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I retired in 2019 with 7 years left on my mortgage. However, for less than $900 for principal, taxes, interest, and insurance, it is much cheaper than renting.
I will be 72 when it is paid off. I have a pension and SS totaling $5k a month without touching my IRAs. It isn't a big deal. But I do close my ears when someone suggests moving! A paid-for house is my dream!
Paid off well before retiring. It is a great feeling not to owe anybody anything. Our cars are old( '05 and '09) but in great condition(low miles) and we can pay cash if we needed to replace them.
No.
I may be tempted to get a mortgage if I bought another home, but then when I consider the incredible and unnecessary expenses mortgage companies charge, I don't think I would do it.
Just use money from house A to pay for house B.
After a certain age all this blather about earning more money here or there just doesn't interest me.
I paid off three properties but this last time I decided to keep a small mortgage that is less per month than rent on a single bedroom apartment. I'll probably stay that way for a few more years.
Yes and no. We paid off our primary, twice... we just bought a third property... we alternate between calling it a "property", "farm" and "guest house". It's suitable for farm animals and/or a rental.
We are keeping a mortgage on it for the time being. We could probably pay it off in a couple years... if we keep it...
This is sort of my husband's "dream" property, but I have my doubts. My husband is actually a rather weak individual. I've known all these years, but it's REALLY apparent right now (rather severe IBS). I've been doing all the work and what little work he's done at the property, sort of misses the mark in what needs to be done.
He needs to stay inside his townhome with his video games and laptop (which is exactly what he's doing right now.....).
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by JRR
We have a mortgage. I am in favor of using other people's money if the price is right
Me too.
Could pay it off if needed, but having available capital for other 'working' investments and opportunities has always paid off real well. (12%-18% annualized gains on other RE investments, while mortgage is a measly 3%).
My mortgage is considerably less expensive than my property taxes. and very inexpensive capital (Compared to commercial lending rates and fees)
I expect to be a renter in my later retired life, so I might as well continue to be used to the equivalent of a mortgage payment coming out of my monthly cash flows.
BTW... there is no "right" answer, and flexibility / benefit / wise use of investment $ can be argued on either side of the conversation.
Do what makes you sleep well. I watched the sheriff take my parents home, and the majority of my friends / peers pay their's off. I'm the outlier (as usual). I'm used to that, and I sleep fine.
Maybe tomorrow I will change my mind. That's allowed too!, but I have also been on the receiving end of...
“The best laid schemes o' Mice an' Men,
Gang aft agley.
An' lea'e us nought but grief an' pain,
For promis'd joy!
We paid our mortgage off a year ago so we could combine our house property with the lot we owned next door. We wanted the entire property homesteaded. The bank holding our mortgage wouldn’t agree to combining proprerties, although the county said they could force it if needed. We didn’t want to get into a pissing match with the bank, so paid it off.
I believe when my friend combined his home with the adjacent lot he owned, the tax on his house went up because it was now on a larger lot.
carrying a mortgage at retirement is a mixed bag ...
in the accumulation stage it pays to have a mortgage if you can beat the cost of the mortgage by a wide enough margin and A PREMIUM FOR TAKING ON INVESTMENT RISK WITH LEVERAGE .that means very high if not 100% equities .
unless i was 100% equities i would not borrow money today to put in a balanced portfolio with rates this low .
In effect you are buying equities leveraged with borrowed money . We tend to miss this factor ...
So you need to ask yourself if you were buying stocks on margin what would you want as a risk premium to make it worth doing .... you have 2-4% interest ...you have a risk free treasury bond paying almost 2% so how much of a risk premium over a risk free treasury bond would you want to not only buy equities but buy equities on leverage .. maybe 4% ?
If you were going to put that borrowed money in a balanced fund with a 6-7% return would you borrow money and do it knowing you have 2-4% interest and an investment with zero risk is paying 2% ?
That is a very different question now compared to just get more than the interest you pay.
In effect you are leveraged and your downside is now greater .....
Think this point through very carefully ....we don’t realize we can consider either one the investment bought on leverage when we borrow money and use our cash too.
We like to think it is our money in the stocks and the mortgage in the house but that is only mental masturbation when we do this ....it can be considered either way in effect in reality-because the situation has been altered from either just buying a house or just investing.
The risk premium as it is called becomes very important when using leverage because the downside is greater with leverage and that makes this a very different decision then we usually make.
We just have been fooling ourselves by taking our own money and the borrowed money and applying its use in a way that makes comfortable sense to us but the truth is all that money both your own and borrowed is coming from the same pocket and used interchangeably
I believe when my friend combined his home with the adjacent lot he owned, the tax on his house went up because it was now on a larger lot.
Taxes will be the same as we are paying now on both pieces, just combined in one bill. The main advantage is having the property under the protective umbrella of homestead.
My residential property is mortgage free and has been for years. However... my investment properties are split, with and without. I like to keep the net return on property at no less than 1% a month, that is my goal. so far so good.
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