Musings about paying off mortgage early

[flyingsaucermom]

Originally Posted by Mattks

That's true, but the people on this forum (hopefully) want to get the best bang for their buck on investing and saving. We are on here because we are passionate about the subject at hand. I would argue that paying off a mortgage early or investing are all good, as long as people don't let the money just sit in bank accounts losing value. Not everything that is good is equal, some good ideas are just good, and some are great ideas. But, in the end, most of the people in this thread are better off then the average person.

Absolutely.

Honestly, my best asset isn't my house, but my husband's brain... it's allowing him to get an incredible offer abroad and I'm treating it like I would this discussion. We can stay here in our current situation.. it's pretty good, we know what to expect OR we can accept risk and the unknown and harness a much greater earning potential. Yes, we acted conservatively and paid off the house... but now would be the time we take risk and we go for the high-earning job.

[jrkliny]

Originally Posted by dmills

Considering the median networth and average savings rate for most Americans, this whole conversation is a moot point. .......

I believe ignorance is one of the main reasons many Americans don't do well financially. No schools teach anything about managing money, budgets, mortgages, debt and credit cards, investments, taxes or anything else of a practical financial nature. People make decisions based on misconceptions and feelings as much as anything else.


Even worse no one teaches the skills people need to succeed in the workplace. And I am not talking about the technical skills, but interpersonal skills and how to function in the workplace, how to find jobs that will help build skills and a career.

[johnd393]

My adjustable rate mortgage went up 1/4% each of the last 2 years. 3.25% now. I'm always put off by the up front costs of a refi. It feel like there's money I can't spend that has to be held in reserve to pay down the mortgage if the rate goes too high for comfort. I'm looking into a refi again. I really don't want an appraiser going through the house.
A mortgage frees up more cash now. The way our retirement is working out, there will be more money available to pay down the mortgage a few years later.

[oregonwoodsmoke]

Originally Posted by Mr. Zero

....... a 3.5% 30-year, fixed-rate mortgage, and make extra payments to try to pay it off in 20 years. At around 10 years into the mortgage, CD/bond/savings account rates are at 5%. Do you still make extra payments on the mortgage or do you start diverting those extra payments?.......

Maybe. 5% on a passbook savings account or a money market account, and maybe some money would be diverted into saving. 5% on bonds or CD's it would depend upon how long the money would be tied up. My house is protected from inflation. A CD or bond is not. If CD's have gone from 1.5% to 5% in 10 years, how is inflation looking at the time? I don't want money tied up at a fixed rate for too long in an inflationary period.

Also, if CD's have gone up to 5%, mortgages are probably 7-8%, and I'm loving the fixed rate 3.5% mortgage. I'm paying back that mortgage with cheaper money. Happy, for sure. Plus, even better, now that there is higher inflation, my house is worth considerably more than I paid for it. With the disclaimer that I don't live in Detroit where prices may never go up again.