kathkath Posted March 28, 2013 Share Posted March 28, 2013 If you could move money around without paying penalties, would you pay off your mortgage early? Quote Link to comment Share on other sites More sharing options...
OrganicAnn Posted March 28, 2013 Share Posted March 28, 2013 As long as you still have plenty of cash in accounts and you weren't using it all to pay off the debt, then yes. Quote Link to comment Share on other sites More sharing options...
Rebecca VA Posted March 28, 2013 Share Posted March 28, 2013 Absolutely. In fact, I just mentioned to my husband that we need to take money out of our money market account and do that very thing. Quote Link to comment Share on other sites More sharing options...
Missouri Okie Posted March 28, 2013 Share Posted March 28, 2013 Yes! Quote Link to comment Share on other sites More sharing options...
HRAAB Posted March 28, 2013 Share Posted March 28, 2013 Yes, and we did. Quote Link to comment Share on other sites More sharing options...
Dandelion Posted March 28, 2013 Share Posted March 28, 2013 Yes. We did as well. Quote Link to comment Share on other sites More sharing options...
LucyStoner Posted March 28, 2013 Share Posted March 28, 2013 Heck yeah. Quote Link to comment Share on other sites More sharing options...
Jennifer3141 Posted March 28, 2013 Share Posted March 28, 2013 Yes and this is why we don't have a mortgage! :) Quote Link to comment Share on other sites More sharing options...
kathkath Posted March 28, 2013 Author Share Posted March 28, 2013 For those of you who did, had you been given advice not to? Since you have paid it off, what has resulted that you may or may not have expected?? Ty!! Quote Link to comment Share on other sites More sharing options...
jhschool Posted March 28, 2013 Share Posted March 28, 2013 We would if we had the money...but we don't. :( Quote Link to comment Share on other sites More sharing options...
ErinE Posted March 28, 2013 Share Posted March 28, 2013 Is there six months to one year in savings? Are annual limits for retirement accounts reached? Will retirement accounts remain untouched? If the answer to all of the above is yes, then definitely I would pay off the mortgage. Then I'd save the money previously used for the house note. Quote Link to comment Share on other sites More sharing options...
msjones Posted March 28, 2013 Share Posted March 28, 2013 We did it. Yes, we had different opinions about early payoff. And really, mortgage rates are so low now, that it might have been a better move financially to keep the mortgage. But, hindsight is 20-20. We did it for the peace of mind, to be out from under the bank's thumb, and to have money freed up each month for other things. We haven't regretted it for a second. Quote Link to comment Share on other sites More sharing options...
Trilliums Posted March 28, 2013 Share Posted March 28, 2013 For those of you who did, had you been given advice not to? Since you have paid it off, what has resulted that you may or may not have expected?? Ty!! Sometimes on college boards I read of parents who own their homes mentioning how high their EFC is for college costs. I see your kids are pretty young though, so if you are in a position to potentially pay it off faster now, unknown college costs are probably not a big consideration. Just the only caveat that immediately comes to mind. Quote Link to comment Share on other sites More sharing options...
Mommyof4ks Posted March 28, 2013 Share Posted March 28, 2013 If we had the money, yes we would pay it off early. Not owing banks money is always a good thing IMO. Quote Link to comment Share on other sites More sharing options...
Liz CA Posted March 28, 2013 Share Posted March 28, 2013 If you could move money around without paying penalties, would you pay off your mortgage early? Yes. Period. No tax deduction is going to afford me that peace of mind if I was living somewhere free and clear - except prop taxes. Quote Link to comment Share on other sites More sharing options...
KrissiK Posted March 28, 2013 Share Posted March 28, 2013 We could, but for various reasons we aren't. I think the biggest reason is that we don't want all (or even a good portion)of our money tied up in our house. Living in California, things are kind of unstable around here and if we tie up a good deal of cash in property here and then decide that things are going farther south than we choose to tolerate, then we want to be able to pick up and move if we need to. We have a low interest rate on a 15 year loan, we're making decent returns on investments, so it's just not something we are considering. We talk about it from time to time, but that's about it. Quote Link to comment Share on other sites More sharing options...
PentecostalMom Posted March 28, 2013 Share Posted March 28, 2013 As long as you still have plenty of cash in accounts and you weren't using it all to pay off the debt, then yes. Yes! Is there six months to one year in savings? Are annual limits for retirement accounts reached? Will retirement accounts remain untouched? If the answer to all of the above is yes, then definitely I would pay off the mortgage. Then I'd save the money previously used for the house note. If we had the money, yes we would pay it off early. Not owing banks money is always a good thing IMO. This. We are prior military and DOD and own a home I so *wish* we could get out from under. I am thankful that we have consistent tenants and are actually making money on the property, but I so wish we could pay it off or sell it. As it is, dh has a degree in Building Construction/Project Management and with the economy cannot find a decent paying job so he is back in school to become a Law Enforcement Officer. Scraping by again until he graduates in about 90 days. Hopefully then it will be on to bigger and better things. Quote Link to comment Share on other sites More sharing options...
SKL Posted March 28, 2013 Share Posted March 28, 2013 It depends on your overall financial situation. You quit paying mortgage interest, you lose your tax deduction. You might do better to pay off higher interest loans, or other loans without a deduction even though the interest is lower, or leave the money in a place where it can produce returns that are higher than your after-tax mortgage interest. For example, when I was on a payroll, I first put aside the max I could put into my 401K. Even the part that didn't get me an employer match was beneficial, because it cut my taxes and earned me tax-deferred interest, while I got a tax deduction for the mortgage interest I paid. That said, I paid off all my debts years ago and it's a great feeling. Quote Link to comment Share on other sites More sharing options...
Desert Rat Posted March 28, 2013 Share Posted March 28, 2013 Yes. Quote Link to comment Share on other sites More sharing options...
Pod's mum Posted March 28, 2013 Share Posted March 28, 2013 I nearly paid off my mortgage very early a few years ago and then deliberately cut the repayments right back. I had been putting everything into it. The loan I had was a 25 yr loan with redraw option, so I did not need to keep any other safety net.. Life events meant I needed to borrow back and was able to do so online, no hassles. I could not get a loan now, so having this available for 'rainy days', car repair, replacement, lawyers etc has been very useful. When I again get it right down I intend to keep it open, as there are costs involved obtaining a new loan and the homeloan interest rate is much better than a personal loan. It's like a permanent line of credit. (I don't have a credit card.) Quote Link to comment Share on other sites More sharing options...
mytwomonkeys Posted March 28, 2013 Share Posted March 28, 2013 yes. Quote Link to comment Share on other sites More sharing options...
LBS Posted March 28, 2013 Share Posted March 28, 2013 We are considering using retirement money to pay off the mortgage in six months, when husband hits 58.5. Generally, it seems like the huge amount of interest vs. the tax deduction, cannot be a draw. Has anybody analyzed this? Quote Link to comment Share on other sites More sharing options...
catz Posted March 28, 2013 Share Posted March 28, 2013 Yes. We're working on it now. Hoping to have it gone before oldest attends college. We have no other debt. Quote Link to comment Share on other sites More sharing options...
Incognito Posted March 28, 2013 Share Posted March 28, 2013 I think it depends on where you live. In Canada, mortage interest is not deductible, so yes. Quote Link to comment Share on other sites More sharing options...
Seasider Posted March 28, 2013 Share Posted March 28, 2013 If I were otherwise debt free and would still have at minimum an emergency fund of at least 3 months of expenses...in a heartbeat! Quote Link to comment Share on other sites More sharing options...
SKL Posted March 28, 2013 Share Posted March 28, 2013 We are considering using retirement money to pay off the mortgage in six months, when husband hits 58.5. Generally, it seems like the huge amount of interest vs. the tax deduction, cannot be a draw. Has anybody analyzed this? I used to have an elaborate Excel spreadsheet to calculate the net effect. Personally I would not assume it away. What else could you do with the money? How much could it earn? Are there tax incentives attached with certain options? An employer match? Could you save utilities by doing home improvements earlier than otherwise? Save gas mileage by buying a new car? Get discounts by paying things in lump sums? It all figures into the analysis. Of course it is not unlikely that paying off the house is the best plan. But it's not a foregone conclusion IMO. Quote Link to comment Share on other sites More sharing options...
sbgrace Posted March 28, 2013 Share Posted March 28, 2013 We paid off our home before we had kids. Make sure you have enough savings left after the pay off to handle unexpected events. If you have other debts, pay those first. You'll lose a mortgage exemption/tax benefits but you'll save the interest so it may be a financial wash or close to it depending on how much you owe. I'd run the numbers. Quote Link to comment Share on other sites More sharing options...
Running the race Posted March 28, 2013 Share Posted March 28, 2013 If I were otherwise debt free and would still have at minimum an emergency fund of at least 3 months of expenses...in a heartbeat! WSS! Quote Link to comment Share on other sites More sharing options...
LibraryLover Posted March 28, 2013 Share Posted March 28, 2013 Absolutely not at this time. Quote Link to comment Share on other sites More sharing options...
Pawz4me Posted March 28, 2013 Share Posted March 28, 2013 No. We have plenty of available funds to pay it off (wouldn't even have to move anything around), but in our opinion it would be financial idiocy. Our investments are currently earning a significantly higher rate of return than the interest rate on our mortgage. Plus the current state of the real estate market makes it a doubly bad idea. Quote Link to comment Share on other sites More sharing options...
Mama Geek Posted March 28, 2013 Share Posted March 28, 2013 We did it and would do it again in a heartbeat. Do make sure all your other higher interest debts are paid off first. We have had our house paid off for almost 5 years and it has given us so much freedom. Quote Link to comment Share on other sites More sharing options...
Momma2Many66 Posted March 28, 2013 Share Posted March 28, 2013 We follow Dave Ramsey, so of course our goal was to pay our farm off early and live totally debt free. Dave Ramsey says the paid off mortgage has taken the status symbol place of the BMW in America today. After scrimping and saving and living bare bones for many years and sticking to a strict budget ( cash purchases and necessities only, no eating out, no cell phones, no cable/satelite, no pricey hobbies/vacations or extra-curricular activities, growing much of our own foods and eating lots of beans and rice, only shopping at GoodWill and yard sales, waiting on all remodeling jobs for home, selling lots of stuff on ebay and Craigs List, working side jobs for extra money), we were able to pay our 11 acre farm off in full last month. We followed Dave Ramsey's baby steps and first made sure we had a 6 month plus emergency fund, paying 15% into a retirement fund, and no debt of any kind (all vehicles are purchased used and paid for in cash) and we have no credit cards or loans. Now I will take that old mortgage payment and roll it into savings and sinking funds every month and have some fun splurges every once in a while. The ability to live totally debt free and to have that peace of mind is priceless to us !! My grandmother used to tell us " You have a today without, so you can have a tommorrow with". Her wisdom and perserverance through hard times during the Great Depression has been a real motivator to our family to stick to the plan and see it through to the finish line. Quote Link to comment Share on other sites More sharing options...
linders Posted March 28, 2013 Share Posted March 28, 2013 We did. It is very freeing knowing the roof over your head is yours. Just make sure you still have some savings leftover. Quote Link to comment Share on other sites More sharing options...
Melissa in Australia Posted March 28, 2013 Share Posted March 28, 2013 We follow Dave Ramsey, so of course our goal was to pay our farm off early and live totally debt free. Dave Ramsey says the paid off mortgage has taken the status symbol place of the BMW in America today. After scrimping and saving and living bare bones for many years and sticking to a strict budget ( cash purchases and necessities only, no eating out, no cell phones, no cable/satelite, no pricey hobbies/vacations or extra-curricular activities, growing much of our own foods and eating lots of beans and rice, only shopping at GoodWill and yard sales, waiting on all remodeling jobs for home, selling lots of stuff on ebay and Craigs List, working side jobs for extra money), we were able to pay our 11 acre farm off in full last month. We followed Dave Ramsey's baby steps and first made sure we had a 6 month plus emergency fund, paying 15% into a retirement fund, and no debt of any kind (all vehicles are purchased used and paid for in cash) and we have no credit cards or loans. Now I will take that old mortgage payment and roll it into savings and sinking funds every month and have some fun splurges every once in a while. The ability to live totally debt free and to have that peace of mind is priceless to us !! My grandmother used to tell us " You have a today without, so you can have a tommorrow with". Her wisdom and perserverance through hard times during the Great Depression has been a real motivator to our family to stick to the plan and see it through to the finish line. :hurray: :hurray: Welcome to the ranks of the mortgage free. It is a great feeling actually OWNING your own property isn't it. :hurray: Quote Link to comment Share on other sites More sharing options...
lynn Posted March 28, 2013 Share Posted March 28, 2013 Absolutely and already did. We did not follow Ramsey, we listened to Larry Burkett for years and have been debt free throughout our marriage and teaching our kids the same financial principles. Quote Link to comment Share on other sites More sharing options...
lynn Posted March 28, 2013 Share Posted March 28, 2013 It depends on your overall financial situation. You quit paying mortgage interest, you lose your tax deduction. You might do better to pay off higher interest loans, or other loans without a deduction even though the interest is lower, or leave the money in a place where it can produce returns that are higher than your after-tax mortgage interest. For example, when I was on a payroll, I first put aside the max I could put into my 401K. Even the part that didn't get me an employer match was beneficial, because it cut my taxes and earned me tax-deferred interest, while I got a tax deduction for the mortgage interest I paid. That said, I paid off all my debts years ago and it's a great feeling. My dad argued with me about losing tax deduction. He would not see that weighing a small tax deduction each year does not always come close to how much you are paying in interest and PMI for 15-30 years. Quote Link to comment Share on other sites More sharing options...
xixstar Posted March 28, 2013 Share Posted March 28, 2013 I would pay mine off after: - all debts are paid - when we have retirement accounts full funded - when we have 9 months of savings (that will quickly swell beyond 12 months once there isn't a monthly mortgage payment in there) I would really really love to have my house paid off. But first, I'd really like to be debt free and have sufficient savings and retirement. Quote Link to comment Share on other sites More sharing options...
Alessandra Posted March 28, 2013 Share Posted March 28, 2013 No. We have plenty of available funds to pay it off (wouldn't even have to move anything around), but in our opinion it would be financial idiocy. Our investments are currently earning a significantly higher rate of return than the interest rate on our mortgage. Plus the current state of the real estate market makes it a doubly bad idea. :iagree: I think you have to look at your individual picture very carefully -- if investment income + mortgage tax deduction > mortgage interest + income tax on investments.... Of course, that is a simplistic way of looking at it, but I would want to run my numbers in a variety of scenarios before deciding. Quote Link to comment Share on other sites More sharing options...
G5052 Posted March 28, 2013 Share Posted March 28, 2013 I would pay mine off after: - all debts are paid - when we have retirement accounts full funded - when we have 9 months of savings (that will quickly swell beyond 12 months once there isn't a monthly mortgage payment in there) I would really really love to have my house paid off. But first, I'd really like to be debt free and have sufficient savings and retirement. Some would add college savings for at least a state school, long-term care insurance, and disability insurance. Because of the above, we are not paying it off early, although we only have five years left at this point. Quote Link to comment Share on other sites More sharing options...
NicksMama-Zack's Mama Too Posted March 28, 2013 Share Posted March 28, 2013 No. We have plenty of available funds to pay it off (wouldn't even have to move anything around), but in our opinion it would be financial idiocy. Our investments are currently earning a significantly higher rate of return than the interest rate on our mortgage. Plus the current state of the real estate market makes it a doubly bad idea. ITA. If I really wanted to do it, I would make sure I had the following first: - Emergency fund (with the job market, I'd have at least 1 year of living expenses) - 401K - IRA (remember a SAHM can establish and contribute to an IRA up to $5K per year). - Dividend-producing stock/stock funds (utilities are paying well) Quote Link to comment Share on other sites More sharing options...
Chris in VA Posted March 28, 2013 Share Posted March 28, 2013 Maybe. We are going to sell our house when we leave the Rectory we currently live in. I don't care if it's paid off before that or not, as it has gained in value by over 50%. Quote Link to comment Share on other sites More sharing options...
Mnemosyne Posted March 28, 2013 Share Posted March 28, 2013 If I don't have anything I can invest it in that I won't get a higher return from. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 28, 2013 Share Posted March 28, 2013 We have a 10 year mortgage and we are paying off in 7...October is the last payment. :party: We also had a construction loan for all of the renovation work we did here. That will be paid off at the same time which would be 3 years early. I'm planning on having friends over for a mortgage burning party once we receive the free and clear title to the house. I'm having it catered so I don't have to cook! :D Faith Quote Link to comment Share on other sites More sharing options...
Scarlett Posted March 28, 2013 Share Posted March 28, 2013 We could, but for various reasons we aren't. I think the biggest reason is that we don't want all (or even a good portion)of our money tied up in our house. Living in California, things are kind of unstable around here and if we tie up a good deal of cash in property here and then decide that things are going farther south than we choose to tolerate, then we want to be able to pick up and move if we need to. We have a low interest rate on a 15 year loan, we're making decent returns on investments, so it's just not something we are considering. We talk about it from time to time, but that's about it. I don't understand this. Wouldn't it be easier to "pick up and move" if you had your house paid for? Quote Link to comment Share on other sites More sharing options...
Mnemosyne Posted March 28, 2013 Share Posted March 28, 2013 I don't understand this. Wouldn't it be easier to "pick up and move" if you had your house paid for? I'm assuming she's talking about having the cash reserves to be able to move. If you throw all your extra cash at the house, it'd be more difficult to move if needed. Quote Link to comment Share on other sites More sharing options...
J-rap Posted March 28, 2013 Share Posted March 28, 2013 We could, since we recently sold my husband's business due to disability. However, our financial advisor has advised us NOT to pay it off, suggesting that we could make significantly more by investing that money instead. Our situation might be somewhat different than most, however, in that my husband may or may not ever work again, and our mortgage payments are very, very low. We haven't decided yet what we'll do. Quote Link to comment Share on other sites More sharing options...
NicksMama-Zack's Mama Too Posted March 28, 2013 Share Posted March 28, 2013 We could, since we recently sold my husband's business due to disability. However, our financial advisor has advised us NOT to pay it off, suggesting that we could make significantly more by investing that money instead. Our situation might be somewhat different than most, however, in that my husband may or may not ever work again, and our mortgage payments are very, very low. We haven't decided yet what we'll do. Financial advisor, Ric Edelman also recommends not paying off your mortgage. We tend to follow his suggestions. http://www.ricedelman.com/cs/education/article?articleId=232 Quote Link to comment Share on other sites More sharing options...
Miss Mousie Posted March 28, 2013 Share Posted March 28, 2013 I know it is wiser to calculate which option offers the highest net return, but really, I don't care. My house is mine - I care much more about that. Quote Link to comment Share on other sites More sharing options...
catz Posted March 28, 2013 Share Posted March 28, 2013 I know it is wiser to calculate which option offers the highest net return, but really, I don't care. My house is mine - I care much more about that. I agree. I posted earlier we are on a plan to pay off mortgage before oldest gets to college age. We have money flowing into investments and 401K as well, we aren't pulling it from anywhere else. We're just doubling our mortgage payments most months. We have the ability to pull back if we need to. You also need to think about future expenses. If we can help our kids outright with college and not get loans (or them needing huge student loans), that's a huge benefit to them launching as adults. We feel lucky this is an option for us. Quote Link to comment Share on other sites More sharing options...
Hoot Posted March 28, 2013 Share Posted March 28, 2013 Yes. We did this several years ago and it was the best thing we ever did. Before I was 30 yrs. old we owned our home outright. I remember my grandparents going to pay the last payment on their house when they were in their late 50's, so it was a very good feeling to be done so early. Quote Link to comment Share on other sites More sharing options...
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