Pay off my mortgage

[Texas Proud]

It is always a wise decision to pay off your mortgage. There are a lot of ways you can do this but after you pay off your mortgage YOUR INCOME is YOURS. Then you can invest for 401k/IRA/small party to celebrate paying off your mortgage.

Make sure to have enough money leftover so you are not pushing yourself too tight. It might turn out to pay off more than half and have safety money. Paying off your mortgage is always great! You know your account better.

Dave Ramsey will tell you to pay off your mortgage. This is not to start a conversation about him but he has a plan that has proven to work.

Grant Cardone talks about ways to get you to 10x ($10,000,000). He believes real estate is one of the best ways. Paying off your mortgage sounds great. I will type it one more time because it feels good typing it. Paying off your mortgage feels great!

Take what works for your. Leave what doesn't. You will make the right choice for yourself.

I am glad (I guess) that you have taken Dave Ramsey to heart....



But, I guess you did not even read the replies to the thread... it is NOT ALWAYS a wise decision to pay off the mortgage and anybody who says it (including you) is just wrong...


Say you got a sweetheart deal of ZERO interest... would you pay it off? I do not think so... so we know it is not always...


If you have low interest then financially it does not make sense... there are other non-monetary reasons to do so which is why the argument rages on....


But ALWAYS





(just a little more than RunningBum)

 

[eleighj416]

i love being debt-free. It removes an emotional hurdle most people carry around. I vote for pay it off.

ditto.

 

[pb4uski]

.... Dave Ramsey will tell you to pay off your mortgage. ...

Perhaps, but Dave Ramsey is a moron, so where does that leave us?

 

[fvfire]

From the likes of this forum and members, better than I deserve.

 

[ERD50]

Perhaps, but Dave Ramsey is a moron, so where does that leave us?

What's worse, he may not be a moron, but is actually dangerous to people and their money. That guy is wrong, flat out wrong on so many things. Unfortunately, I don't think he's that dumb, it appears he's doing it for his own gain, using people who don't know better. Sad.

-ERD50

 

[eleighj416]

Being debt free is empowering however you want to do it! My wife and I did it because we do not like anything hanging over our heads and completed it long before Dave Ramsey showed up.

Dave Ramsey's target audience are the one's who have +$100,000 in debt and not a dime in the bank. His seven steps are okay, his investment advice is dangerous. You definitely do not have to buy his materials to get out of debt. It just takes work and will power!

 

[38Chevy454]

Perhaps, but Dave Ramsey is a moron, so where does that leave us?

I don't think he is a moron, but his financial advice is not for people on this forum. I believe he does help people that are in bad financial shape due to their ignorance. He provides a guideline for those people so they can turn their financial situation better. I don't agree with all that he says, and am not one of his target audience.

 

[Shredder]

I was in a somewhat similar situation as the OP. I owed 115,000 on my house, (3.5%) but when I sold my last paid off house I could have paid it off. The money would have been a wash. Instead I bought new appliances, for the new house, put up a 30x50 pole barn and parked the rest in my VG Wellesley acc.

Now 5 years later, I have more in Wellesley than I did before i spent some. I have added some, but not much. Just this summer I started taking my house payment out of that account. In my case, and for me, I feel comfortable having a house note. Even though I could pay it off anytime. I like having the option to use my money to work for me.

 

[jkern]

I sold investment real estate and paid off my mortgage in 04'. At the time I had 9 years remaining. Due to the sequence of return in the market (08 crash), I came out ahead by paying off the mortgage (4.75% rate).

I fully understand that it is possible to have investments out perform a mortgage interest rate. However, don't underestimate the risks associated with sequence of returns and human behavior. It doesn't take much to significantly change those performance numbers.

 

[JoeWras]

Excuse me.... they had not paid their mortgage for over a YEAR and the warning was a few days

REALLY? You believe it is the bank that did something quickly? It took them a year to do something...

I think your neighbor took advantage of the situation and got over a free year of living in a house... losing 'half' his stuff was a bargain....

Relax...

As I mentioned, they "played chicken" with the bank. They were getting notices to pay. But they were insistent that the bank would not act on it. And he was so bold as to tell us neighbors this.

When the bank came with the locks, i.e. We REALLY Mean It, it was a very, very short notice of eviction.

So, yeah, you are right.

BTW, you know what happens with all that stuff? Apparently, like "storage wars", somebody bids on it blindly and has to pick it all up. We watched the company do that for two days. Amazing all the stuff that was left behind.

 

[Texas Proud]

Relax...

As I mentioned, they "played chicken" with the bank. They were getting notices to pay. But they were insistent that the bank would not act on it. And he was so bold as to tell us neighbors this.

When the bank came with the locks, i.e. We REALLY Mean It, it was a very, very short notice of eviction.

So, yeah, you are right.

BTW, you know what happens with all that stuff? Apparently, like "storage wars", somebody bids on it blindly and has to pick it all up. We watched the company do that for two days. Amazing all the stuff that was left behind.

The way your first post sounded it was quick... I think otherwise and it now sounds like you also do...



Yea, the locks come really quick... after a long time of warnings... it is not like they tell you 'hey, last warning, we are coming next week'... the reason being is that a good number of people actually trash the place...


When I was looking at repoed houses years ago there were many places missing doors, fixtures etc... some had spray paint on all the walls... my one of my sisters neighbors even took the kitchen sink... and this is a good neighborhood... during the crisis I looked at the old house where I grew up and it was repoed... they took everything down to the walls.. all cabinets, all sinks, toilets and even the tubs!!!



Nope, you do not want to give them time to ruin the place..


When I worked in the real estate dept of mega we had property we rented to others... we let some get away with murder as they had been there for so long... but when we made a decision we just locked them out... with all their stuff still inside... usually they had to come up with 50% and start a payment plan along with current rent... some did, some just left...

 

[JoeWras]

Yeah, Texas, sorry for the confusion.

What got me was this very smart guy, who I previously admired (worked for my Megacorp and retired) just acted this way. He literally thought the bank wouldn't do it to him.

After it was all said and done, we peeked through the windows. There was something left in the middle of the room. It looked like dog waste.

The new buyer was a builder and renovated it. He didn't get into details but said a lot was messed up.

 

[dtbach]

I owe about $38K on my mortgage that has about 3 years to go and could easily pay it off. But at 3.25% interest, I'd rather keep my cash to potentially get some great deals the next time there is a deep correction and/or bear market.

 

[ocean]

The FDIC was created in 1933 to prevent bank runs like those seen during the Great Depression. Also, I do not agree that a bank can call your mortgage "at any time," assuming you're current on your payments.

iirc, the bank calling in his mortgage is what led to Dave Ramsey going broke. He says that he was current on his payments, but that after a bank merger, his lender required him to pay his loan in full.

 

[pb4uski]

First off, a bank merger would not trigger a demand.... another bank buying the stock of the lender has no impact on the mortgage between the lender and the borrower.... while other types of contracts might have change-in-control provisions, a mortgage would not.

Second, demand clauses in mortgages are common for non-payment or if you sell the collateral and it is not an assignable loan, but not for willy-nilly so there had to be a reason that he is not elaborating on. He probably was not current on his payments like he though that he was.

 

[JoeWras]

Ramsey lives a more complicated life than he purports. I suspect he had some complex loan arrangement, perhaps a commercial through an LLC or something, which could make it callable.

Most mere mortals don't get a callable mortgage loan.

 

[Crabby Mike]

iirc, the bank calling in his mortgage is what led to Dave Ramsey going broke. He says that he was current on his payments, but that after a bank merger, his lender required him to pay his loan in full.

I'm not a Ramsey fan, but even he has said that he was hugely overextended in rental real estate when his loan was called. Most likely it was a commercial loan, and those rules are different.

 

[ocean]

I'm not a Ramsey fan, but even he has said that he was hugely overextended in rental real estate when his loan was called. Most likely it was a commercial loan, and those rules are different.

Gotcha.

 

[Texas Proud]

iirc, the bank calling in his mortgage is what led to Dave Ramsey going broke. He says that he was current on his payments, but that after a bank merger, his lender required him to pay his loan in full.

Gotcha.

Sounds like you now have an answer... I am not sure if it is correct...


BUT, a bank cannot, repeat, cannot call a mortgage if you are following the contract... even a commercial mortgage... however, commercial mortgages do have language in them about debt ratios, other defaults etc. that a home mortgage does not have...


So, I would challenge anybody to show me a home mortgage where the person is living in the home has be 'called' by a bank when it is not in default... and if it ever did happen what the bank did after the lawsuit ws filed?

 

[joeea]

iirc, the bank calling in his mortgage is what led to Dave Ramsey going broke. He says that he was current on his payments, but that after a bank merger, his lender required him to pay his loan in full.

I don't believe the mortgage on his home was called. If I recall correctly, he was speculating in real estate at the time. He ended up millions of dollars in debt.

Ramsey himself indicates that there is no danger of a mortgage being called when it it being kept up to date monthy:

https://www.daveramsey.com/askdave/mortgage/10891

"There is no risk at all of your mortgage being called. You have a contract and that contract will stand. Mortgages are written completely different than they were in the Great Depression. The reason my stuff got called 20 years ago when I went broke was because I was stupid. I had a lot of short-term 90-day notes that had to be renewed every 90 days because I was buying property, fixing it up and reselling it. If I hadn’t sold it by then, I’d pay the interest and renew it for another 90 days until it sold, and that worked fine until the banks decided they didn’t want to do that anymore. That is, in effect, calling the note."

So, unless you do something incredibly stupid, the note will never get called.

 

[JoeWras]

So, unless you do something incredibly stupid, the note will never get called.

Right. Cancel your insurance, turn it into a brothel, etc. It has to be really extreme.

 

[pb4uski]

They probably couldn't even do it for those... for insurance they would replace it and give the borrower the bill.

 

[youbet]

turn it into a brothel........

I don't think so. Tuning your home into a brothel wouldn't directly violate the terms of a typical mortgage unless that use violated zoning or covenant restrictions. Or, if the mortgage spelled out that it would not allow commercial use of the property such as a home business or renting a room.

But perhaps you were speaking tongue-in-cheek?

 

[JoeWras]

I don't think so. Tuning your home into a brothel wouldn't directly violate the terms of a typical mortgage unless that use violated zoning or covenant restrictions. Or, if the mortgage spelled out that it would not allow commercial use of the property such as a home business or renting a room.

But perhaps you were speaking tongue-in-cheek?

It was mostly tongue in cheek.

The point being you have to really abuse your contract. I know if you cancel your insurance there will be all kinds of means to make sure it doesn't get cancelled by the lien holder/escrow authorities. And I used the brothel as an example of something illegal.

 

[pb4uski]

I think the point of all of this is that any notion that the bank can call your mortgage with no sufficient cause is a scare tactic that is ignorant of the facts.