Poll:Do you Own your home outright?

[TXBev]

There is something about not paying your mortgage if you can get a better rate of return elsewhere for your $. Think that is the only interest you can deduct these days.

I have now and have had rentals for decades. (no mortgages) that fill up fast. People stay for years. If you are able to do the repairs and/or maintenance yourself, it is good. Otherwise, the repairs, especially major, really can hurt. There are tax advantages having rentals and someone else could be paying off a house for you. The housing market is becoming out of reach for so many and rents are going up everywhere. It is tough for young people.

 

[Phroig]

Not retired. Own home.

 

[MC Rider]

No mortgage. No debts. We like it that way. Keeps things simple and monthly expenses down.

 

[Montecfo]

We own this house outright, and had the previous house paid off about a year and a half before retirement. Quite a change from when I bought it, fresh out of a divorce and I was very definitely "house poor". And dating DW-to-be, although I didn't know it then, and she was okay with a Saturday night date being renting a movie for the VHS player, sending out for pizza and a bottle of, well, let's just say it wasn't a sought-after wine.

Somewhere we have a photo of her after we were married sitting on the floor in the living room reading a book. She's sitting on the floor because there wasn't a stick of furniture in the living room. Today is our 35th anniversary so I think it's gonna work!

Nice story Walt!

 

[NW-Bound]

I would be more ahead if I had my 2 homes on mortgage, and invested the payments.

But when the rate got so low that it looked like a no-brainer, where would I apply to remortgage, an ER with no earned income, no pension, and not even SS?

Could I pledge my 7-figure investment accounts in addition to the homes as collateral? The mortgage industry does not know how to deal with that.

PS. And then, I am already conservative enough to keep 20-30% in cash. I did not need to raise more cash to invest. Just increase my AA (which I did not do).

 

[CardsFan]

We have a paid off home.

But I think there is a difference between simply making all the payments, (then having it free and clear), and deciding to raid the kitty to pay it off when retired. We did the former. I probably would not do the latter unless the rate was very high.

When we sold and downsized, we paid for the condo and invested the rest. Once the first one was paid for, why get another mortgage?

FWIW, we live in a low to medium COL area, so the home value is less than 6% of our net worth. Leveraging that amount with a loan so we could invest and get a marginal 2-4% gain, just did not seem prudent.

Also, FWIW, except for the short time we had a building loan for the previous house, we have never had a mortgage over $70k.

 

[rwdflynavy]

Retired with a 2.25% 30 year mortgage. Ain't paying that off early!

 

[Montecfo]

We have a paid off home.



But I think there is a difference between simply making all the payments, (then having it free and clear), and deciding to raid the kitty to pay it off when retired. We did the former. I probably would not do the latter unless the rate was very high.



When we sold and downsized, we paid for the condo and invested the rest. Once the first one was paid for, why get another mortgage?



FWIW, we live in a low to medium COL area, so the home value is less than 6% of our net worth. Leveraging that amount with a loan so we could invest and get a marginal 2-4% gain, just did not seem prudent.



Also, FWIW, except for the short time we had a building loan for the previous house, we have never had a mortgage over $70k.

You are always "raiding the kitty" to pay it off even though it may not seem that way.

You use either saved funds or funds you could otherwise have saved.

 

[Aerides]

We paid of the balance on the mortage ($120kish?) in the winter of 2008/9, when the economy was collapsing. I have no idea what the interest rate was, but savings weren't making anything, and no one was going to throw cash into the market at that point. We liked the idea of knowing that if one of us got laid off, we'd jettisoned our largest monthly expense.

If/when we move, likely the new home would be ~200k more than where we are now. We'd probably mortgage that difference at least to have flexibility on capital gains, if rates made it a no brainer.

 

[sparky08]

Even though I had a low rate mortgage, I wanted to pay it off the before retirement. Mostly just a peace of mind thing.

 

[CardsFan]

You are always "raiding the kitty" to pay it off even though it may not seem that way.

You use either saved funds or funds you could otherwise have saved.

While I kinda see your point, there IS a difference between pulling a lump sum to pay off the mortgage (maybe taxable money?), and paying out of cash flow.

In any event, I guess my logic is, I would (did) pay off the loan over time, and I would not take another one for a lower cost home.

Is it the RIGHT thing to do, investment-wise? Can't answer that, since we will be dead before the answer can be determined.

 

[MarieIG]

Well, you may be curious, but the only thing you'll learn is how many decided to respond to each category. That may or may not be representative of the forum's members - no way to know that.

. . .

-ERD50

Yes, that is probably true with most (all) polls on the forum . . .

 

[ls99]

Was paid for 15 years ago.

 

[karen1972]

I retired with no loan, but have since gotten 3 loans, moved multiple times and the last I don't plan to pay off as its sub 3% financing and we took it out in 2021 so 28 years to go.

 

[Toast]

Not yet retired, and own my home. Paying off the mortgage was a great feeling.

 

[Jerry1]

Hybrid. I paid cash for the house and all the improvements while I was working. When I retired, I put in a pool. We financed that so that I could manage my income for tax bracket purposes. If I took all the money out, it would have put me well over the 15% bracket so financing made sense. Plus, it’s low interest - 2.75% so there’s no way I’m paying it off early. But, if for some reason I had to, I could pay it off tomorrow. I could even avoid the taxes now if I draw it from my ROTH. I’ve built my ROTH up rather nicely and stayed just under the 15% bracket so that has worked out very well.

 

[mopar lover]

The wife and I paid off our home at the age of 36, it was a goal for us. After going over the pros and cons of doing so, we decided it would be in our best interest. I work construction and never knew if you were going to be working, so not having that payment made life less stressful. Going on 49 this December and plan on firing in 2 years. It worked out for us.

 

[scrabbler1]

i paid off the mortgage on my co-op apartment back in 1998, faxing the ACH withdrawal authorization (in lieu of a bank check) to the mortgage company on my 35th birthday. The money got pulled from my bank account at the end of the month.

I bought my apartment in 1989 when real estate prices were relatively high, as were interest rates, especially on the less desirable (from the bank's perspective) co-op loans. I got a 5-year adjustable ARM which I was stuck with when interest rates fell in 1990 and 1991. I did a refi into a 1-year ARM in 1992 and reduced my monthly payment by about 50%. Interest rates crept up in the next 5 years but nowhere near what I was paying from 1989-1991.

With my wages rising quickly in the 1990s (I was still working full-time), and the 1990s market boom in full stride, I began using some of those gains to pay down the mortgage before finally paying it off in 1998. I had figured out that the tax increase from losing the home mortgage interest deduction was limited because I could start taking the standard deduction on my state tax return. The 1997 federal budget agreement reduced the cap gains rate on some of what I sold for a profit. It turned out I was now playing with the house's money in some of my portfolio.

Paying it off allowed me to live on one biweekly paycheck of the 2 I got each month, allowing me to quickly replace the money I withdrew. This showed me I could reduce my salary by 50% and still pay my bills with ease, leading me to reduce my weekly hours worked 3 years later in a key move to semi-retirement, eventually leading me to fully retire 7 years after that (in 2008).

So, paying off the mortgage in 1998 and owning my apartment outright was a big step toward my ER 10 years later.

 

[Markola]

I’m happy with our 3.6% mortgage, since our investments grow faster than that.

 

[street]

Retired and paid off. My wife and I built it in 1984 and two years later paid if off. Been in the same 1900 square foot home since then. We were 27 years old, so we stuck a lot of dough into investment through all those years.


I wish I would have built 3 or 4 more homes back then.

 

[HI Bill]

Odds are I’ll never have a paid off home. At 2.75%, there’s no incentive for me to pay off the mortgage. It’s big enough where I can itemize, which saves me in taxes.

So I guess I don’t “own” my home, but that’s ok with me.

+1! 2.62% here. I'm completely comfortable with my mortgage at that rate, and have appreciated a 50% appreciation in home value since I bought in 2020. Taxes that would have been owed to sell investments to pay in full, a delay in selling our other home, and the low interest rate means that it made sense to buy with a loan. I'm super happy that we did, as we would not be able to afford to purchase our home today, and the payments are so low (~$1K to principal and $1K to interest), that with the mortgage interest deduction in state taxes, it's almost painless to have the loan. YMMV.

 

[Born2Fish]

Retired with 2.25% fixed rate mortgage.

Life is good.

 

[Katsmeow]

Title says it all. Curious the thoughts here. We all know the PROs and CONs.

Do you own your home?

1) Yes, Retired and Own my own home
2) No, Retired and Do Not own my own home
3) Yes, Not yet retired and own my own home
4) No, No yet retired and own my own home

We have the opportunity to do either or in retirement. Curious how many fit into each category in this forum

Hmmm... don't know how I could answer this. Well, I could right now. As we don't own a home at all as we sold our house recently and are under contract to buy a new one.

Anyway the subject of this thread is do you own your home outright which I assume means, do you own it without a mortgage. But the poll questions don't ask whether you have a mortgage or not.

It seems for each category (retired or not) there could be 3 responses:

Own with no mortgage
Own with a mortgage
Do not Own

Anyway, when we close on the new house (which is only new to us) then we will own but have a mortgage.

 

[Route246]

Refinanced to a 15, paid off in 12. It was a huge sacrifice and a bit constraining but never looked back.

 

[skyking1]

I think the last mortgage was 6% so that is reason aplenty to pay it off quickly.