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Old 09-20-2018, 11:05 AM
 
Location: Asheville NC
1,603 posts, read 1,313,958 times
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Our home was paid for about 15 years before we retired. At first we had a very high interest rate, but when rates came down we refinanced to a much lower 15 Yr mortgage. After it was paid off, we were able to save more, remodel, keep the home up to date, and take care of any needed maintenance. It appreciated quite a bit and was very easy to sell. We never thought of our home as an investment, but as our place to live, and enjoy.
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Old 09-20-2018, 11:47 AM
 
1,836 posts, read 788,155 times
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Quote:
Originally Posted by Serious Conversation View Post
I just turned 29 and am looking at buying my first home over the next year. I work in Indianapolis but don't want to live in the inner city. I'm looking at reasonably priced condos and small SFHs in the better parts of the city and suburbs and am finding quite a bit I can afford, but I can go to small towns outside of Indy and probably save considerable amounts of money. I'm currently renting a 2BR and with rent, water/sewer, and electric, I'm up to $1,000/month. It's a decently kept but very dated apartment, and it's money down the drain. There are smokers/animals beside me and I want neither, and I want something on one level, with a basement possibly for optional use. There is a possibility of me getting married but can't foresee any kids.

I have been thinking of buying with a small mortgage ($50k-$110k or so) and trying to pay it off as fast as possible (hopefully by 40-45). This would give me the ability to be completely debt free for ten to twenty years prior to retirement, and to contribute a considerable amount.

Did you pay off a mortgage early and find it helpful or that the money was better allocated elsewhere? Even if it was better allocated elsewhere, did you find the peace of mind of being debt free worth it?
Yes, we paid off our mortgage in our mid 30's and every house since then we bought in cash. Very helpful, that and not having kids. When your mortgage is paid off put that money away, don't spend it and you will have a nice retirement account to enjoy.
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Old 09-20-2018, 12:17 PM
 
Location: RVA
2,167 posts, read 1,266,787 times
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Also, it depends on what cost the house is. I bought a rental for $140k with just enough down to not have PMI. The mortgage is way less than the rent. Easy decision. The mortgage requirements and rates were higher for a rental though. If your paid off home cost $200k, well, maybe on a $40k income that is a big deal. On a $200k salary thats nothing. (Not that I have a salary that size!) I’m not a snob, but I haven’t work my career to choose to live in a $200k house in my area for the rest of my consciously enjoyable life. I COULD if I had to, but I don’t want to. I want less work, more amenities, more comfort etc. so $5-600k fits the bill for my lifestyle. But I’ve know more than a few people with millions that live modestly. Their wants are not my wants. Their objectives are not mine. Neither is wrong.
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Old 09-20-2018, 01:51 PM
 
Location: NYC
2,910 posts, read 1,589,162 times
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No, I worked in a field, by choice, that involved relocating every few years in order to advance, plus I wanted to see the country for a bit while I was young & single. When I was finally more mature I hit a real bad spell & couldn't buy until I was 50yo. At that point I got a 15 year mortgage & retired when it was paid.
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Old 09-21-2018, 04:04 AM
 
Location: R.I.
979 posts, read 606,070 times
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Quote:
Originally Posted by Serious Conversation View Post
Did you pay off a mortgage early and find it helpful or that the money was better allocated elsewhere? Even if it was better allocated elsewhere, did you find the peace of mind of being debt free worth it?

I have been a same home owner since 1990 and been mortgage free since I was 41 and am currently age 61. Not having a mortgage initially was very helpful for me to be able to remain in my home following my husband's death which happened 3 years after our mortgage was paid off. But with the continual rise of all my other home ownership expenses over the last 20 years my ability to remain in my home along with saving for retirement had very little to do with not having a mortgage it had to do with my steadily rising income. And if I want to remain in my mortgage free home in retirement and cover all my home ownership expenses that will continually rise I need to have sufficient retirement income to make that happen. And it is having that sufficient retirement income to cover all my expenses in retirement whether I choose to remain in my home or decide to sell and become a renter is what will give me peace of mind because nobody is ever truly debt free because it costs money to live.
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Old 09-21-2018, 04:32 AM
 
71,593 posts, read 71,751,865 times
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it won't let me rep you again nightengale .

that is a point i raise over and over .

cost cutting and more income generation are not the same thing . they only appear to be the same as both can improve cash flow . but cost cutting has a bottom .

once that bottom is hit , if expenses keep rising and there is nothing left to cut then you learn the difference between assets that can cut costs and assets that can increase income . ideally you need both . but far to many end up house rich and investment poor or investment "light " . because they shy away from investing , or start to late in life because they channeled to much in extra payments in to their house vs income growing assets . once you loose time investing , you make your results much more dependent on a shorter period of time .

that rarely ends well in investing ..

Last edited by mathjak107; 09-21-2018 at 04:52 AM..
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Old 09-21-2018, 06:29 AM
 
1,289 posts, read 290,719 times
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My retirement plan is predicated on paying off my mortgage, so I put a sizable portion of my income towards that goal. It takes some discipline, and of course I have less expendable income, but learning to adapt and thrive in those conditions is great practice for actual retirement living.

I understand the pros and cons, and this is the path for me.
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Old 09-21-2018, 06:42 AM
 
71,593 posts, read 71,751,865 times
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i look at those in the tristate area who have rushed in their day to pay off homes that were 30-35k in the 1970's . today taxes are 10-15k easily . those paid off mortgages add zero to affordability here and those dollars saved do not even represent a summer utility bill .

they learned a lesson to late about the differences between cutting costs vs growing an income . many can't even stay here as planned .
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Old 09-21-2018, 07:01 AM
 
1,289 posts, read 290,719 times
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Quote:
Originally Posted by mathjak107 View Post
i look at those in the tristate area who have rushed in their day to pay off homes that were 30-35k in the 1970's . today taxes are 10-15k easily . those paid off mortgages add zero to affordability here and those dollars saved do not even represent a summer utility bill .

they learned a lesson to late about the differences between cutting costs vs growing an income . many can't even stay here as planned .
Sure. But I'm glad I don't have to stress over growing an income in order to afford ever-increasing taxes, some of which go to pay for other peoples' retirements. I understand people love where they live and it's sad some are unable to stay.

I suppose another facet of my retirement plan is to find that balance between LCOL and cultural amenities.
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Old 09-23-2018, 09:18 AM
 
2,038 posts, read 1,948,524 times
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IMHO the best plan is to have a paid off house AND a healthy investment portfolio.
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