We have to address this issue. Paying off your home or not. So much foolishness

[jprad]

Quote from Calculator2:

That means bigger the chance that something will happen in a very unpredictable life and Bank will take your home. You will have worked half your life for nothing in the end.

There is no security in life, only opportunity.
Ben Franklin

So, help me out there, Sparky...

Setting aside the small subset of people who have at least 2x the cost of a house, enlighten us on why it's wise to put every frackin' penny you have into an illiquid and marginally appreciating asset.

And, please save this drivel about the banks. Few of them actually hold the paper after you've closed on the mortgage. It, along with most every other mortgage is wrapped up into a structured instrument and sold off to the fixed-income crowd.

Same with this nonsense regarding a catastrophic event causing someone to lose their home. Do they and everyone in their family become magically immune to disease, accident, act of god and a host of other events just because they paid off their mortgage?

Shit still happens, and usually at the worst possible time, thanks to that sadist Murphy.

IMHO, you're daft, misguided or a plain old troll.

In the meantime, I'm happy paying off a 15 yr fixed @ 5.35% and putting that extra cash to work to offset the interest I'm paying as well as it giving me the piece of mind of knowing that it's liquid enough to draw on in case the unexpected happens.

 

[Calculator2]

Quote from jprad:

There is no security in life, only opportunity.
Ben Franklin

So, help me out there, Sparky...

Setting aside the small subset of people who have at least 2x the cost of a house, enlighten us on why it's wise to put every frackin' penny you have into an illiquid and marginally appreciating asset.

And, please save this drivel about the banks. Few of them actually hold the paper after you've closed on the mortgage. It, along with most every other mortgage is wrapped up into a structured instrument and sold off to the fixed-income crowd.

Same with this nonsense regarding a catastrophic event causing someone to lose their home. Do they and everyone in their family become magically immune to disease, accident, act of god and a host of other events just because they paid off their mortgage?

Shit still happens, and usually at the worst possible time, thanks to that sadist Murphy.

IMHO, you're daft, misguided or a plain old troll.

In the meantime, I'm happy paying off a 15 yr fixed @ 5.35% and putting that extra cash to work to offset the interest I'm paying as well as it giving me the piece of mind of knowing that it's liquid enough to draw on in case the unexpected happens.

LOL You are a funny little man.

I now have paid off house and my cash is now available for other adventures.

While you are in 30 year debt because you listen to your bank's advice.

Dafts like you believe that more debt and longer debt is better. Case close pal. Go Home.

 

[clacy]

I agree. I'm in the "pay off your mortgage" crowd as well. Whether you have a job or are a trader, there is something to be said for safety. If your house is paid for, you are in a very strong position, financially.

I am working towards this goal myself. After that if I want to quit my job and trade full time, or just work at a basic job to pay the bills, I could do it financially. There is a great sense of freedom in that thought.

 

[jprad]

I now have paid off house and my cash is now available for other adventures.

You "now" have a paid off house?

While you are in 30 year debt because you listen to your bank's advice.

30? No, 15 year. Thanks for taking the time to read what I posted.

Dafts like you believe that more debt and longer debt is better. Case close pal. Go Home.

Oh, so my debt is "bad," while the debt you used to have on your "now paid off house" was good?

I hope one of your other goals in life, besides getting out of debt (which probably happened by stepping in shit and inheriting it) was to become a monumental asshole.

If so, you succeeded...

 

[bugscoe]

Quote from jprad:

In the meantime, I'm happy paying off a 15 yr fixed @ 5.35% and putting that extra cash to work to offset the interest I'm paying as well as it giving me the piece of mind of knowing that it's liquid enough to draw on in case the unexpected happens.

You're acting like a person who's paid their house off has no "extra cash" as a result.

What do you think the non-existent monthly mortgage payment is?

 

[Kassz007]

Calculator registered in March......is on pace for the most posts ever on ET at a rapid rate......90% of posts he's already made are in regards to how stupid we all (other ET members) and how nobody here trades (how would he know, after 1 week?).

Not to mention his self perceived superior level of intelligence...

All of these things add up to one common denominator........TROLL

 

[jprad]

Quote from clacy:

I agree. I'm in the "pay off your mortgage" crowd as well. Whether you have a job or are a trader, there is something to be said for safety. If your house is paid for, you are in a very strong position, financially.

I am working towards this goal myself. After that if I want to quit my job and trade full time, or just work at a basic job to pay the bills, I could do it financially. There is a great sense of freedom in that thought.

Safety? Freedom?

Nice thoughts, but they're not reality.

I've seen more than a few older retirees in my neighborhood who were forced to sell their paid off house because they could no longer cover the increasing costs of maintenance, property/school tax and utilities.

As the boomers retire it's only going to get worse.

 

[mksummny]

I figured I would put my two cents in on this thread. So I have been trading for 12 years now and have had multiple opportunities to put excess cash in a variety of places. I have over the years bought several rental properties along with my main living residence. I have had on the advice of both my CPA and CFP been told to keep a considerable amount of debt and leverage my cash strength to make more. I for a time listened to them only to realize that not only did I sleep better at night by not being in debt but if I was doing this for "tax deductions" it would be much better for me to write a check to a charity then to a bank and get a "writeoff". I have learned that the borrower is truly slave to the lender. Now I understand that not everyone can be in the position to be debt free, but if you are in a position to pay off your debt because of some cash you have laying around then I emplore you to do it. Its a much better lifestyle and like I said, if your main motivation is to have tax writeoffs, then help out a local charity.

 

[clacy]

Quote from jprad:

Safety? Freedom?

Nice thoughts, but they're not reality.

I've seen more than a few older retirees in my neighborhood who were forced to sell their paid off house because they could no longer cover the increasing costs of maintenance, property/school tax and utilities.

As the boomers retire it's only going to get worse.

And how would an additional mortgage payment improve their situation?

Obviously these people have an income problem, rather than an expense problem....... Big difference.

 

[jprad]

Quote from bugscoe:

You're acting like a person who's paid their house off has no "extra cash" as a result.

What do you think the non-existent monthly mortgage payment is?

It's a fraction of what you'd have otherwise.

A 15yr mortgage @ 5.25% for $250K is going to cost you about $2,400/month. The interest on that note will total $122K over the life of the loan but, you're going to get about 25% of that interest back as a tax deduction so you're out-of-pocket interest burden is about 91K.

So, over 15 years you're going to average about $6K/yr (more in the early life of the loan, less later on).

If you've got a couple hundred grand the worst thing you can do is to pay off your mortgage. It's much better to put that money to work to offset the interest.