[quote=UCGal]I’ve been reading this thread with interest. I think part of the differences expressed are because of different ages and stages of life.
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I think you make an excellent point UCGal. I do think you’re going to get a lot of different chains of thought on this depending on your stage in life, age, if you have kids vs. no kids, etc. I don’t even think there IS a right or wrong answer on this. What might be right for one person might not be right for another. Also, people have different tolerances of risk and also financial comfort.
I’m really loving the different answers on this thread. Several of the responses are quite interesting.
[quote=sym]The thread topic about 21% of homes w/ paid off mortgages caught my attention this morning. Curious to learn about the profile of owners in this scenario I read the entire thread with great interest.
20% of mortgage free homes is a healthy start, but the article did not expand on the type of owners. My guess is the 20% would be a combination of long term owners paying off their loans, parents buying properties for their kids, prudent Piggs, and possibly the cash purchases from investors we hear about.
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I was also curious at the breakdown of the profile of the 21.5% that have their homes paid off. I posted the same thread on another forum and it was interesting to read from some long-time posters that explained how most of their neighbors have their homes paid off as their neighbors are mostly older.
One guy in La Mesa said in his neighborhood 16 out of 20 homes are all paid off with all the owners in their 70’s or older. One of my friends in Lemon Grove said his neighborhood is in a similar type situation. So it seems like there are a huge number in this category.
I know here recently there are a lot of cash sales but I guess that number is dwarfed by the amount of older people that have paid off their mortgages and are free and clear.
[quote=carlsbadworker]I am agreeing with AN/flu now since they are not really talking about leveraging at all costs and never pay off the house ever.
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I also think that I misunderstood some of what was being discussed about perpetually refinancing and leveraging over and over. I guess that doesn’t seem to be the case but I also don’t think CA Renter should take too much flack for her comment. When she said “avoid debt at all cost” I think that is more of an expression not that someone would never take on any debt but that those that do have debt want to quickly pay it off and get rid of it as soon as possible. This sounds like it has served her and her husband well and it’s also served me very well and served other clients and friends that I have in this same category.
Also, I think It’s important to note the difference in thinking as well. Some terms were thrown around that make it sound like some people consider a paid off house as a potential liability or mention the possibility or need to possibly just “send in the keys” or walk away from the property. The thing is that guys like me would NEVER even consider or even think about this sort of thing. It doesn’t even compute in my mind.
I do realize that it might be wise for some people to probably do that with their lender. (Although quite honesty I truly believe in the majority of the cases it was one’s stupidity or greed or ignorance in buying something that they couldn’t or shouldn’t have bought in the first place). People have different opinions on moral hazard but that chain of thought doesn’t even enter my mind or probably others that strive to avoid all debt.
I guess I’m a Generation X (I missed Generation Y by a few short years as most definition I see online mention Generation Y starts in the late 1970’s). But I probably have the mentality of someone much older. Growing up I kept getting hammered into my head to take advantage of compound interest, stay out of debt, pay off your house as soon as you can.
Guy like me don’t think about tomorrow or next year or even 5 years from now. Guys like me project and think about far from now. And in almost every scenario I would always want to have a house paid off. Again, not saying it’s right or wrong. It works for me as I already have enough in the stock market and already own several investment properties.
I’m the type that pre-pays off my Mello Roos taxes ahead of time even though I just purchased the house in 2011. I like to think out longer term and I’d rather be too conservative.
I really appreciate all the great posts. They have been really interesting to read.
