Home › Forums › Financial Markets/Economics › Should I pay off my house?
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matt.
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June 21, 2011 at 12:46 AM #706310June 21, 2011 at 1:23 AM #705118
earlyretirement
ParticipantI think everyone has different circumstances and financial situations that they have to evaluate. Also, some people already have plenty of money in the stock market and they don’t want any more risk and savings accounts, CD’s are paying almost nothing anyway.
I’ve always liked owning properties free and clear with no mortgages or debt at all on them. I know most people would disagree with that strategy but many of the people that disagree probably aren’t in the situation to pay off their mortgages or own multiple properties without mortgages.
Definitely talk to a good accountant about your personal situation to evaluate your situation.
Many talk about “cheap money” and taking it and using it for other things. But I can tell you there are many people that have the ability to pay off their mortgage but then do silly things with their money. Or invest horribly in horrible stocks or bad investments and blow the savings. So you have to think about it from that perspective as well.
Paying off your mortgage is a conservative move which isn’t always a bad thing in this day and age. Much just depends how well diversified you already are and how much asset allocation you already have. Also, what would you do with the money if you didn’t pay it off?
June 21, 2011 at 1:23 AM #705214ParticipantI think everyone has different circumstances and financial situations that they have to evaluate. Also, some people already have plenty of money in the stock market and they don’t want any more risk and savings accounts, CD’s are paying almost nothing anyway.
I’ve always liked owning properties free and clear with no mortgages or debt at all on them. I know most people would disagree with that strategy but many of the people that disagree probably aren’t in the situation to pay off their mortgages or own multiple properties without mortgages.
Definitely talk to a good accountant about your personal situation to evaluate your situation.
Many talk about “cheap money” and taking it and using it for other things. But I can tell you there are many people that have the ability to pay off their mortgage but then do silly things with their money. Or invest horribly in horrible stocks or bad investments and blow the savings. So you have to think about it from that perspective as well.
Paying off your mortgage is a conservative move which isn’t always a bad thing in this day and age. Much just depends how well diversified you already are and how much asset allocation you already have. Also, what would you do with the money if you didn’t pay it off?
June 21, 2011 at 1:23 AM #705810ParticipantI think everyone has different circumstances and financial situations that they have to evaluate. Also, some people already have plenty of money in the stock market and they don’t want any more risk and savings accounts, CD’s are paying almost nothing anyway.
I’ve always liked owning properties free and clear with no mortgages or debt at all on them. I know most people would disagree with that strategy but many of the people that disagree probably aren’t in the situation to pay off their mortgages or own multiple properties without mortgages.
Definitely talk to a good accountant about your personal situation to evaluate your situation.
Many talk about “cheap money” and taking it and using it for other things. But I can tell you there are many people that have the ability to pay off their mortgage but then do silly things with their money. Or invest horribly in horrible stocks or bad investments and blow the savings. So you have to think about it from that perspective as well.
Paying off your mortgage is a conservative move which isn’t always a bad thing in this day and age. Much just depends how well diversified you already are and how much asset allocation you already have. Also, what would you do with the money if you didn’t pay it off?
June 21, 2011 at 1:23 AM #705961ParticipantI think everyone has different circumstances and financial situations that they have to evaluate. Also, some people already have plenty of money in the stock market and they don’t want any more risk and savings accounts, CD’s are paying almost nothing anyway.
I’ve always liked owning properties free and clear with no mortgages or debt at all on them. I know most people would disagree with that strategy but many of the people that disagree probably aren’t in the situation to pay off their mortgages or own multiple properties without mortgages.
Definitely talk to a good accountant about your personal situation to evaluate your situation.
Many talk about “cheap money” and taking it and using it for other things. But I can tell you there are many people that have the ability to pay off their mortgage but then do silly things with their money. Or invest horribly in horrible stocks or bad investments and blow the savings. So you have to think about it from that perspective as well.
Paying off your mortgage is a conservative move which isn’t always a bad thing in this day and age. Much just depends how well diversified you already are and how much asset allocation you already have. Also, what would you do with the money if you didn’t pay it off?
June 21, 2011 at 1:23 AM #706325ParticipantI think everyone has different circumstances and financial situations that they have to evaluate. Also, some people already have plenty of money in the stock market and they don’t want any more risk and savings accounts, CD’s are paying almost nothing anyway.
I’ve always liked owning properties free and clear with no mortgages or debt at all on them. I know most people would disagree with that strategy but many of the people that disagree probably aren’t in the situation to pay off their mortgages or own multiple properties without mortgages.
Definitely talk to a good accountant about your personal situation to evaluate your situation.
Many talk about “cheap money” and taking it and using it for other things. But I can tell you there are many people that have the ability to pay off their mortgage but then do silly things with their money. Or invest horribly in horrible stocks or bad investments and blow the savings. So you have to think about it from that perspective as well.
Paying off your mortgage is a conservative move which isn’t always a bad thing in this day and age. Much just depends how well diversified you already are and how much asset allocation you already have. Also, what would you do with the money if you didn’t pay it off?
June 21, 2011 at 1:34 AM #705128CA renter
Participant[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
June 21, 2011 at 1:34 AM #705224Participant[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
June 21, 2011 at 1:34 AM #705820Participant[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
June 21, 2011 at 1:34 AM #705971Participant[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
June 21, 2011 at 1:34 AM #706335Participant[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
June 21, 2011 at 3:41 AM #705138Dougie944
ParticipantWe’ve all heard the stories of people that have lost fortunes. I can’t think of any of those that I have read where the person had a paid off house. Not saying it couldn’t happen, but…..
The best question on this thread right now asked Matt what he would do with the 500k if he didn’t pay off the house. Not an easy answer for me.
June 21, 2011 at 3:41 AM #705234ParticipantWe’ve all heard the stories of people that have lost fortunes. I can’t think of any of those that I have read where the person had a paid off house. Not saying it couldn’t happen, but…..
The best question on this thread right now asked Matt what he would do with the 500k if he didn’t pay off the house. Not an easy answer for me.
June 21, 2011 at 3:41 AM #705830ParticipantWe’ve all heard the stories of people that have lost fortunes. I can’t think of any of those that I have read where the person had a paid off house. Not saying it couldn’t happen, but…..
The best question on this thread right now asked Matt what he would do with the 500k if he didn’t pay off the house. Not an easy answer for me.
June 21, 2011 at 3:41 AM #705981ParticipantWe’ve all heard the stories of people that have lost fortunes. I can’t think of any of those that I have read where the person had a paid off house. Not saying it couldn’t happen, but…..
The best question on this thread right now asked Matt what he would do with the 500k if he didn’t pay off the house. Not an easy answer for me.
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