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Old 09-26-2018, 05:15 PM
 
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Just make sure it's a house you like enough to want to stay in even when you retire. Our house is paid off, but I really wish we'd bought a little more expensive and bigger and newer house at the time we bought. Now housing prices have increased and even though our house could sell for at least four times what we paid for it, we'd need to add more money to that to get what we want.
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Old 09-26-2018, 07:14 PM
 
1,495 posts, read 418,704 times
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Quote:
Originally Posted by Lastfire View Post
We took 30 yr mortgages on three houses at various times of our many moves. We paid each one off ahead of schedule. On one house, we took a five year mortgage and really applied the $$. Paid it off. Paid full cash price for one house. We have always kept our real estate purchases well below our "abilities" level. We have never lost money on any of our house purchases. Some we sold ourselves. We still managed to put three children through engineering masters programs and saved for retirement. We lived well but have never been big spenders. We were not trying to be frugal but truly enjoy the simple things of life.....which are usually free. We knew we would move many times and always looked for the small house in the absolutely best school district. Worked for us.
This was our story too. Bought the cheapest house in the best school district in our first year of marriage with an 11% mortgage. Sold it eight years later for thrice what we paid. Replaced it, keeping the same mortgage payment and paid it off before paying college for the kids. After so many years living simply and saving we retired at ages 57 and 62. Next year we begin his social security at age 70 and my teacher pension.
We feel grateful that it all worked out.
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Old 09-26-2018, 07:44 PM
 
Location: New Mexico
6,666 posts, read 3,710,960 times
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We paid it off fairly early and then used a home equity loc to cover college expenses and later for buying a 1/2 acre building lot. It was paid off when finally sold a couple years later. I carry a small mortgage on my current house but could easily pay it off if I needed to. There’s still a little tax benefit for interest paid.
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Old 09-27-2018, 08:16 AM
 
Location: Loudon, TN
5,837 posts, read 4,874,513 times
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It looks like it comes down to different strokes for different folks. I'm enjoying the many different takes on this topic.
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Old 09-27-2018, 08:27 AM
 
Location: Tennessee
23,739 posts, read 17,687,620 times
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Quote:
Originally Posted by Jstarling View Post
This was our story too. Bought the cheapest house in the best school district in our first year of marriage with an 11% mortgage. Sold it eight years later for thrice what we paid. Replaced it, keeping the same mortgage payment and paid it off before paying college for the kids. After so many years living simply and saving we retired at ages 57 and 62. Next year we begin his social security at age 70 and my teacher pension.
We feel grateful that it all worked out.
For this to work, you really need to have some significant appreciation probability. I'm not that old. The county schools were pretty good when I was growing up. They're bad today. Property appreciation rates are basically waffling around the inflation. Values are falling in the rural areas.
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Old 09-27-2018, 09:18 AM
 
825 posts, read 568,154 times
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Quote:
Originally Posted by Serious Conversation View Post
For this to work, you really need to have some significant appreciation probability. I'm not that old. The county schools were pretty good when I was growing up. They're bad today. Property appreciation rates are basically waffling around the inflation. Values are falling in the rural areas.
Then why stay in the "rural areas"? If you feel that you might have something great to contribute, get out to the Bay Area or Seattle or NYC or Boston or similar and allow all the possibilities of life to multiply exponentially for you. Real estate appreciation is just one of many benefits to living in a dynamic, productive area.

If you're living in a stunted area, then all your opportunities (cultural, career, financial, romantic) will be stunted as well. Yes, you will lose frequent family contact, but you can always visit of a couple times a year, and have loved ones come visit you in your exciting new home.
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Old 07-23-2019, 02:21 PM
 
Location: Northern Wisconsin
8,877 posts, read 7,752,067 times
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No, we moved several times, took a big loss on one house because of the 80's recession, so we didn't pay it off till our mid 50's. It really cramped our retirement savings.
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Old 07-24-2019, 10:53 AM
 
Location: Tennessee
23,739 posts, read 17,687,620 times
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Quote:
Originally Posted by josie13 View Post
Then why stay in the "rural areas"? If you feel that you might have something great to contribute, get out to the Bay Area or Seattle or NYC or Boston or similar and allow all the possibilities of life to multiply exponentially for you. Real estate appreciation is just one of many benefits to living in a dynamic, productive area.

If you're living in a stunted area, then all your opportunities (cultural, career, financial, romantic) will be stunted as well. Yes, you will lose frequent family contact, but you can always visit of a couple times a year, and have loved ones come visit you in your exciting new home.
This is old, but someone bumped the thread, so I'll bite.

The problem is the cost of living in those kinds of places is astronomical. The housing costs would likely more than eat up any gains I'd make in come.

I used to work for the Indianapolis satellite office of a metro Boston-based tech company. The COLA between Indy and Boston was only 30%. That wasn't nearly enough to make up for the difference in cost of living.
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Old 07-24-2019, 11:08 AM
 
Location: Exeter, NH
5,303 posts, read 4,413,636 times
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We paid off our mortgage at around age 30, & it was the smartest move we made. It was pretty hard watching one entire paycheck go to such a non-tangible benefit, but it allowed us to save a fortune in interest payments, and to trade our home in an expensive Yuppie area for an incredible riverfront estate in a low-cost retirement haven.
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Old 07-24-2019, 11:10 AM
 
285 posts, read 47,640 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?
Very few financial advisors (or anyone who passed 8th grade math) would recommend a 29 year old paying off a sub 4% mortgage. There are almost no scenarios which would present a higher net future value doing that versus sticking that money used to pay down the mortgage into something like an S&P500 index fund (after fully contributing to Roth IRAs and matched amounts at work).
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