Pay off mortgage or borrow off of house

[Warrens69GMC]

Originally Posted by truckin 79

Thanks for all the good info a lot of good stuff there. The only real debt we have is the house everything else is paid off. I will be 55 next year and just want to make my money start working harder for me. My wife is the suspicious type and thinks everyone is out to steal our money, I guess she is right to a degree. I really need to talk to a finance advisor and maybe he can convince her we should invest more or our money sitting in the bank doing nothing but earning 0.08%.

I invested 15k in BITO, and I'm on par to to get 53% in dividends back this year.

[72c20customcamper]

Originally Posted by truckin 79

Thanks for all the good info a lot of good stuff there. The only real debt we have is the house everything else is paid off. I will be 55 next year and just want to make my money start working harder for me. My wife is the suspicious type and thinks everyone is out to steal our money, I guess she is right to a degree. I really need to talk to a finance advisor and maybe he can convince her we should invest more or our money sitting in the bank doing nothing but earning 0.08%.

At that rate you’re losing money .I’m currently earning 4% on my liquid savings

[71CHEVYSHORTBED402]

I was where you were. Before she got half 2018, but that would have cleaned out my savings at the time, and at 3% interest, something like 3K a year interest, I'd rather have had the cash. Nice luxury to have the ability to get that off your back though.

Bitter sweet I live in the same place, it's paid for, rests in peace mother, and worth nearly double the 2018 appraised price. I'm in the Sierra Nv.. Absurd prices driven by California's migration, globalization, covid mentality, gov. and debt-inflation.

Californians have crazy money BTW. My neighborhood of 25 years is a desired location, with freedom and space, so Californians take what homes come available and build RV garages, water falls, pools, no limit, often the same house. 200K landscapes are common. Mine's better, cost 17K for materials, and 10 years back labor. Five lots from me is currently blowing 200K minimum for heavy equipment, and 2 months of rock work. They're making space for a 3.5x40' putting green Smallest lot of them, and it's on an easement, the Mayor lives on the other side. Her lot sucks too, known her 55 years and three neighborhoods, never did have good taste.

Back on topic, sorry.... I'm conservative, but make good decisions sometimes suiting the lifestyle, and short personal home mortgages have never paid a dime interest. The housing crash allowed me to pay the house down in much shorter order. Debt free is good for this soul.

Not sure what you mean by using it for retirement, certainly wouldn't use that money for simple income unless last resort; almost sounds like a reverse mortgage to me. You could use it for some investment.

I know a guy who for the most part doesn't pay mortgages off, he uses the leverage on his properties to buy more properties. Has well over a 100, some are pretty big. The guy is 85, and always looking for something new. With that attitude, as he says, he's set his descendants up for life.

But for the average guy, 60K is still 60K. If you're paying high interest on the house and you have the financial space, I'd pay it off no question. If you haven't already, calculate your annual interest on the house. Keep in mind home interest is deductible in some cases, general income is taxed. And 7% interest for example (perhaps deductible) VS say Vs 5% on a CD which is taxed, well that's a no brainer to me, pay that sucker off.

[WorldsCrappiestTruck]

^^^. Yeah, to lenders….a property with equity is the same as cash in the bank, so people use debt to get more debt, to get more debt to get more cash flow to get more debt, to get more cash flow.

I guess if you have the guts for that kind of thing….it certainly does seem to pay dividends. Seems like a high-stakes game of doing what many of us do….choose which bill is most critical to pay and punt on the rest until they become the most critical.


After some time doing this….you end up with a system that keeps itself
Going. Of course you’d need your own attorney and accountant to make sure you’re legal or you’d drown in paperwork.

[weq92f]

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These are all simple calculations. It comes down to how secure you feel about being able to weather unexpected expenses. I like the idea of paying double or more mortgage payments (partially?) from savings in the interim to reduce the note payoff time. As mentioned, this allows for future adjustments in the face of unexpected circumstances.

However, I'm in the debt free camp. I have none and it is wonderful. My house is completely paid off and so my housing expense is tax, insurance, utilities and whatever other service I choose to enable (internet, utubeTV, netflix, etc.) plus upkeep/maintenance.

It's nice to know I can make it to 62 and free money (max SS benefit) without earning any more income. If I work, I can hold off to 67 and get even more free money.

My investments (SEP instead of 401k) continue to grow and I'll be able to dig into that when necessary all the way up to the point I'm forced to take disbursements from it.

You are in a good position. Keep that in your thoughts as you make decisions in this regard. You don't have to rock the boat at all.

Congratulations!

-Kevin

[A1971Blazer]

something you might consider:
When you're uncertain about what to do and there is no urgent need to decide, hold off on making a choice.
Give yourself time to consider everything and feel comfortable with your decision once you make it.
Establish your plan and set your goals, and then work towards achieving them.

[62c30]

The only real negative I've found having a paid for house is when you get the property tax bill. When you have a mortgage the bank pays it and rolls it into your monthly payment so it didn't seem as bad. A loan is you borrowed money and you're paying it back, but writing the check to the county directly sucks. I call it rent, cause you don't pay it they take your house. And you think you actually own something....

[weq92f]

Originally Posted by 62c30

The only real negative I've found having a paid for house is when you get the property tax bill. When you have a mortgage the bank pays it and rolls it into your monthly payment so it didn't seem as bad. A loan is you borrowed money and you're paying it back, but writing the check to the county directly sucks. I call it rent, cause you don't pay it they take your house. And you think you actually own something....

.

Agreed.

At least the consolation prize if one is relieved of his home by the government is its sale price minus the tax bill!

I walk into the government coffer filler's offices with cash to pay my tax bill nowadays. It's satisfying to me that they see the green moving across the counter. Maybe they will take notice and realize how much $$ they are scraping away from the citizenship. Fortunately, my days of paying 10k+ a year in property taxes (Texas) are over. I now live in a state with income tax (I'm basically retired) and very reasonable property tax.

-Kevin

[70STOVEBOLT]

Originally Posted by weq92f

.

These are all simple calculations. It comes down to how secure you feel about being able to weather unexpected expenses. I like the idea of paying double or more mortgage payments (partially?) from savings in the interim to reduce the note payoff time. As mentioned, this allows for future adjustments in the face of unexpected circumstances.

However, I'm in the debt free camp. I have none and it is wonderful. My house is completely paid off and so my housing expense is tax, insurance, utilities and whatever other service I choose to enable (internet, utubeTV, netflix, etc.) plus upkeep/maintenance.

It's nice to know I can make it to 62 and free money (max SS benefit) without earning any more income. If I work, I can hold off to 67 and get even more free money.

My investments (SEP instead of 401k) continue to grow and I'll be able to dig into that when necessary all the way up to the point I'm forced to take disbursements from it.

You are in a good position. Keep that in your thoughts as you make decisions in this regard. You don't have to rock the boat at all.

Congratulations!

-Kevin

Social Security is not "free money". You paid it all the years you worked. There is no such thing as "free money" as long as the government is involved.

[weq92f]

Originally Posted by 70STOVEBOLT

Social Security is not "free money". You paid it all the years you worked. There is no such thing as "free money" as long as the government is involved.

.

Yes, I understand.. I was just using that phrase as...well a bit of a jab at the gov really. I paid for sure. We all have and I'm coming around to being grateful for it. Whether I could have managed those funds for myself better than our government was able to do is the question.

-Kevin

[70STOVEBOLT]

Originally Posted by weq92f

.

Yes, I understand.. I was just using that phrase as...well a bit of a jab at the gov really. I paid for sure. We all have and I'm coming around to being grateful for it. Whether I could have managed those funds for myself better than our government was able to do is the question.

-Kevin

No question, the answer is yes, lol.

[richard2717]

There is no better feeling than making that last mortgage payment. It takes me from a 1/3 owner to 49/51 owner with the govt. Guess we will never really own it, just paid the rent in advance.