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Old 12-06-2009, 08:04 PM
 
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We plan to sell our home and downsize this summer.

I would love thoughts on paying cash for our retirement home and having no mortgage or using that money for adding to investments.

I am leaning towards having the house paid off.
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Old 12-06-2009, 09:27 PM
 
Location: Sacramento
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Can't see much to disagree with here, unless you have substantial guaranteed income via an annuity or defined benefit pension.

Investment income to pay the mortgage doesn't seem like a gain to me.
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Old 12-07-2009, 12:00 AM
 
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Read this thread. It will give you some warnings about the risks of investing in retirement communities that are on the verge of bankruptcy, just in case you're considering that route.

Active Adult - very large down payment???
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Old 12-07-2009, 02:57 AM
 
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we recently had to make that decision and while long term there is no question i would have done many times better taking the mortgage and investing elsewhere we opted to pay cash. it was very tempting to take a mortgage at these historically low rates. but i dont look at the 2 as if they were the same or interchangeable.. my home is my home and where i invest is a different mindset.

the rules of the game changed as we got closer to retiring: for us its no longer about growing richer,its about not growing poorer. WE ALREADY WON THE GAME SO WHY KEEP PLAYING. we made it to the point of being able to pull the plug on working. . its now about putting as much as we can in our financial lives not only on auto-pilot but only taking just enough risk to meet our income goals and to keep risk as low as we can to meet those goals.

owning our home outright is such a comforting feeling when you enter retirement with one of the biggest costs out of the way and off the radar...

its just making it easier for me not to fear giving up the old paycheck.

while its only a psycological feeling i find that feeling of owning my home outright priceless.

people also need that extra discipline to invest that money and not spend it , as well as having the stomach to tolerate the markets themselves.

everyone thinks they have a high tolerance for risk until the downturns..

just make sure you dont leave yourself house rich and cash poor either. that makes for a pretty miserable retirement too

Last edited by mathjak107; 12-07-2009 at 04:04 AM..
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Old 12-07-2009, 05:23 AM
 
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mathjak107 said it best as I never thought of it that way.... already played the game and won...so why keep playing....pride!

That's my guess. So many keep playing for that reason, and other reasons I'm sure.


Owning a home outright is one of the best feelings in the world. Not having a bank own it with the illusion of me owning it- that's the American joke, not the American dream.
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Old 12-07-2009, 05:52 AM
 
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Almost five years ago I took about half of my liquid investments out and bought a house outright, i.e., no mortgage. The other half of my investments have now risen to a level above where I was, but then I was adding in new money on a regular basis.

Owning the house with NO mortgage is a great feeling, but a wise financial decision too I believe. It equates to a monthly income level that I could not have received from dividend payments on that money if I had left it invested.
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Old 12-07-2009, 07:20 AM
 
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I am 71, am in middlin' health and living on retirement income. I rented all my life, and then when I moved to Europe in 2000 I bought a house with cash. I have moved several times, and each time I paid cash.

I consider having my home completely mine as one of the most important things in my life...the psychological reassurance that ownership of my home provides at my age is incalculable. And since I did not pay an inflated price for it, it remains a reasonable investment.

Since I live rather modestly, by choice not necessity, I continue to be able to put money in the bank.
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Old 12-07-2009, 07:47 AM
 
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We paid cash for our home and, as other posters have stated, there's nothing like the feeling of owning your house outright. When you pay cash for your home there's no danger of being upside down on your mortgage. I feel sorry for people whose mortgage loan is more than what their house is worth. I guess there's really no right answer but paying cash worked for us.
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Old 12-07-2009, 09:17 AM
 
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I'd like to pay cash for our dream home in the La Crescenta area but prices are still hovering in the 800-1.2k range there, even in this downturn. What is it about the Glendale/LaCrescenta/LaCanada area that keeps prices so &*^% high on these otherwise ordinary-looking 3+2's????? And why are people still crazy enough to pay these kinds of prices???
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Old 12-07-2009, 10:25 AM
 
Location: Planet Eaarth
8,955 posts, read 17,725,611 times
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Quote:
Originally Posted by kelly237 View Post
We plan to sell our home and downsize this summer.

I would love thoughts on paying cash for our retirement home and having no mortgage or using that money for adding to investments.

I am leaning towards having the house paid off.
While being "debt free" is old line thinking is still is the only path to true freedom from bondage to others. I think that a good thing for retired folk's.
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