Debt Free

[Helen]

Well, I just moved some money around and have scheduled an automatic mortgage payment for the payoff amount.

On July 1st I will be debt free for life !!!!!!!

This is a big milestone on my way to FIRE.

On August 1st, the money that would have gone to the mortgage will go to retirement savings.

-helen

 

[KB]

Congratulations Helen. It will feel wonderful. Gives you such a comfort to owe nothing....

 

[Spanky]

It's nice to see more money going into saving.


I still have a year to go before paying off the mortgage.

 

[haha]

On July 1st I will be debt free for life !!!!!!!

Congrats Helen!

 

[MJ]

Yeh Helen, congratulations.

Being debt free is a wonderful state of being.
Now your nest egg will swell. Hurrah!

I have been debt free for over 6 years and have never owed any CC debt beyond the required due date.

When I bought my current home in 91, I was thinking of taking out a 10 year loan but to limit my financial obligation, took out a 15 year one with the intention of paying it off in 10. I was able to pay it off in 8 years.

MJ

 

[moghopper]

I have heard that once you pay off the mortgage (excluding a refinance) that any future mortgages on that property by that owner are no longer tax deductible. Is that actually true?

 

[Mr._johngalt]

I have heard that once you pay off the mortgage (excluding a refinance) that any future mortgages on that property by that owner are no longer tax deductible.  Is that actually true?

No

 

[riskadverse]

I paid off my mortgage in 2001.  Everyone told me it was a dumb thing to do - I should refi and invest in the Nasdaq.  Ha Ha!

 

[Helen]

I paid off my mortgage in 2001.  Everyone told me it was a dumb thing to do - I should refi and invest in the Nasdaq.  Ha Ha!

Thank God you didn't !!! I have kicked myself for putting/leaving money in high tech in 2000 instead of paying off the mortgage. I actually sold a small amount from Vanguard's Total Stockmarket Index Fund yesterday to pay this off.

-helen

 

[cute fuzzy bunny]

Congratulations Helen!

The relative benefits, both psychological and financial, of a no debt situation are well argued, but I doubt you'll ever regret the decision.

Even before ER'ing, you've somewhat disaster-proofed your life. Loss of a job or any other minor to major disaster isnt that big a deal when your monthly out of pocket costs are negligible.

Its especially delicious considering most of your contemporaries not only have a fat mortgage they've refinanced 3 times to take out the extra equity, they're probably also up to their eyeballs in credit card debt.

 

[laurence]

Congrats, Helen!

 

[VoyT]

An official "atta-girl" for you, Helen! It's certainly worth the peace of mind!

 

[Ginger]

Helen, congrats on being mortgage free. We paid our mortgage off last August. My husband retiring in October. I have a question for Martha if she sees this. Our home is worth more than $500,000 -- so if either of us dies does the exclusion we have to pay taxes on if we decide to sell the house revert b to $250,000??

 

[Jarhead*]

Helen, congrats on being mortgage free.  We paid our mortgage off last August.   My husband retiring in October.   I have a question for Martha if she sees this.  Our home is worth more than $500,000 -- so if either of us dies does the exclusion we have to pay taxes on  if we decide to sell the house revert b to $250,000??

Ginger: This isn't Martha, but happened to notice your question. (And it's a good one).
If the home is sold the same year that one of you dies, your $500,000 exclusion carries on.
However, only during that year, so it would revert thereafter to $250,000.00.

 

[Dreamer]

Congratulations Helen. It is definitely a great feeling to own your house

I remember when I first talked about paying the house off early, my dh thought I was crazy. He thought that everyone always had a house payment. I made him a deal. I told him that if we paid the house off first, then we would save for his sports car. Our house was paid off in a little under 10 years. Even though we paid cash for his sports car, it is still costing us money. Every winter, he tears something down and redoes it. This is his hobby though.

Dreamer

 

[Calgary_Girl]

Congratulations!

DH and I have been debt free since 2001 and the peace of mind is well worth it!

 

[Ginger]

Ex-Jarhead: thanks for the answer. I work in a law firm and that was going to be one question to ask one of the estate attorneys. It would seem pretty unfair to be stuck with that huge appreciation tax if a widow/widower sells their home the year their spouse dies. :

 

[haha]

Every winter, he tears something down and redoes it.  This is his hobby though.

I'm curious- what is his car?

Ha

 

[Michael Moore]

I paid off my mortgage in 2001.  Everyone told me it was a dumb thing to do - I should refi and invest in the Nasdaq.  Ha Ha!

I had people tell me that too. After watching our mutual funds tank it really didn't seem like a good idea to throw the house in after them.

Helen, we found that paying off the house made us feel safer, and the peace of mind was nice. Plus, getting rid of the house payment ($1200 for us) sure frees up a lot of cash. No house payment also made ER a viable proposition.

cheers,
Michael

 

[HFWR]

I'm debt free currently except for the mort. Am paying some extra, but for now, with a 5.5% loan, and a 25% TB, seems to me it's better to build the nest egg. Still, as the itemized deduction moves toward the standard deduction, I'll probably throw lots more money that direction. No house payment will make the retirement budget look much better.

 

[Paully]

Congratulations Helen !!

My wife and I paid off our mortgage last November. We treat it as an extra $ 1000 every month in our pocket rather than the banks. Enjoy your new found freedom owing no one.

Paully

384 working days until retirement-- but who's counting.

 

[bow-tie]

Congratulations, Helen. That is great. Thumbs up.

I hope to join you by the end of 2006.

 

[Patrick]

Helen, congrats on being mortgage free.  We paid our mortgage off last August.   My husband retiring in October.   I have a question for Martha if she sees this.  Our home is worth more than $500,000 -- so if either of us dies does the exclusion we have to pay taxes on  if we decide to sell the house revert b to $250,000??

Ginger,

The exclusion applies to the PROFIT that you make from the sale of your home.  You take the sales price and subtract the BASIS (purchase price plus improvements) from it.  So even though your house is worth more than $500K, as long as your profit is $250K or less, all of it would be excludable even if one of you dies.

Patrick