Anyone not agree with paying your house off?

[KrissiK]

We are not in a huge hurry to pay down our mortgage, either. Part of the reason is that we don't want all of our assets to be our home. Especially if the California economy tanks and we need to leave. So, we continue to pay it off, but we're also working on bolstering our savings. We've actually paid off a good chunk of it, so we're not in that bad shape.

[ChrisOR]

I think one difference in opinions arises from location and how hard hit the real estate market is where one lives. In my area, houses are still depreciating and hardly selling, so extra mortgage payments are eaten up by the loss in value. An emergency fund would instead make sense.

 

We sold our home two years ago and have rented since. We considered owning again but this calculator showed us that holding off longer is wise in our area.

[Amy loves Bud]

The way they work (bear with me, I'm finding this hard to explain).

 

Say you have a 100k mortgage but 20k of savings. You put the 20k in an account (savings or current/cheque) in the same bank as holds your mortgage. They only charge you interest on the 80K difference between your mortgage and the savings, which means, in effect, that your interest rate on savings is the same as your mortgage rate. The money remains completely accessible (the account is just a normal instant-access account) and you get credit for every day the money is there - so you get more credit for the beginning of the month when you have more money in your account.

 

Laura

 

I've never heard of this. But I think I like it. I"m assuming this is beyond the down payment?

[Renee in NC]

Really, I thought this was the norm? Are student loans cheaper, or would you not borrow at all for college if needed? Of course I hope we have enough savings, can get scholarships . . .

 

We will not borrow for college at all. Even if I were willing, I would not jeopardize my house for a child's college. We don't even own a house, but if we did I still wouldn't.

 

Here in FL, as long as they meet certain criteria, they get the Bright Futures scholarships. We also get free dual enrollment from 10-12 grade here at the local college. It isn't ideal, but it's realistic.

 

Unless something miraculous happens, their college choices will be limited.

[Peela]

I am reading a specifically Aussie book on paying off investment properties quickly and it really makes sense, once she shows you the figures. The whole negative gearing, tax break thing is not worth it compared to the benefits paying off a house. The amount one wastes in interest is incredible. I am trying to convince hubby to start putting extra money on one of our investment properties rather than just waiting for capital gains.

 

However, we are not in debt and are not committed to paying the kids' university fees. The loans they would take out are not as horrific as the U.S. system and do not need to be repaid immediately, are low interest, and fees seem to be lower here too for most courses. So we will "help" but not pay for the whole thing unless we get a windfall.

 

Dave Ramsey, as someone else said, recommends investing and saving for college before paying off mortgages. Makes sense to me, but for us, we have no debt and dh wont play with the stockmarket, so paying off an investment property seems the best way to invest.

[Geek]

I, for one, will be paying this mortgage off as soon as we can. My plan is to have it gone before our first hits college age. We aren't committed to paying for college, but at least we will have more financial flexibility at that point.

Yes! This is our plan, too.

 

Without a mortgage, life would get so much easier.

 

We paid off our first house and things *were* easier.

 

Then we moved across the country where housing is a lot higher. :rolleyes: So our goal is to have this one paid off by the time our 11yo reaches college age.

[katemary63]

scholarship money and other strategies, they can go to college, but if they need additional loans, they can take on their own debt.

 

:iagree:Never borrow against your house OR take from retirement funds to pay kid's college expenses. (Unless your retirement fund is HUGE and far more then you will need.) When we had the money with our first, we paid for tuition. Lucky her. DH's job and our finances changed (with the market crash of the last couple of years) by the time numbers 2 and 3 got there. Our contribution to them is living expenses that we've been paying all along such as car insurance, room and board, clothing etc. They have to either get scholarships, government aid or loans for the rest. We are not going to jeopardize our future for it. They have many more years left then we do to pay off loans!

[mhg]

I'm too tired to think straight....retracted my babblings

Edited July 20, 2010 by mhg

[Laura Corin]

I've never heard of this. But I think I like it. I"m assuming this is beyond the down payment?

 

We like it a lot: reduced interest payments but the money is still accessible if necessary.

 

Laura