Never Owning Last House (move, state, friend, years)
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I just refinanced with cash out to get completely out of other debt (have been quite careless). My new mortgage will be 2.99 !! and 30 years of payments. I only want enough equity to be able to get out okay if I need to move or sell. If I had to do it tomorrow, I'd get about 200k from equity.
I didn't see any reason to knock myself out to pay it off. I need to leave no estate (am leaving all to the animal shelter) and will have enough fixed income to make the payments regardless.
Of course, I have to grow up and not run up debt but paying off what I have should work really well. I live quietly and will have enough money aside from the mortgage to do what things I want (like eat out, ride horses). No interest in travel or "stuff." I donate a fair amount also.
Has anyone else decided that owning one's abode isn't the necessary way to go?
I have a friend who refinanced a couple of years ago to carry a small mortgage. She wanted to have some liquid cash available for emergencies. She is the youngest of 3 siblings and considering their health status, she will be the last one left. None of them had kids.
If you average 8% on investments and pay 3% on a mortgage then you are still clearing 5%. Plus you still gain by appreciation in good times and will often get a tax deduction on your interest. So heck yes a mortgage makes sense some times.
Not investing but paying off debt. I will certainly get a deduction on interest. I'd just rather be free of my ill-gotten debt than limp along paying it off for two years, which is the alternative.
If you average 8% on investments and pay 3% on a mortgage then you are still clearing 5%. Plus you still gain by appreciation in good times and will often get a tax deduction on your interest. So heck yes a mortgage makes sense some times.
Since the income tax changes a couple of years ago, you now need to have quite a bit of real estate tax and mortgage interest to use itemized deductions. (SALT) If those deductions are only a few thousand, the standard deduction works out better.
Since the income tax changes a couple of years ago, you now need to have quite a bit of real estate tax and mortgage interest to use itemized deductions. (SALT) If those deductions are only a few thousand, the standard deduction works out better.
Has anyone else decided that owning one's abode isn't the necessary way to go?
I'm just the opposite. I own 4 homes. 2 of them I have never lived in. 2 of them are paid off. The other 2 will be paid off in 10-12 years. At some point I will sell at least 2 of them and use that money to finance my leisure time. I wish I had been more aggressive when I was younger regarding real estate holdings. But my ex wasn't on the same page as me regarding investments.
I'm sure I could have maximized my ROI by doing something different but I sleep good knowing that I can manage my current debt via rental payments.
Can't believe these rates! When I bought my first property in 1989, it was 10 percent and that wasn't too bad!
My first mortgage was 16% in 1982. 2nd mortgage in 1988 was 8.99%. If only I had a crystal ball.
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