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Old 08-08-2017, 11:23 AM
 
Location: Pennsylvania
12,563 posts, read 4,250,967 times
Reputation: 9898

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Quote:
Originally Posted by NewbieHere View Post
Even if your mortgage is paid off, you can still lose your house. If you don't have enough money to pay property tax, if you owe HOA money, they can still auction your house off. This happened during the housing burst.
I hear your point, but you're still better off not having the darn thing, in most cases.
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Old 08-08-2017, 11:26 AM
 
Location: SoCal
13,294 posts, read 6,369,679 times
Reputation: 9932
Quote:
Originally Posted by BeerGeek40 View Post
I hear your point, but you're still better off not having the darn thing, in most cases.
Better off for what? If your income and pension can cover your mortgage, then I would argue, you are better off with it. I have no problem sleeping at night. I still have a mortgage.
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Old 08-08-2017, 11:28 AM
 
Location: Pennsylvania
12,563 posts, read 4,250,967 times
Reputation: 9898
Quote:
Originally Posted by NewbieHere View Post
Better off for what? If your income and pension can cover your mortgage, then I would argue, you are better off with it. I have no problem sleeping at night. I still have a mortgage.
You seemed to have missed my point about the conflicts of interest in your advisor's recommendation to keep the mortgage.


I have no problem sleeping at all, being that my mortgage was paid off at 45 and I'll never have another one.
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Old 08-08-2017, 11:49 AM
 
Location: SoCal
13,294 posts, read 6,369,679 times
Reputation: 9932
Quote:
Originally Posted by BeerGeek40 View Post
You seemed to have missed my point about the conflicts of interest in your advisor's recommendation to keep the mortgage.


I have no problem sleeping at all, being that my mortgage was paid off at 45 and I'll never have another one.
No I didn't miss it, I disagree with your point. I see no conflict. I would make the same recommendation if somebody asks me.
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Old 08-08-2017, 12:44 PM
 
71,798 posts, read 71,896,917 times
Reputation: 49350
i see nothing wrong with having liquidity in retirement via a mortgage vs tying up EXTRA money in a house that has to cost you money to get at it . when times are tough it may not be easy to get at that money in the house.

you need to meet the same income requirements today for a heloc as a first mortgage. in retirement that is not easy ..
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Old 08-08-2017, 02:37 PM
 
Location: Central Massachusetts
4,800 posts, read 4,856,396 times
Reputation: 6379
Quote:
Originally Posted by Gusano View Post
I understood what the advisor was suggesting, but I still don't see the benefit of the special account. Leave the money invested where it is and just draw money from it for the mortgage. I'm just thinking there is some benefit to the advisor here with the extra account. An extra, separate account really is unnecessary, unless there is a guaranteed interest rate that would make it worthwhile, which would surprise me. Maybe it's a question of which type of risk a person is willing to tolerate.
that would be the point exactly. If you read what I said. I believe that the FA was talking about an account that would contain CD or bond funds. The interest would not be gang busters but it would be steady. The account could hold just under or over the remaining mortgage. This would take home mortgage risk off the table.

I have no idea who the FA is and what company but as long as it is just the mortgage amount and a risk free account and not an annuity that has other catches to it I believe the advisor does have a great idea and point. As you said if it didn't come as I just described you would be right that there is no value. I also would not be adverse that the FA make some money in the deal either. Just as long as I didn't get raped in the process.
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Old 08-08-2017, 04:03 PM
 
644 posts, read 533,292 times
Reputation: 891
Quote:
Originally Posted by TuborgP View Post
There is probably a difference in retiring with a existing mortgage and using investments to pay the balance off while staying in place v transplanting on retirement and selling your existing homes proceeds to pay cash for new one. That is a clear choice. Invest the proceeds or pay cash for the new one. We elected to pay cash.
Us, we sold and transplanted to our already paid off resort investment property. Walked away with a lot of cash. Worked out well for us, nothing fancy.

Last edited by lovnova; 08-08-2017 at 05:07 PM..
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Old 08-09-2017, 12:21 PM
 
Location: RVA
2,172 posts, read 1,271,519 times
Reputation: 4492
Quote:
Originally Posted by ukrkoz View Post
OP, we are about same age, except that I am no related to militaries.
I shall (plan, at least) to retire at legal age for full benefit, that will be 66.5.
Though I do not have a "nice egg" because of the late start in the country, I shall liquidate my IRAs as of the 2nd week of January and dump it all into current mortgage. With final goal to kill it completely by the time I retire.
Small amount you have I'd have killed right away, without any plans shmans. Just kill the sucker. You save by saving interest you pay and you gain by natural property value growth. What is likely much higher return than what you have from you egg anyway.
Unless you are in some sort of magic know how on investing and have very good vesting into your retirement plan ( I do not) then you likely have piddly return on it, as chaotic as investments are as it is.
All I know is our properties GROW in value like on yest and investments can't climb out of red in years. So forget investments.
There is so much bad advice in this post, I cringe. So first off, "natural property growth" (which is never guaranteed and which you have no control over) occurs whether you have a mortgage or not. So it is a non-entity in the equation. Liquidate your IRAs before age 59.5 and pay a 10% tax penalty to pay off a mortgage is just plain ignorant. Paying someone else interest is also a non entity. If you have no mortgage and none invested, you are making nothing. If you have a mortgage, where you pay $12000 a year in (deductible) interest, but the money that was not used to "kill the sucker" earns $13000/yr, then of the two people with the same NW, the one with the mortgage is ahead, regardless of paying someone else. And that doesn't include the gains from the tax deductions, or the improved credit rating (paying cash for a house does zero for a credit rating). Plans shmans? Go through life without any financial plans and watch yourself fall behind everyone with a financial plan.

Last edited by Perryinva; 08-09-2017 at 12:33 PM..
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Old 08-09-2017, 12:32 PM
 
71,798 posts, read 71,896,917 times
Reputation: 49350
Quote:
Originally Posted by ukrkoz View Post
OP, we are about same age, except that I am no related to militaries.
I shall (plan, at least) to retire at legal age for full benefit, that will be 66.5.
Though I do not have a "nice egg" because of the late start in the country, I shall liquidate my IRAs as of the 2nd week of January and dump it all into current mortgage. With final goal to kill it completely by the time I retire.
Small amount you have I'd have killed right away, without any plans shmans. Just kill the sucker. You save by saving interest you pay and you gain by natural property value growth. What is likely much higher return than what you have from you egg anyway.
Unless you are in some sort of magic know how on investing and have very good vesting into your retirement plan ( I do not) then you likely have piddly return on it, as chaotic as investments are as it is.
All I know is our properties GROW in value like on yest and investments can't climb out of red in years. So forget investments.
GOT TO AGREE WITH PERRY. not good advice at all. it may be your idea of a good plan but as general advice i think it is poor
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Old 08-09-2017, 12:32 PM
 
Location: RVA
2,172 posts, read 1,271,519 times
Reputation: 4492
Quote:
Originally Posted by BabyJuly View Post
WOW! Those are some high taxes! Which states are in this tristate area? Here I was complaining of paying less than 4K a year in my high COL area (The DMV area). If you have no need to live in the tristate, with tough winters, it makes a strong case for moving to a lower COL area and/or downsizing.
My cousins in Westchester County pay $1-2k/mo in property taxes on their homes. Since that is what everyone around them is paying, it seems normal. Their homes are smaller older and have more upkeep than mine and I pay $400/mo. But mine is worth half to a third what theirs is. They think that is hilarious. They would never move, though.
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