Wolf,
Many are worried to put cash life savings into stock market especially now...
Many are worried to put cash life savings into stock market especially now...
Mortgage payoff experiences
- Thread starter emmett442
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Originally Posted By: Wolf359
I'm at an all time high in the stock market. It's setting new records today. There's been a huge run up since the election. It's always tough deciding when to get in, but if you're in, I'm riding it for a while. Last year the rate of return for Vanguard Index 500 was 19.9%, this year in just a few weeks, year to date, it's 3.27%. Over the last 3 years, it's averaged 10.7% I'd say the rewards have been quite rich.
And, if my situation were different, I might invest the savings I have. Let's run the numbers and assess risk. I invest $112K instead of paying off my home. I earn 10% over the next 3 years. I pay capital gains tax, and incur $15,000 in mortgage interest costs. My net profit is about $10K over 3 years.
I conclude I can risk my savings account for $3300/year in profit, or I can pay off the mortgage and have near zero risk. AND the security of having zero debt.
I do have other investments and I will leave them alone.
Or, I invest $112K, lose some money, as is typical for my investments, and I'm out, $15K in mortgage interest and (guessing) $15K in investment funds. A lot of risk, for little reward.
I'm at an all time high in the stock market. It's setting new records today. There's been a huge run up since the election. It's always tough deciding when to get in, but if you're in, I'm riding it for a while. Last year the rate of return for Vanguard Index 500 was 19.9%, this year in just a few weeks, year to date, it's 3.27%. Over the last 3 years, it's averaged 10.7% I'd say the rewards have been quite rich.
And, if my situation were different, I might invest the savings I have. Let's run the numbers and assess risk. I invest $112K instead of paying off my home. I earn 10% over the next 3 years. I pay capital gains tax, and incur $15,000 in mortgage interest costs. My net profit is about $10K over 3 years.
I conclude I can risk my savings account for $3300/year in profit, or I can pay off the mortgage and have near zero risk. AND the security of having zero debt.
I do have other investments and I will leave them alone.
Or, I invest $112K, lose some money, as is typical for my investments, and I'm out, $15K in mortgage interest and (guessing) $15K in investment funds. A lot of risk, for little reward.
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Yep. Use that money strictly for mortgage.
HO insurance is $5k a year? [censored]
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
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Originally Posted By: Cujet
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
That's really not that much for a house in a good neighborhood here in Florida.
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
That's really not that much for a house in a good neighborhood here in Florida.
Originally Posted By: Cujet
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
Ahhhh, the JOYS of ownership! The terrible thing is it's true. HO in FL can get pricey...
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
Ahhhh, the JOYS of ownership! The terrible thing is it's true. HO in FL can get pricey...
Originally Posted By: JustinH
I am happy to own a house near Austin TX with a payment of $890 per month including all escrow. People pay $1000 for a shoebox around here, so that was a good financial decision.
I agree! I have several rentals in the suburbs of Houston and they rent in a heartbeat without even having to advertise. People pay over $1500 / month without blinking.
I am happy to own a house near Austin TX with a payment of $890 per month including all escrow. People pay $1000 for a shoebox around here, so that was a good financial decision.
I agree! I have several rentals in the suburbs of Houston and they rent in a heartbeat without even having to advertise. People pay over $1500 / month without blinking.
Originally Posted By: SteveSRT8
Originally Posted By: Cujet
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
Ahhhh, the JOYS of ownership! The terrible thing is it's true. HO in FL can get pricey...
Mortgage total is just under $4K per month. A full 25% of my mortgage consists of taxes and insurance. Add in the interest and I'm not getting anywhere, at all.
While it's too late for me to start over, AND, I understood the math clearly upon signing the mortgage, I do wish I had been able to pay off my homes much more rapidly. If I could start over, I'd purchase my first home with a 10 year mortgage, stay 7 years and do it again. And, I'd purchase a lesser home each time.
While it's impossible to know the future, the market trends and so on, it's easy to understand that a 30 year mortgage is, in general, not a good investment. Home values over the long term often closely match the CPI. Meaning ownership gets you nowhere.
A home in Jax, FL, purchased in 1974, for $28K, is worth $175K today. Exactly matching the CPI.
Originally Posted By: Cujet
Originally Posted By: rsylvstr
HO insurance is $5k a year? [censored]
In my case, it's actually a bit more. Hurricane central here in Jupiter, Florida.
Ahhhh, the JOYS of ownership! The terrible thing is it's true. HO in FL can get pricey...
Mortgage total is just under $4K per month. A full 25% of my mortgage consists of taxes and insurance. Add in the interest and I'm not getting anywhere, at all.
While it's too late for me to start over, AND, I understood the math clearly upon signing the mortgage, I do wish I had been able to pay off my homes much more rapidly. If I could start over, I'd purchase my first home with a 10 year mortgage, stay 7 years and do it again. And, I'd purchase a lesser home each time.
While it's impossible to know the future, the market trends and so on, it's easy to understand that a 30 year mortgage is, in general, not a good investment. Home values over the long term often closely match the CPI. Meaning ownership gets you nowhere.
A home in Jax, FL, purchased in 1974, for $28K, is worth $175K today. Exactly matching the CPI.
Our home insurance is about $850 a year. It's gone up the last few years, maybe $250k value, 35% land.
My last home loan payment was over 10 years back. I kinda do some unconventional stuff though, so it may not work for everyone. Some people excel at wasting $$(not here, just in general).
My last home loan payment was over 10 years back. I kinda do some unconventional stuff though, so it may not work for everyone. Some people excel at wasting $$(not here, just in general).
Originally Posted By: Wolf359
I'm at an all time high in the stock market. It's setting new records today. There's been a huge run up since the election. It's always tough deciding when to get in, but if you're in, I'm riding it for a while. Last year the rate of return for Vanguard Index 500 was 19.9%, this year in just a few weeks, year to date, it's 3.27%. Over the last 3 years, it's averaged 10.7% I'd say the rewards have been quite rich.
Yes, I am leaving my retirement investments alone. I've also made money the last few years. However, the risk of putting my savings account in similar investments when it's at an all time high is what I'm worried about. To me, it's simply safer to pay off the house.
I'm at an all time high in the stock market. It's setting new records today. There's been a huge run up since the election. It's always tough deciding when to get in, but if you're in, I'm riding it for a while. Last year the rate of return for Vanguard Index 500 was 19.9%, this year in just a few weeks, year to date, it's 3.27%. Over the last 3 years, it's averaged 10.7% I'd say the rewards have been quite rich.
Yes, I am leaving my retirement investments alone. I've also made money the last few years. However, the risk of putting my savings account in similar investments when it's at an all time high is what I'm worried about. To me, it's simply safer to pay off the house.
Yep, pay off your house.
Well then. Here we are about 2 years later.
I ended up deciding that the mortgage payoff was the right way for me to go.
We committed, did quite a bit of damage, now have $50k left on the mortgage, with a little over $20k in an account reserved for payoff. We've had automatic transfers into this account. Extrapolating the current rate, we will be done about this time next year: the spring before my first kid starts full time school. Just as planned.
Excited to be *this* close to financial freedom.
Honestly, it hasn't even been that bad. Pretty easy with both of us having our eyes on the same goal and not procrastinating or prolonging it. We haven't had the freedom to whatever we want whenever we want like we used to, but we haven't been eating rice and beans for the last 3 years either. And soon, when it's all over with, we'll have plenty to do whatever whenever.
Was it the best use of my money while the DOW had been freight-training upwards during that time? The numbers probably say no. Do I/will I regret it? Nope.
I ended up deciding that the mortgage payoff was the right way for me to go.
We committed, did quite a bit of damage, now have $50k left on the mortgage, with a little over $20k in an account reserved for payoff. We've had automatic transfers into this account. Extrapolating the current rate, we will be done about this time next year: the spring before my first kid starts full time school. Just as planned.
Excited to be *this* close to financial freedom.
Honestly, it hasn't even been that bad. Pretty easy with both of us having our eyes on the same goal and not procrastinating or prolonging it. We haven't had the freedom to whatever we want whenever we want like we used to, but we haven't been eating rice and beans for the last 3 years either. And soon, when it's all over with, we'll have plenty to do whatever whenever.
Was it the best use of my money while the DOW had been freight-training upwards during that time? The numbers probably say no. Do I/will I regret it? Nope.
With the new tax lawy it is doubtful you can itemize anymore so the benefit of the loan interest is wasted. Pay it off and save the money ever month for retirement. I did that about 15 years ago. You have a lot more freedom without that wight hanging over your head.
As of today, we did it. Completely debt free.
We paid it off in a little less than 6 years. She is 34 years old, I'm 35. Saved approximately $100k in interest and, with no home, auto, credit card, or other debt, have allowed ourselves some pretty sizeable cash flow and thus a huge amount of financial flexibility. Literally, all I need is to pay now is property taxes, insurance, and keep the lights on and fridge full. Will really come in handy as the kids get older or if we ever fall on hard times.
I know this is can be a hot topic with no right or wrong answers. Many hem and haw over it, like I did myself for a while. For those who are considering this path or who are on this path: We've no regrets.
We paid it off in a little less than 6 years. She is 34 years old, I'm 35. Saved approximately $100k in interest and, with no home, auto, credit card, or other debt, have allowed ourselves some pretty sizeable cash flow and thus a huge amount of financial flexibility. Literally, all I need is to pay now is property taxes, insurance, and keep the lights on and fridge full. Will really come in handy as the kids get older or if we ever fall on hard times.
I know this is can be a hot topic with no right or wrong answers. Many hem and haw over it, like I did myself for a while. For those who are considering this path or who are on this path: We've no regrets.
Originally Posted by emmett442
As of today, we did it. Completely debt free.
We paid it off in a little less than 6 years. She is 34 years old, I'm 35. Saved approximately $100k in interest and, with no home, auto, credit card, or other debt, have allowed ourselves some pretty sizeable cash flow and thus a huge amount of financial flexibility. Literally, all I need is to pay now is property taxes, insurance, and keep the lights on and fridge full. Will really come in handy as the kids get older or if we ever fall on hard times.
I know this is can be a hot topic with no right or wrong answers. Many hem and haw over it, like I did myself for a while. For those who are considering this path or who are on this path: We've no regrets.
Well done.
Paying off a mortgage is an incredible feeling.
Bravo!
As of today, we did it. Completely debt free.
We paid it off in a little less than 6 years. She is 34 years old, I'm 35. Saved approximately $100k in interest and, with no home, auto, credit card, or other debt, have allowed ourselves some pretty sizeable cash flow and thus a huge amount of financial flexibility. Literally, all I need is to pay now is property taxes, insurance, and keep the lights on and fridge full. Will really come in handy as the kids get older or if we ever fall on hard times.
I know this is can be a hot topic with no right or wrong answers. Many hem and haw over it, like I did myself for a while. For those who are considering this path or who are on this path: We've no regrets.
Well done.
Paying off a mortgage is an incredible feeling.
Bravo!
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