Author Topic: Mortgage paid off-- so now what?  (Read 4155 times)

Mortgage Free Mike

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Mortgage paid off-- so now what?
« on: April 07, 2014, 08:26:43 PM »
Hey everyone,
As some of you know from my blog, I paid off my mortgage in December 2012. Now, almost 18 months later, I'm stuck. I don't know what to do next.
Start a business? Rental property? Investments only?
I'm 29 and I already made a big leap in January when I gave up my full-time job to pursue a freelance career. I've got the time on my hands now to make something happen.
What would you do or what did you do after paying off your mortgage?

Cassie

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Re: Mortgage paid off-- so now what?
« Reply #1 on: April 07, 2014, 08:37:42 PM »
I think it depends on your personality, how hard you want to work and what you want to pursue. It is very different to have rental properties versus investments.  Also if you do rental properties do you have the expertise/time to do the work or will you need to hire it out-again you need to figure out the financial cost of all the alternatives.  Having your home paid off at 29 really puts you in a great spot.

spoonman

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Re: Mortgage paid off-- so now what?
« Reply #2 on: April 07, 2014, 09:35:26 PM »
Congrats on paying off your mortgage at such an early age!

My biased opinion is that you should look into investing in dividend paying assets.  However, given that you are a freelancer and have greater flexibility with your time than most people, investing in rental properties might be the thing for you.

feelingroovy

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Re: Mortgage paid off-- so now what?
« Reply #3 on: April 07, 2014, 09:53:33 PM »
You may have trouble getting a mortgage for a rental now that you're newly self employed.  In my experience, you need two years of 1040s to show your self employment income.  They care more about income than assets.

And perhaps your freelancing took off faster than mine, but I had so many start up business expenses at first that it took a few years to get to a decent income that would support a mortgage.  So unless you have a spouse with W2 income, you may need to focus on building the business income first.

SDREMNGR

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Re: Mortgage paid off-- so now what?
« Reply #4 on: April 07, 2014, 11:21:12 PM »
As a self employed person, I agree with the above.  You can't get loans without a good w2.  I pay myself a decent taxable wage whenever I need to get a loan.  Hard to do without a regular job.  I would just read and meet and talk to people and let the idea come to you.  You have time and you are not in financial bind.

Mortgage Free Mike

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Re: Mortgage paid off-- so now what?
« Reply #5 on: April 10, 2014, 04:24:48 PM »
My main freelance job is at my former employer and unlike many freelance jobs, they take out taxes normally.  I am considered a temp employee-- just no benefits.
Thanks for your input, everyone. It gives me a direction to go in with my research.

feelingroovy

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Re: Mortgage paid off-- so now what?
« Reply #6 on: April 10, 2014, 05:44:41 PM »
Ah, that's different.  As long as you have pay stubs, you should be fine.  Unless, of course, they actually say "Temp" on them.  My husband had a 1 yr appointment that did this, and the bank wouldn't count his income on the mortgage application.

Well, what I did after paying off my mortgage was take out a home equity loan on my residence as a down payment on a rental duplex.    We paid off the HEL within a few years and have been cash flow positive ever since.  I don't regret it, mainly because it forced savings even in some lean years since then, but I see now that stock investing may have been a better approach.

Are you interested in real estate and are you in a good rental market?  If so, you can do really well with this approach.

Thegoblinchief

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Re: Mortgage paid off-- so now what?
« Reply #7 on: April 10, 2014, 07:17:07 PM »
If you're in a good local market, real estate is worth potentially pursuing. If your market is biased towards renters, I'd find it hard personally to learn REI solely through remote ownership. In that case, I'd invest in stocks.