mortgage, what mortgage?
- Thread starter lucija
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I don't necessarily think that that alone indicates a problem. My wife and I also have a 30-year mortgage (only 28.5 years to go!).
I think what matters is the "save rate." If someone has a 30 year mortgage and isn't saving anything for retirement, then I'd agree that's a problem. But if a 30 year mortgage allows them to sock away tons of cash every month in their retirement fund, then what's the problem?
This is true.
I wasn't attempting to suggest that a 30 year mortgage is a bad thing. In their case, I believe it is (since they'll be 70 or more before it's paid off). But then again, that's JMHO and my be incorrect.
I was merely pointing out that my siblings thought it was rather normal to have a 30 year mortgage, and chose to go that route while saving anywhere from 5%-6% of their income (which is better than most of the US).
Meanwhile lucija just paid their mortgage off!
FWIW, I know there's not a single "right" way to approach retirement.
I honesty wish I would have learned what I have in recent years about 10 years ago. Then we'd probably be completely debt-free and stashing most of our single income away for retirement ... if not retired already.
Granted, having 4 kids wasn't the best financial move. But it sure is great when I get home from work!
I honesty wish I would have learned what I have in recent years about 10 years ago. Then we'd probably be completely debt-free and stashing most of our single income away for retirement ... if not retired already.
Granted, having 4 kids wasn't the best financial move. But it sure is great when I get home from work
!
youbet
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It might not actually be gloating, depending on how you do it. But, announcing you've paid off your mortgage does open yourself up for further questions. Was your mortgage tiny compared to your total net worth? Therefore, your decsion to pay it off was simply one of convenience or your decision that opportunties in the market to earn more than the mortgage interest were nil? Or, did the original mortgage debt far overshadow your net worth at the time and paying off the mortgage signals some significant financial success?
Who knows? So, when someone shares the fact they paid off their mortgage with me, I just smile and congratulate them and I'm happy because they're happy. But, I don't ask further and therefore I don't really know the financial implication of the event for them.
In that spirit, congratulations! Good job!
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My thoughts of talking to family/friends about it (without gloating), were more along the lines of "I'd ask the person what allowed them to pay it off early".It might not actually be gloating, depending on how you do it. But, announcing you've paid off your mortgage does open yourself up for further questions. Was your mortgage tiny compared to your total net worth? Therefore, your decsion to pay it off was simply one of convenience or your decision that opportunties in the market to earn more than the mortgage interest were nil? Or, did the original mortgage debt far overshawdow your net worth at the time and paying off the mortgage signals some significant financial success?
Who knows? So, when someone shares the fact they paid off their mortgage with me, I just smile and congratulate them and I'm happy because they're happy. But, I don't ask further and therefore I don't really know the financial implication of the event for them.
In that spirit, congratulations! Good job!
Was it because they had saved so much early, or because the tax break they were getting helped (i.e. putting any tax refunds onto the mortgage instead of a new plasma TV), etc.
I do know someone personally that paid his mortgage off in 5 years. He was (and still is) single. Was never able to take advantage of any tax benefits due to having the mortgage. The house isn't very big, but it definitely fits his lifestyle and goals. He was whining one day about not being sure if he should keep working until he's got $1.5M or $2M in retirement savings. And he could literally retire today (barring any unforseen health issue) without changing his lifestyle at all.
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yeah, I hear ya and I get curious about other people's financial situations too. I just try to bear in mind that asking that question might be prying into areas they chose not to share before. Maybe they paid off the mortgage with a big inheritance and had decided, for whatever reason, not to share that inheritance info. Or, maybe they got some big bonuses at work they had decided not to talk about. Or......whatever reason.
In today's world, the classic scenario of folks paying off the mortgage being their primary financial strategy and a marker of financial success isn't as common as it once was. So when you announce you've paid off the mortgage or you ask questions to someone else about paying off the mortgage, you might be opening the door to further inquiries or disclosures beyond what you/they are actually comfortable with.
Like I said, paying off the mortgage has different implications for different people depending on their circumstances. Especially on this board where there are some serious, talented investors (not me!), debt is often just another tool in accumulating wealth.
It's fabulous that lucija accomplished a personal goal of paying off the mortgage. Congrats and it makes me feel good just hearing lucija sound so happy!
bssc
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Congratulations
We didn't tell anyone in the family either, except for my parents, who could be the executors for our estate. Only told a few friends too so you made the right decision.
We didn't tell anyone in the family either, except for my parents, who could be the executors for our estate. Only told a few friends too so you made the right decision.
citrine
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Congratulations! It is a great feeling to not owe anyone!
When I own a home again....I will be paying it off as soon as I can!
When I own a home again....I will be paying it off as soon as I can!
I paid off my mortgage ten years ago and ten years early. I told some of my friends who were still paying huge monthly mortgage payments.
They gave me a lecture about how stupid it is to pay it off early. The so called tax benifits and all that. It took me only a few years to save back the money I used tp pay off the loan, while my friends have remortgaged and have many years left to pay.
I now have 100% equity in a home worth 500k that I paid 140k for.
I really don't tell people anymore that my house is paid off unless they ask.
Yes, leveraging someone else's money is great, but we decided against it... this revelation hit us towards the end of 2002 when the market was still tanking and we got hit with the following news (all within a couple of months): we found out I was pregnant, DH's job got outsourced and mine somehow became "obsolete". It all worked out in the end, but suddenly not having a bunch of bills sounded great.
Paying of the house was never a #1 financial priority for us, but when presented with the opportunity, we took it...
Yes, I hear you. We paid our house off last summer (35 years old for me, 33 for wife) and the major motivation had come in 2000 when the mega-corp I worked for at the time laid off 10% of the development staff and then, 6-7 months later, laid off 50% of the remaining staff...fortunately I survived the cuts. However, one of the development managers still works as a sales associate at the local Sears and has been trying to get back into the business since. So each time I was through there to go to the food court he was a reminder to take advantage of the good times while they last...
megacorp-firee
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Congrats ... it's like finding money in your pants pocket that you didn't know you had ... but even better ... it happens every month.
To heck with any arguments against paying it off early. They are based in sound mathematical principles, but you can't put a price on pride, security, or satisfaction in obtaining a material goal. I've been mortgage free for a little over a month, and I often find myself marvelling and thinking "yup, it's all mine and they can't take it away". It's a grand feeling isn't it.
As for who to tell, it's funny that you can pay off a car and you'd get a high 5 from your friends, but mention that the house is free and clear and be prepared for some low key hostility.
I find that the toughest part is waiting for the sloths at land titles to get off their lazy duffs and send me my mortgage diploma or whatever they call the sheet of paper that says that I own it.
As for who to tell, it's funny that you can pay off a car and you'd get a high 5 from your friends, but mention that the house is free and clear and be prepared for some low key hostility.
I find that the toughest part is waiting for the sloths at land titles to get off their lazy duffs and send me my mortgage diploma or whatever they call the sheet of paper that says that I own it.
Congratulations!
A co-worker of mine who also attends the same church as I paid off his mortgage 3 years ago. He and his wife have been married for thirty years yet act like newlyweds, he practically skips through the halls, and is never phased or ruffled by anything that happens at work. He says he'll retire when fixing computers "stops being fun".
He has my unending admiration and respect. I have 17 years left on my 20 year mortgage, I look forward to the day.
A co-worker of mine who also attends the same church as I paid off his mortgage 3 years ago. He and his wife have been married for thirty years yet act like newlyweds, he practically skips through the halls, and is never phased or ruffled by anything that happens at work. He says he'll retire when fixing computers "stops being fun".
He has my unending admiration and respect. I have 17 years left on my 20 year mortgage, I look forward to the day.
lets-retire
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CONGRATS!!
I thought it was interesting. A couple months ago my BIL and SIL were looking at buying the trailer they rent from my FIL. My BIL was saying he wanted to get it paid off as soon as possible, just because he didn't want to have the hassle of making monthly payments. The MIL stepped in and told him it was very stupid to pay it off, because the interest will lower his tax bill. I pointed out that yes it would work to lower the tax bill, but he would have to spend $100 to save $15, so it wasn't very economical and boiled down to who he'd rather pay. The MIL has very strong opinions and a rather heated discussion ensue. No tempers flared just a really good debate. I left the debate thinking it was over. We have lunch at the in laws every Sunday. While eating lunch recently the FIL pointed out he did his taxes with and without the mortgage and found the mortgage was saving him $400 per year in taxes. So of course my next question was, "How much are you spending to save that?" The answer was, "Over $700 per month." (but I believe the amount was his whole mortgage payment). Since he only bought his house a couple years ago, most of the payment is probably interest, since he is a recent convert to having the thing paid off.
I thought it was interesting. A couple months ago my BIL and SIL were looking at buying the trailer they rent from my FIL. My BIL was saying he wanted to get it paid off as soon as possible, just because he didn't want to have the hassle of making monthly payments. The MIL stepped in and told him it was very stupid to pay it off, because the interest will lower his tax bill. I pointed out that yes it would work to lower the tax bill, but he would have to spend $100 to save $15, so it wasn't very economical and boiled down to who he'd rather pay. The MIL has very strong opinions and a rather heated discussion ensue. No tempers flared just a really good debate. I left the debate thinking it was over. We have lunch at the in laws every Sunday. While eating lunch recently the FIL pointed out he did his taxes with and without the mortgage and found the mortgage was saving him $400 per year in taxes. So of course my next question was, "How much are you spending to save that?" The answer was, "Over $700 per month." (but I believe the amount was his whole mortgage payment). Since he only bought his house a couple years ago, most of the payment is probably interest, since he is a recent convert to having the thing paid off.
ikubak
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No use arguing with a MIL that knows it all. Hopefully you got through to the FIL.
Rich
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It really does make good financial sense to get rid of the house payment. But, as I am sure most folks here realize, there is a strong culture out there the “get a tax write–off.” My wife and I have no debt. We’ve always been a bit conservative, in a Dave Ramsey sort of way. So, while I continue to work (because I want to), I don’t have to. It is really remarkable how comfortably one can live in this country on a good salary if one has no debt.
Rich
Rich
FinanceDude
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bbbamI
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Gotta agree on that......working on it.........
That's why you're a finance dude.
...So true... having no debt is very liberating!
I am, too, amazed how prevalent is the "get a tax write-off" or "I am using someone else's money" mentality.
Case and point: my neighbor told me yesterday he does not understand why one would chose to pay cash for a car (with funds from the savings account) when a bank is willing to lend you money with a 5 year re-payment plan. Hmmmm... call me crazy, but isn't there this little thing called "loan interest"
(he was not talking about no interest loans).Congrats!!!
After reading this or similar threads I feel my motivation to pay off our mortgage reinforced over again vs. investing all extra $$ in the market (BTW, we invest quite a bit in taxable accounts already). Especially makes me happy hearing that even young people do that. We're 33 and 39 and are debt averse as well.
Our plan is to pay our 15-year mortgage off in 10 or preferably 7.5-8 years. This year considering current CD rates we're leaning to chop our savings (that are sitting in CD's and saving account) and apply a good chunk of it towards the principal. If we do this, we'll have our house paid for at the end of 2010. First we'll wait for the baby that's due in August. If he/she is good and healthy (I pray for that in my mind
), we'll make the step.
After reading this or similar threads I feel my motivation to pay off our mortgage reinforced over again vs. investing all extra $$ in the market (BTW, we invest quite a bit in taxable accounts already). Especially makes me happy hearing that even young people do that. We're 33 and 39 and are debt averse as well.
Our plan is to pay our 15-year mortgage off in 10 or preferably 7.5-8 years. This year considering current CD rates we're leaning to chop our savings (that are sitting in CD's and saving account) and apply a good chunk of it towards the principal. If we do this, we'll have our house paid for at the end of 2010. First we'll wait for the baby that's due in August. If he/she is good and healthy (I pray for that in my mind
), we'll make the step.DAYDREAMER
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Congratulations on your major accomplishment. Being debt free is an awesome feeling. If I were you, I would announce it to the world. It is an accomplishment many poeple don't even think about till somebody actually does it. My brother-in-law saw the light when he found out we payed off our house. He never thought of such a thing. He decided it was a noble goal, and did the same. By announcing your accomplishment, it may inspire others around you!
