Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We wanted to do 15 year mortgage but I was afraid if one of us was to lose our job & we had more financial expense then making that monthly payment will be cutting it close. I did not want to take the risk and force us in a situation where we are financially struggling because of our ambition. so we took 20 year mortgage, yes that 5 year did make difference. I should have done 30 years but I needed a motivation to pay off faster. We still make extra 200 payment every month on our 20 year mortgage. Hope to pay it off as soon as possible.
I heard if you pay an extra payment a month every year, you reduce the length of your mortgage by like 6 years? So a 30-year would become like 24 years?
I guess I should play around with a amortization schedule/calculator to see how many payments I'd need to make to pay off a 30-year mortgage in 15 years.
It's different for everyone. A lot is based on your interest rate. Also are you only paying the mortgage portion of the payment or the full amount including escrow. Depending on your location, those numbers can be drastically different. Where I live, my escrow is almost as much as my principle and interest.
My statement was in regards to those who think or say it is better to invest the "extra" into retirement rather than to pay off the house, whether or not the house is/going to be paid off before going into retirement. Their idea is to grow the retirement accounts and keep the mortgage payment.
That means they MAY still have a mortgage, but will also have a higher retirement account when they reach retirement. It can also mean their retirement accounts MAY be able to pay off the house when they retire.
Sure, everyone should be mortgage free by retirement, but some still think it better to carry a mortgage.
I may have seemed to have misunderstood, but in fact this is a very difficult decision with many complex factors. There is no correct solution since there are too many variables, since people have different circumstances, and because it's impossible to predict the future without making assumptions which may turn out to not be correct.
For example, in my case I had stuffed away as much money as possible, in my IRA, in my savings. I ended up losing my last job in a depression and was unable to find work, and finally opted to take early Social Security at 62. I never planned on that, I had intended to work until 65. In any case it all worked out for the best, my SS is just enough to cover my basic living costs, and I'm well situated in my IRA and my after tax savings.
I'll be fine as long as I don't end up in assisted living at an early age. I'm doing everything I can to keep up my health and I expect I'll be hale and hearty until my final days, and run out of life before I run out of money. But I hope I don't leave too much money unspent!
Quote:
Originally Posted by mcwick
Yeah, I would like to have a new car and take expensive vacations, but I like not having car payments and debt even more!
we bought a house a couple of years ago that we were able to comfortably afford. recently we had a financial windfall and decided to pay off our entire mortgage. feels absolutely wonderful not to see that money (half of it interest) fly out every month.
The money you paid it off with today is worth quite a bit more than the same number of dollars in the future.
Mortgage free is not financially clever, it leaves you exposed to liability that a mortgage can protect against, banks will be better equipped to protect an unpaid mortgage than the average owner.
If my house was paid off, first thing I'd do is put another mortgage on it asap.
Theres a lot of advice on these boards that sounds like "poor mans thinking."
The money you paid it off with today is worth quite a bit more than the same number of dollars in the future.
Mortgage free is not financially clever, it leaves you exposed to liability that a mortgage can protect against, banks will be better equipped to protect an unpaid mortgage than the average owner.
If my house was paid off, first thing I'd do is put another mortgage on it asap.
Theres a lot of advice on these boards that sounds like "poor mans thinking."
I bought a condo at a time when the HOA was under litigation with the builder, which meant few lenders were willing to do mortgages in the community at the time. If you weren't a cash buyer, you'd have to go through a special lender that is willing to take more risk, at the cost of a higher interest rate and maybe additional fees.
I did some checking and found out what the litigation issues were and I found them to not be major. Also, my unit was not impacted by most of the issues.
In my case, during a time when the interest rate was just under 4%, I pursued financing thru one of the special lenders and secured a mortgage at 4.65% interest.
The reason I felt it was worth it was because it's in a location with a shortage of housing and high demand. The location is desirable as one of California's best family towns with very good schools.
Homes here go for a premium, so do apartments. It's also walking distance to shopping and one of the
biggest employers in the region, so I don't think there would be a problem renting it out either.
It's been 16 months since I bought and the value has gone up $70K, as witnessed by two other units like it that recently sold for $315K and $320K. I paid $245K.
If I want to refinance at a better interest rate (even if the interest rate is only 0.5% less), partly to take out the 20% down I had to put in (about $50K), would it be worth doing? I'd likely end up having to pay a PMI until 80% Loan-to-Value, so I wonder if it's worth it. I'm not sure where would be better to park the money and invest it if I did have it though, but I was thinking I could use it to buy a house and then rent out the condo.
The money you paid it off with today is worth quite a bit more than the same number of dollars in the future.
Mortgage free is not financially clever, it leaves you exposed to liability that a mortgage can protect against, banks will be better equipped to protect an unpaid mortgage than the average owner.
If my house was paid off, first thing I'd do is put another mortgage on it asap.
Theres a lot of advice on these boards that sounds like "poor mans thinking."
My dad was old-fashioned and didnt believe in paying interest on anything. He did buy a home at the Jersey shore on the water for $1,500 - a loan. But he paid it off quickly. It sold many years later for $875,000.
He and his brother built the beautiful English Tudor home i grew up in. He borrowed money for some of the products, and had to pay a brick-layer and plumber - but they did most of the rest of the work. He always bought a used car with cash. Never inherited any money - nor were any family members born into it.
My parents owned two homes, one car, and a small travel trailer. My mother never worked outside the home, raised us three children, and took care of the finances and bills. We also took at least two long vacations each year, along with the whole Summer at the Jersey shore - on one salary, my dad's DuPont's pay - which i believe was about 50 cents an hour when he started. Of course it grew thruout the years. The good ol' days!
But there might be something said for never paying any interest
(No, he wasnt "rich" - I guess. But he had money to invest, and also had stock.)
Wasn't HARP for people with low equity? How did you still have such low equity if you had the same house and had been paying since 1992?
Quite the opposite. HAMP is for low equity, HARP actually for high equity people who are "land rich, cash poor." Except while I'm not exceptionally rich I'm not poor either.
Quite the opposite. HAMP is for low equity, HARP actually for high equity people who are "land rich, cash poor." Except while I'm not exceptionally rich I'm not poor either.
Nothing to do with personal equity, I was referring to equity in your home. HARP is for LTV of 80% or more. You were paying on a mortgage since 1992 but still had less than 20% equity in the house?
Quote:
Your current loan-to-value (LTV) ratio must be greater than 80%. Calculate your LTV ratio with this tool.
Nothing to do with personal equity, I was referring to equity in your home. HARP is for LTV of 80% or more. You were paying on a mortgage since 1992 but still had less than 20% equity in the house?
My LTV was about 18%. I was never asked about the value of the property. My LTV is now under 7%. I see now that technically I was ineligible but the postcard inviting me to join the HARP program was unconditional, "just call this 1-800 number."
We underbought and have a 15 year mortgage with 11 years left. Looking forward to no mortgage.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
