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We paid off our house in 2008, sold it in 2013. Socked away our equity in CD's. Now we rent. Are we considered "mortgage free" We are totally debt free except this rent. Looking to buy a home with cash, but this market is too hot. Thank You. By the way, I'm retired.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Most people think of "mortgage free" as owning your home "free and clear." It seems like in your interpretation, someone who never owned a house would be mortgage free. You could call yourself debt-free. We are planning what you did in 3-4 years, and in our case the equity even now is enough to buy a great place for cash, but in a less expensive area 1-2 hours away. If we stay here, even a 1 BR condo would require a small mortgage since they are now pushing $600k.
Technically, I guess a renter could call themselves "mortgage-free," --- but, it's kind of like someone with a truck loan, saying they don't have a car payment.
I would say, if you have enough money to purchase a home that you would really like to live in, in an area that you would really like to live in. AND have enough extra money in cash or from pensions & SS to keep you comfortable in that home in retirement for the foreseeable future, then I would say from a retired person's perspective you are "Living" mortgage free.
If you would have to go back to work, then I would say no.
Does the CD interest cover your rent? Probably not. But if that was the case, I could see how you might be considered "mortgage free."
Some on this forum have put the proceeds from a house sale in the stock market and have since bought another home but carry a mortgage. They have done well based on good stock market returns and the mortgage tax break (combined with property tax, state tax, and charitable deductions that have allowed their deductions to far exceed the standard deduction). But I'm risk averse so would not be brave enough to put all or most of those funds in equities.
housing costs are a fact of life as long as we live . having debt is a different issue . our housing costs are expenses-period and likely over a lifetime eclipse any residual value of a home . in either case , rent or buy you will be negative . just paying off a mortgage can be 2 to 3x the price of the house .
the only question is which will cost less in your case .
I was going to say a person who rents, but heck, you are right.
You currently do not have a mortgage. You are debt free because you do not own money to anyone.
You are not mortgage free. Mortgage free is a person who owns a house that is paid off. You do not. Not anymore.
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