss?

Are you not married?

 

[jldavid47]

How much are you making on this, keeping in mind the bond interest is taxable and the mortgage interest may not be deductible? Also, there is some risk involved as the bonds don’t all sound blue chip.
Gill

Exactly. If just one of those bonds go bad your entire strategy is screwed. His wife is correct. Pay off the mortgage. The math needs to include taxes and the risk of default of even one bond in the portfolio. It's not a simple bond yield to interest rate calculation.

 

[Maidensong]

Debt free was one of our prerequisites for the DH to retire early--including our rental property. It's a great feeling to truly own what you claim to own.

And as an "emotional" woman, may I say there's no shame in being risk averse once the paychecks no longer roll in every other Friday. Any investment can lose value. A paid off home generally appreciates and covers your head while it does it.

Look for another battle to win.

 

[gnawbone]

I've learned from experience that it is impossible for my spouse to understand my brilliance. I get the "deer in the headlights" look several times a week when I explain something to her. So my advice to OP is to stick with the "emotional" plan. It will work better for you in the long run.

Ditto