Thanx for the post knowlitte. I disagree with your name; you seem quite informed
Some great thoughts for me to ponder, I'd like to reply off the cuff, curious opinions.
"I couldn't sit this one out.
thanx!.
So you've paid off a home (I'm assuming with some increasing down payments as you may have moved and built equity from previous home purchases/sales; but if not, maybe a full 30 yr loan on a single home purchase)
I had a 15 year loan, it just happened.:smile:
have you considered how much you have already paid the bank(s) on interest (a review of your amortization scheduled may help)? Even at 3.5%, the interest amount you will end up paying is quite substantial (I suggest looking at the amortization schedule with the mortgage you already have). I think the main reason for paying off a home is to not have to pay the bank any more interest.
Sound points. I’ve always subscribed to the “pay it off” position, hence the 15 year loan on my current home. The total interest if I take it maturity is 173k!!! So yes, even a 3.5 is quite costly.
A sound argument against paying off your mortgage is that you can make more money on the market than what you'll pay in interest rate on the money you have on hand over the 30 yrs, but risk tolerance and your timeline will have a lot to do with your decision.
As I said, I’ve always paid bills early, all cars paid off early, and the home 15yr loan. So now I’m 56 years old. Factoring in the pension (as mentioned from the other thread) and “low” interest on this loan, this is my thinking:
I’m healthy now, but in 30 years, who knows? As inflation and cost of general living goes up, my home payment will get lower as years go by compared to everything else. I kinda want to enjoy living now, I’ve always been cheap, maybe a little decadence at this point is my thoughts. I would like to put about 20k into the home to get it the way I want. If I spend all my money paying it off, I can’t do this and there will be little cash for things like a new roof down the line.
Thinking maybe I can enjoy life (responsibly) have cash for stuff like the roof, and hopefully at least match the 3.5 with investments. I’m thinking when I die, who cares if there is a mortgage? The home will always be worth more than I owe, so it won’t hurt my heirs.
Am I crazy?
Is the piece of mind knowing that your house is paid for worth the potential to make more money in the long run? If you make more money in the long run, what are your plans for that money?
I saw some of the other posts you made on another thread and you've considered your take home pay, what's the impact to your take home if you still have a mortgage?
This is the rub. I will have to slowly take money from investments. Ouch… But… I’m thinking if I pay off the mortgage, there will not be much left over – I will just be living.
If you do not have a mortgage, is that extra cash on top of what you had calculated? If so, what could you do with that extra cash that you are not using for a mortgage payment (invest, buy toys, save, or whatever).
If I don’t pay it off, the money (other than the initial 20k or so for stuff) would go into the market, bonds, etc. The guy I spoke to from the Edleman firm seems pretty confident he can exceed the 3.5. But of course, we all know that “Past Performance Is Not Indicative Of Future Results.” Hence my thread here!
Either way, if I was in your shoes, I think I would definitely pay off my new mortgage with the money from my old house. I might consider renting out the old house, if it would more than cover the new mortgage, but rental properties are not fun and can go wrong in many ways (repairs, bad renters, housing market stagnation, etc.).
I ruled out renting this one, too many horror stories.
My mind is NOT made up on this, and you have just made it harder as I was leaning towards not paying the home off. What a quandary I’m in!
You're way ahead of an awful lot of people in this world...
