Author Topic: Paying Down Mortgage Agressively Failure  (Read 4420 times)

BTDretire

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Re: Paying Down Mortgage Agressively Failure
« Reply #50 on: November 24, 2017, 06:59:00 AM »
Iím retiring in 4 years and generate $75k from passive income on a commercial property plus have a decent superfund.

What is a superfund?  In the U.S. it is a polluted old industrial site that the government is cleaning up.
Actually, Superfund is the money earmarked for cleanup projects that us taxpayers are using to clean the sites,
Yes, anytime I see goverment paying for anything, I like to insert "the hardworking taxpayers'
Which is about 50% of wage earners.

BTDretire

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Re: Paying Down Mortgage Agressively Failure
« Reply #51 on: November 24, 2017, 07:23:11 AM »
I don't see why this whole mortgage payoff thing is such a controversy.
 Admittedly with a slightly high 4.79% rate and Floating it is
a tougher calculation and with unknown future increases/decreases.
  Over time, you can certainly earn more than the mortgage rate.
As far as comfort, I'm way more comfortable with a liquid $50,000, growing
at a rate faster than the interest rate on a  $50,000 debt, than I am with $0 and no debt.
 And to add safety to the $50,000 liquid, there are plenty of Preferred stocks that will pay you 7%+.
Keeping the mortgage not only grows your stache faster, if your lose a job or run into other financial trouble, that liquid $50,000 is there to pull you out of trouble.
 That should end the controversy, and the top is in. :-)

Dicey

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Re: Paying Down Mortgage Agressively Failure
« Reply #52 on: November 24, 2017, 01:00:16 PM »
I don't see why this whole mortgage payoff thing is such a controversy.
 Admittedly with a slightly high 4.79% rate and Floating it is
a tougher calculation and with unknown future increases/decreases.
  Over time, you can certainly earn more than the mortgage rate.
As far as comfort, I'm way more comfortable with a liquid $50,000, growing
at a rate faster than the interest rate on a  $50,000 debt, than I am with $0 and no debt.
 And to add safety to the $50,000 liquid, there are plenty of Preferred stocks that will pay you 7%+.
Keeping the mortgage not only grows your stache faster, if your lose a job or run into other financial trouble, that liquid $50,000 is there to pull you out of trouble.
 That should end the controversy, and the top is in. :-)
It shouldn't really be a controversy,  it should just be something that people understand before they make a choice.

The best summary came from SachaFiscal (sp?) Over on the "DONT Pay Off Your Mortgage" Thread recently:

I love math more than I hate debt.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

clarkfan1979

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Re: Paying Down Mortgage Agressively Failure
« Reply #53 on: November 24, 2017, 01:46:03 PM »
for people entering retirement a paid off mortgage makes sense to me. However, for people who don't want to do it and think they can get better returns elsewhere while keeping the mortgage, that sounds good too.

I would like to add one thing. It might be difficult to try to access home equity in the event of an emergency without a job.

neverrun

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Re: Paying Down Mortgage Agressively Failure
« Reply #54 on: November 25, 2017, 05:08:52 AM »
In my mind, I don't see a lot of benefit in owing people money.  The thoughts of having debt give me stress.  I try to avoid stress at all costs.

When the recession hit, my husband lost his job.  I worked to put him through nursing school and barely maintained owning a home and a rental, with debt.  Weathering a rainy day would have been much easier without that debt.  Plus, less stressful.  If I put more in the market and maintained debt, a downturn would stress me out tremendously.  That is the rub for me.

I was the same way.  In fact I paid of my prior primary residence in 2016 because of this and the fact I didn't like paying $300+ a month in interest to the bank for boring money from the bank.  FWIW I paid of the mortgage with the proceeds of a rental so it was a lump sum. 

I came here and listened to Boarder when I bought and sold my home this year.  While I did put down more than 20%, I got a 30 yr mortgage which in my prior opinion was a no-no as well.  I invested the difference.  I have more than enough to pay it off in investments even in a typical bear market (but not great recession).  The dividends I now receive on my tax efficient investments are more than I pay in interest, even in year 1 of the 30 year mortgage.  (Confession time I do add 33.03 to principle to bring my payment up to an even number I think it subtracts a month or two from the mortgage.)