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The main caveat, of course, is that mortgage prepayment is very illiquid. This means you need to be sure you have enough liquid funds elsewhere for emergencies and for buying the next house (if you do that before selling the old one).
Well, you could setup a HELOC just in case you need those funds.
Quote:
Originally Posted by CollieMan
It's not guaranteed. The home can lose value.
True, in the Chicago burbs where I'm living, it's not uncommon to see homes selling for less than what the owner paid.
It's all a gamble. I put the majority of my available cash into stocks, but I also throw a little extra at the mortgage.
Well, you could setup a HELOC just in case you need those funds.
......
NO! A heloc works when the economy is doing well, when housing costs are increasing and when you really can get by without the loan. Just because you are approved for a heloc does not mean you will get the money years later if you need it. The banks protect themselves with all sorts of restrictions.
My sister was in desperate need of an approved heloc when her husband died and she needed to settle the estate and debts. The bank required her to pay off the heloc at a crippling rate that almost sent her to bankruptcy.
helocs require the same credentials now as mortgages. 2008 saw the banks not even having the money to loan out .
there is nothing as safe and secure as having your own dough accessible to you, not money you can only borrow from others by using a property as collateral
helocs require the same credentials now as mortgages. 2008 saw the banks not even having the money to loan out .
there is nothing as safe and secure as having your own dough accessible to you, not money you can only borrow from others by using a property as collateral
That’s because you likely don’t hang out in investment forums .... they are filled with many who paid off low rate mortgages since 2008 and gave up 300% in gains on the extra money they paid in to save 4% and are kicking themselves for not being smarter
That’s because you likely don’t hang out in investment forums .... they are filled with many who paid off low rate mortgages since 2008 and gave up 300% in gains on the extra money they paid in to save 4% and are kicking themselves for not being smarter
Implying that paying off your mortgage early isn't smart basically calls those people dumb. I hardly think that. I know many people who paid off their mortgages and say it was the happiest day of their lives. They are a million ways to set yourself up for a great retirement financially. They don't all involve wringing every last nickel out of your money.
If people are doing well, leave them alone. I see too many people here deriding others for not following the strict path to being Scrooge McDuck. Drive a new car? idiot. Pay off your mortgage? idiot. I could disparage every person here for something I think is stupid to spend money on. You eat out a lot. should I pipe up and say if you hang out on an investment forum you'll wake up one day and realize that wasn't very smart?
Jeez! People retire all the time in great shape without following the CD prescribed path to riches. It's fine to bring up alternative ideas, but too much here is do what I do or you're stupid either directly or implied. As I've said before. This should be a forum to generate ideas and suggestions that can be further investigated as to how it applies to you. It's not boilerplate advice. Bring up all the facts and figures you want. They are historical facts that exist in a vacuum. How they work and apply to each individual requires way more research and thought than a reply on here.
I very rarely post. There are a lot of ways to accomplish your goals. This forum should allow those other ideas to exist without bashing them down. They may not historically bring you the most money, but very well may fit your plan and temperament.
I expect strong rebuttal telling me why I'm wrong. Don't care. I retired at 60, have some toys, a nice house and am financially secure. I did it being both smart and stupid according to some. I wouldn't change a thing.
i didn't say anyone is dumb . . you are misconstruing what was said
.. i said " you have those on investment forums that had said they wished they were smarter about it and ARE KICKING THEMSELVES .."
Quote:
Originally Posted by mathjak107
That’s because you likely don’t hang out in investment forums .... they are filled with many who paid off low rate mortgages since 2008 and gave up 300% in gains on the extra money they paid in to save 4% and are kicking themselves for not being smarter
which was in reply to this :
Quote:
Originally Posted by heart84
I can't remember the last time I heard someone complaining about having their mortgage paid off and reducing their debt burden.........
so you may want to save that rant for where it applies . if the poster was active in investment forums they would see people saying frequently they shot themselves in the foot .
how you got to that means me calling all others dumb is beyond me .
Last edited by mathjak107; 08-03-2019 at 04:50 AM..
Implying that paying off your mortgage early isn't smart basically calls those people dumb. I hardly think that. I know many people who paid off their mortgages and say it was the happiest day of their lives. They are a million ways to set yourself up for a great retirement financially. They don't all involve wringing every last nickel out of your money.
......
I would not call them dumb. Instead I see lots of people acting based on emotion and feelings without doing any sort of fact finding or analysis. That holds true not only for financial matters but seems to be a common way to make all sorts of decisions. The outcomes are often very poor. Whether or not they are happy behaving that way is not something I could decide. Some people just don't seem to know any better or have the training and habits needed for rational decisions.
As to the outcomes, I will let you decide. I took a mortgage when I had the cash to pay for a house. I also had the cash for an emergency fund and for a comfortable retirement based on social security and investments. I borrowed $350K. Over the past 6 years the investments on that money I borrowed have paid for the mortgage payments and yielded an additional $100K. Now I have an extra $450K invested and that just keeps growing and compounded. In another say 15 years, that $450K will have grown to close to a million and I will be $650K ahead. Do you find that to be a significant amount or just "wringing every last nickel"?
It’s never an outright declaration. It’s implied often. People do just fine not following the perfect path according to some. Terms like smarter, lack of knowledgeable on and on pop up. Paying the mortgage off, driving a nice car or even eating out shouldn’t make people dumb. It’s implied a lot. This forum would be so much nicer without all the grandstanding.
The OP was correct. He could get. 4.4% or whatever return. Maybe that money was in a savings, he had it in the wrong investment or a million other things that could make that his best move. Instead, it’s impled he could be smarter or gain more knowledge. Maybe in your world but not his. Can’t we let other ideas exist without always making them out to be “less smart”? People’s financial lives and temperament are complicated. My smart doesn’t have to be your dumb. And smart for you is necessarily smart for me.
Perhaps share ideas and suggestions without judgement?
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