I had to try out this poll thing...Mortgages

[cute fuzzy bunny]

Aside from the mutual nuclear destruction diatribes, I'm interested in peoples actual status and plans.

[HFWR]

Not retired yet*

Mortgage of $95k on home valued somewhere in the low $130k...

Only 29yrs to go...

[Sheryl]

Still deciding whether to get rid of it before retiring. It's down to $48k at 4.5% so I might just leave it. The cash can do better elsewhere. But then there's the psychological factor of "owing." Sigh. let's not go there again.

[justin]

~$114k left on the mortgage. Adjustable rate with 28.5 yrs to go. Currently at 3.75%. Could be paid off in 5 years, could be 10. The odds of me retiring in less than 10 years are low (but increasing daily).

It will be tricky with the ARM. When the rate adjusts every 2 years, the payment due is recalculated as the principal balance is reamortized over the remaining term of the loan. Since I'm paying it off early, the payment will keep dropping every 2 years. I have to manually pay off extra each month to keep with my regular amortization schedule (what it would have been if I hadn't prepaid principal). Then I have to pay extra principal on top of this (to maintain my early payoff goals). I think I might have to set up a spreadsheet to keep things straight...

As it is now, we "only" have 23 years left, according to the original amortization schedule.

Whenever I get some extra unexpected/unallocated cash, I usually put it into paying down the mortgage. Selling crap on ebay or craigslist. Zero percent CC interest ($176 last month!). Citibank dividend 5%/1% cash back ($92 so far this year).

Paying it off before retirement isn't really a goal since it is/will be very small as a portion of our needed income upon retirement. It will also be temporary - only the first 5-10 years at most. The principal balance is low enough for us to pay it off in a year or two pretty easily if we really wanted to.

I'm having crazy thoughts of using 0% CC money to pay off the mortgage completely/mostly, and then pay off the 0% CC balance at an accelerated schedule or roll it into new 0% CC's. I'm pretty sure it's too risky for my tastes, but I'm still trying to engineer a plan that is foolproof. (I may have some interesting (positive) news on the 0% CC deal in another few weeks. I just applied for 25 0% cards this weekend, got 3 on the spot, other 22 had to go to the approval dept. to make sure I wasn't trying to cheat the company out of any money ).

[JohnP]

Three years into retirement - still have mortgage - DW to work half-time one more year - enough cash in accounts to pay it off, but agree with Sheryl above

... "still deciding whether to get rid of it" ...

JohnP

[maddythebeagle]

75k mortgage left on a 15-year. Will be paid off in 10 years. I might cut a few years off at the end. I like the idea of having a paid off mortgage as insurance if you retire early.

[Honkie]

CFB - in true "Newbie Pollster" fashion, you are a category or three missing.

I polled as "Not retired yet, mortgage" - more accurately I am "Not retired yet, mortgageS", * three to be exact.

In US$ equiv's

Residence: 290k o/s *value 1mill
Rental #1: *256K o/s *value 510k
Rental#2: * 438K o/s *value 615k

Cheers, Honkie

[Andre1969]

I picked the not retired yet, have a mortgage, but will pay it off by the time I retire option. Actually, I don't have a traditional mortgage, but an HELOC. I could pay it off at any time, but keep it partly because of the tax writeoff. While spending $1.00 to get 33 cents back on your taxes doesn't make sense by itself, it does open the door to make other things tax deductible, such as property taxes, state and local taxes, charitable deductions, etc. Plus, that money is invested. About 60% of it is in an Emigrant account earning interest, which partially offsets the mortgage payment (but then gets convoluted with taxes) but the rest is in stocks and mutual funds, which so far have been earning a better return than the mortgage rate.

The way interest rates keep shooting up though, I'm going to start paying it down faster. I figure if I get it to the point where the yearly interest payment is about what the standard deduction would be, I'll be happy.

[SC]

I got lucky and snagged a 4.25% 15 year a few years back. Can't justify sending them any more than the minimum payment at that rate.

SC

[Andre1969]

Wow, that sounds like an awesome rate! I had a 15 year mortgage at 5.5% on my condo. HELOC on the house started off at 5.5%, but is tied to the Prime rate. I think it's going to be 7.75% as of the next statement. So in a little over a year, my interest payment has shot from around $458 per month to $645 (borrowed $100K, only have to pay back the interest for the first 10 years, but with rates rising I'm paying more)

I probably should have gone with a conventional mortgage, which would have saved money in the long run, but there were just too many loopholes to jump through, and closing costs would have been a lot more.

[justin]

Andre,

Thank you for your charitable contributions to our government. It's the men and women like you that help me not pay taxes.

[nuisance]

Last I heard the median house price in Santa Barbara is $1m. I'm renting! (Longer term I'm planning to move somewhere cheaper).

Tim

[Andre1969]

Justin, you're quite welcome. But am I really giving charity to the government this case, or the mortgage company? Every time the interest rate goes up, the mortgage company gets more $ from me, but then I get more back as a tax writeoff.

[cute fuzzy bunny]

Quote:

Originally Posted by Honkie CFB - in true "Newbie Pollster" fashion, you are a category or three missing. I polled as "Not retired yet, mortgage" - more accurately I am "Not retired yet, mortgageS", three to be exact. In US$ equiv's Residence: 290k o/s value 1mill Rental #1: 256K o/s value 510k Rental#2: 438K o/s value 615k Cheers, Honkie

Sicko.

[justin]

Quote:

Originally Posted by Andre1969 Justin, you're quite welcome. But am I really giving charity to the government this case, or the mortgage company? Every time the interest rate goes up, the mortgage company gets more $ from me, but then I get more back as a tax writeoff.

Well, you have to earn the money to pay the interest - so you're contributing taxes on that. I guess you're right though overall. I should be thanking you on behalf of shareholders (I hope I own some shares in it as part of one of my index funds!).

[yakers]

Not retired yet, but soon enough. Own home, no mortgage, no debt--none, nope, nein, nix, neyt...

I understand the theory that there are reasonable places for debt in the financial world, they are just not for me, call it a character flaw (not being able to distinguish an investment from a debt) but not owing any form of money just works for me.

[MJ]

Although I selected retired with no mortgage (for over 7 years) I am in the process of selling my house and will be a vagabond for awhile.

MJ

[kz]

We also snagged a 4.75% a few years ago but we are paying extra each month. My goal was to have home paid for by the time we retired which would have happened had we decided to stay til 58 or 60. Due to unforeseen circumstances (for me) and intoxicating early retirement for hubby it didn't happen though. No complaints. The mtg. is only 10% of our net pensions.

But a little voice inside wishes I could say it's paid off.

[cute fuzzy bunny]

Added a couple of new ones for people who currently have a house but are planning on dumping it and renting after retiring.

[Nords]

Quote:

Originally Posted by (Cute Fuzzy Bunny) Added a couple of new ones for people who currently have a house but are planning on dumping it and renting after retiring.

You know my vote. I promise to vote only once.