Author Topic: DONT Payoff your Mortgage Club  (Read 642885 times)

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3000 on: November 20, 2021, 05:08:12 PM »
Meanwhile…. My spouse said to me the other day “I’m even more stoked we have a mortgage now that inflation is back”

I shed a little tear of joy.

Between inflation and surging markets, not paying off your mortgage never looked better.  Sure, we could--and eventually will--have a market crash. But even then not paying off your mortgage is a clear winner. 

Radagast

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Re: DONT Payoff your Mortgage Club
« Reply #3001 on: November 21, 2021, 09:00:40 AM »
SUPER UPDATE

this month I also didn’t pay off my mortgage

STAY TUNED FOR NEXT MONTHS AMAZING EPISODE OF… DONT PAY OFF YOUR MORTGAGE AND ALWAYS TYPE IN CAPS
CAN’T WAIT!!!!!!!!!!!!!

Meanwhile…. My spouse said to me the other day “I’m even more stoked we have a mortgage now that inflation is back”

I shed a little tear of joy.
Yeah, paying extra on a 3% mortgage in a 2% inflationary world never made much sense to me. Paying extra on a 3% mortgage in a 5% inflationary world is the opposite of sense. If I wanted to waste money that badly I'd hang out at a casino slot machine so I could get free drinks while I was at it.

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #3002 on: November 21, 2021, 09:17:37 AM »
Pretty quiet around here lately. I guess not paying off the mortgage gets to be a non-event.

To stir things up: we finally refi'd two of our rentals after at least 18 months of searching. Went with AimLoans.com. Got 3.375% with relatively reasonable fees. Lowered the rates by 87.5 basis points on each one. I just received the final numbers on the first one and the second one closed yesterday. I'll post them later.

Aim was easy to work with, but each loan was a completely different experience. More deets to follow.

Oh, and the rental I've owned the longest (2003) is now mortgaged until 2051. Yay!

I'm just waiting for six months to be up so I can do another Better re-fi for the $2k Amex credit. That offer is valid through Dec of '22.
I had another re-fi lined up a few weeks ago but I didn't do it: 2.875 with approx $400 credit.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3003 on: November 22, 2021, 11:56:14 AM »
Pretty quiet around here lately. I guess not paying off the mortgage gets to be a non-event.

To stir things up: we finally refi'd two of our rentals after at least 18 months of searching. Went with AimLoans.com. Got 3.375% with relatively reasonable fees. Lowered the rates by 87.5 basis points on each one. I just received the final numbers on the first one and the second one closed yesterday. I'll post them later.

Aim was easy to work with, but each loan was a completely different experience. More deets to follow.

Oh, and the rental I've owned the longest (2003) is now mortgaged until 2051. Yay!

I'm just waiting for six months to be up so I can do another Better re-fi for the $2k Amex credit. That offer is valid through Dec of '22.
I had another re-fi lined up a few weeks ago but I didn't do it: 2.875 with approx $400 credit.

I bought my first property in 2008. When I was signing the papers, that xx/xx/38 date looked like a typo.

Thirty years seems so long. It's incredible to contemplate that banks are willing to fix our interest rates until then.

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3004 on: November 22, 2021, 12:23:09 PM »
<broken record>  Getting a 30-year fixed rate loan at or below the historical rate of inflation is the deal of a lifetime </broken record>

bryan995

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Re: DONT Payoff your Mortgage Club
« Reply #3005 on: November 22, 2021, 02:40:57 PM »
<broken record>  Getting a 30-year fixed rate loan at or below the historical rate of inflation is the deal of a lifetime </broken record>

I am struggling with how far to take this...

You don't want to purposely overpay on a home, but then you also want to account for the role inflation and low-interest-rates will play over the 30 years.
At some point it may be far better to buy now for more, than to wait for prices to drop as rates increase...
I doubt rents will ever decrease substantially?

If one can find properties that at a minimum breaks-even, why now leverage up to the T!T$ and buy as many properties as the bank will allow.

Who cares what happens to the value of the home, let the rent flow in and offset your fixed expenses.  #guarenteedtowork #profitin30? #2008alloveragain?
« Last Edit: November 22, 2021, 02:51:34 PM by bryan995 »

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3006 on: November 22, 2021, 04:09:49 PM »
<broken record>  Getting a 30-year fixed rate loan at or below the historical rate of inflation is the deal of a lifetime </broken record>

I am struggling with how far to take this...

You don't want to purposely overpay on a home, but then you also want to account for the role inflation and low-interest-rates will play over the 30 years.
At some point it may be far better to buy now for more, than to wait for prices to drop as rates increase...
I doubt rents will ever decrease substantially?

If one can find properties that at a minimum breaks-even, why now leverage up to the T!T$ and buy as many properties as the bank will allow.

Who cares what happens to the value of the home, let the rent flow in and offset your fixed expenses.  #guarenteedtowork #profitin30? #2008alloveragain?

I view housing as an expense, and like all expenses it is good to optimize them.   I wouldn't buy more house than I want or need or buy rental properties that don't cash flow.  But with today's rates I would also put down as small a downpayment as possible and never pay off the mortgage early.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3007 on: November 22, 2021, 06:58:15 PM »
My friend's daughter just bought her first home. It's a condo and it cost just over a million bucks. I am proud to report that she got a 30 year loan at 2.75%. She's a CPA, so she already knows not to prepay a cent on that sweet, sweet loan. So much love! And holy shit, I feel old saying this, but is that what things cost? Argh!

Telecaster

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Re: DONT Payoff your Mortgage Club
« Reply #3008 on: November 22, 2021, 07:17:04 PM »
I know, right? My wife and I have discussed maybe retiring to Boise from Seattle. So I've been keeping tabs on the market and shit!  The days of Boise having low cost housing have come and gone.  Keep looking, I guess. 

Kierun

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Re: DONT Payoff your Mortgage Club
« Reply #3009 on: November 23, 2021, 10:22:34 AM »
Don't come looking here, median price for a little grass shack is over 1M on this little rock. I am looking forward to paying off the mortgage on the condo though, so I can reinstate my VA entitlement and refi the house.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3010 on: November 23, 2021, 11:53:01 AM »
I have a cousin--recently turned 30--who continued working remotely at her Berkeley job from Boise. She loves it there!!!

UltraStache

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Re: DONT Payoff your Mortgage Club
« Reply #3011 on: November 27, 2021, 08:23:23 PM »
Hi, my name is UltraStache, and I love paying off debt.  I don't have a problem though.  I'm only here because Dicey told me to come check out the thread.  Maybe she steered me here because I was thinking about paying off my mortgage as fast as possible!! 

P.S…UltraStache has nothing to do with having an ultra-money mustache.……or being the Apex of Mustachianism.  It's more like, I couldn't think of a username….I'm an ultrasound tech…..working on my stache….maybe I can grow into the name!

RWD

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Re: DONT Payoff your Mortgage Club
« Reply #3012 on: November 27, 2021, 08:48:37 PM »
Hi, my name is UltraStache, and I love paying off debt.  I don't have a problem though.  I'm only here because Dicey told me to come check out the thread.  Maybe she steered me here because I was thinking about paying off my mortgage as fast as possible!!
If you pay off your debt as slowly as possible you'll be able to do what you love for longer. And bonus you'll probably be richer at the end too.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3013 on: November 28, 2021, 05:03:37 PM »
Hi, my name is UltraStache, and I love paying off debt.  I don't have a problem though.  I'm only here because Dicey told me to come check out the thread.  Maybe she steered me here because I was thinking about paying off my mortgage as fast as possible!! 


Hello @UltraStache  - what kinds of debt do you have that you’d like to get rid of?
While no debt is a tempting goal, it necessarily means giving up some of your cash. Those in the DPOYM crowd recognize that we can be much bettter off - financially - holding a fixed, low rate mortgage instead of paying it off at an accelerated rate. This is particularly true during a high-inflation, ultra-low-mortgage-rate time period like we have right now. 


UltraStache

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Re: DONT Payoff your Mortgage Club
« Reply #3014 on: November 29, 2021, 03:34:44 AM »
I became consumer debt free this year.  Recently found the FIRE movement and this site.  My plan going into next year was to max all retirement savings, then aggressively pay down my mortgage as fast as possible.  I got a number of suggestions to consider investing instead, while paying the mortgage slowly.  I'll admit, I'm open to that option now although I'm still tempted to take out a 15 year fixed on the new home we buy next year after moving, rather than a 30 year. 

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3015 on: November 29, 2021, 04:54:46 AM »
I became consumer debt free this year.  Recently found the FIRE movement and this site.  My plan going into next year was to max all retirement savings, then aggressively pay down my mortgage as fast as possible.  I got a number of suggestions to consider investing instead, while paying the mortgage slowly.  I'll admit, I'm open to that option now although I'm still tempted to take out a 15 year fixed on the new home we buy next year after moving, rather than a 30 year.
Stick around, you'll be singing the praises of 30 year mortgages in no time!

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3016 on: November 29, 2021, 05:09:34 AM »
I mentioned this elsewhere, but recording it here for posterity. Y'all know we just re-fi'd two of our rentals. The second re-fi just closed. I bought the property as a new build in 2003 with the intent to make it my retirement home eventually. The new mortgage runs through 2051. I'll be 93, yippee!

I also mentioned elsewhere that I tallied the estimated value of our RE holdings about a month ago, then again yesterday. The total estimate increased by $134k! Holy crap! I never earned that much in a whole year!

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3017 on: November 29, 2021, 06:31:33 AM »
Hi, my name is UltraStache, and I love paying off debt.  I don't have a problem though.  I'm only here because Dicey told me to come check out the thread.  Maybe she steered me here because I was thinking about paying off my mortgage as fast as possible!! 

P.S…UltraStache has nothing to do with having an ultra-money mustache.……or being the Apex of Mustachianism.  It's more like, I couldn't think of a username….I'm an ultrasound tech…..working on my stache….maybe I can grow into the name!

@UltraStache , it sounds like you're planning to move soon. Part of what drew me to the DPYM club was my own experience when moving: having accumulated a significant balance in a taxable investment account gave us enough available cash that we could move on our schedule, which meant buying the new home before selling the old one. Like you, we benefitted from having all other debts paid off, so there wasn't additional space in the budget needed for a car payment or anything like that.

Basically, equity in a house is a cruddy place to store funds if you think you'll need them soon.

JoePublic3.14

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Re: DONT Payoff your Mortgage Club
« Reply #3018 on: November 29, 2021, 02:46:46 PM »
I don’t fully belong here, but posting anyway. We have not had a mortgage for about five years. Paid one off, then moved (corporate relo) and simply used the sale proceeds to pay for the new one, and put the leftover $15k into VTSAX. We moved again, but this time the timing didn’t work out, and we ended up in a more expensive place (mostly due to COL in new area, house is about an even trade). So we have a mortgage. However, once we got the old place sold, we made a large payment and had the loan recalculated for free. The remainder will be going into VTSAX this week. Waiting on some other payments from the relo company so one big buy.

So we sort of belong here, but mostly don’t. Especially when I add that we have a 5/1 ARM at 2.0% and likely will move again within seven years. Perfect for not paying…..

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3019 on: November 29, 2021, 04:48:56 PM »
I don’t fully belong here, but posting anyway. We have not had a mortgage for about five years. Paid one off, then moved (corporate relo) and simply used the sale proceeds to pay for the new one, and put the leftover $15k into VTSAX. We moved again, but this time the timing didn’t work out, and we ended up in a more expensive place (mostly due to COL in new area, house is about an even trade). So we have a mortgage. However, once we got the old place sold, we made a large payment and had the loan recalculated for free. The remainder will be going into VTSAX this week. Waiting on some other payments from the relo company so one big buy.

So we sort of belong here, but mostly don’t. Especially when I add that we have a 5/1 ARM at 2.0% and likely will move again within seven years. Perfect for not paying…..

I don’t really understand… do you want to hold on to your mortgage or not?  If not, why not?

Retire-Canada

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Re: DONT Payoff your Mortgage Club
« Reply #3020 on: November 29, 2021, 05:44:05 PM »
I sold my house [had a mortgage] and bought a house jointly with my GF. I got a bunch of cash from the old house as it went up a lot. I could have been mortgage free if I dumped all the sale proceeds into the new house. Instead I put enough down to satisfy the lender we had a good down payment and then put the rest into my investments according to my AA.

So we now have a bigger mortgage jointly than I did solo, but my share of the mortgage is only about 50% of the mortgage I previously had. Being in Canada we renegotiate mortgages every 5 years. I'm thinking I'll pull some money out of the house every time that happens [assuming home values continue to climb] to increase my % of the joint mortgage until we are 50/50. Any funds I gain that way will get invested into my portfolio.

Living in a high risk earthquake zone I sleep better with a bigger mortgage! ;-)

ChpBstrd

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Re: DONT Payoff your Mortgage Club
« Reply #3021 on: November 29, 2021, 07:54:54 PM »
Maybe this was asked somewhere on pages 1-60, but do any of you in the DPYM secret society set aside your mortgage balance in relatively low-risk investments in order to both earn a higher yield than the mortgage and simultaneously avoid Sequence of Returns Risk (SORR) at the same time?

Example: I owe about $108k on my house, at 3.25%. Relatively low-volatility preferred stock funds like PGF yield 4.8%. I could keep $108k in PGF and $-108k on my mortgage and arbitrage the 1.55% difference for $1,674 per year.

Of course, the arbitrage game is getting harder as yields compress across the duration and risk curves, so I suspect most of you are putting it all in VTI/VTSAX. But because the mortgage payment increases one's monthly withdraw from stocks, it makes SORR from a 2-5 year -50% bear market a bigger concern. Do you dial down the AA risk in exchange for holding the mortgage, and how does that work as the available yields from bond funds drop?

VCIT yields 2.27%, which is less than my mortgage, AND it has significant risk when rates increase next year. So if that was my risk tolerance, I'd prefer to pay off my mortgage. I could go out on a limb with junk bonds - JNK yields 4.47% - but is the additional risk really worth the 1.22% spread over an absolutely risk-free investment? IDK. How do you approach this?

dandarc

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Re: DONT Payoff your Mortgage Club
« Reply #3022 on: November 30, 2021, 06:56:38 AM »
I personally just invest according to stated asset allocation, which means I'm losing a bit on ~20% of the portfolio (rebalance day I actually remembered this year), while gaining quite a lot on the other 80% or so - prefer that expected 5-7% spread vs. a known 2% spread. I might feel differently about it if I was in a much more expensive house where the cash-flow draw was more significant.

With a $108K mortgage, since I could make that payment working at any number of jobs I wouldn't sweat the cash-flow need on that. I'm actually pretty close to that number as it is - my mortgage sits at $121K currently, and an under $600 payment is not something I'm losing any sleep over.

I'm also on more of a coast-fire path, if all cash flow was truly being covered out of portfolio I might have more concern over SORR, but at this point even that 50% downswing wouldn't have me concerned with the mortgage specifically - it is a mere drop in our un-mustachian bucket of outflow these days. Goal for next year is to dial that back in to more respectable levels.

JJ-

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Re: DONT Payoff your Mortgage Club
« Reply #3023 on: November 30, 2021, 07:17:48 AM »
Maybe this was asked somewhere on pages 1-60, but do any of you in the DPYM secret society set aside your mortgage balance in relatively low-risk investments in order to both earn a higher yield than the mortgage and simultaneously avoid Sequence of Returns Risk (SORR) at the same time?

Example: I owe about $108k on my house, at 3.25%. Relatively low-volatility preferred stock funds like PGF yield 4.8%. I could keep $108k in PGF and $-108k on my mortgage and arbitrage the 1.55% difference for $1,674 per year.

Of course, the arbitrage game is getting harder as yields compress across the duration and risk curves, so I suspect most of you are putting it all in VTI/VTSAX. But because the mortgage payment increases one's monthly withdraw from stocks, it makes SORR from a 2-5 year -50% bear market a bigger concern. Do you dial down the AA risk in exchange for holding the mortgage, and how does that work as the available yields from bond funds drop?

VCIT yields 2.27%, which is less than my mortgage, AND it has significant risk when rates increase next year. So if that was my risk tolerance, I'd prefer to pay off my mortgage. I could go out on a limb with junk bonds - JNK yields 4.47% - but is the additional risk really worth the 1.22% spread over an absolutely risk-free investment? IDK. How do you approach this?

Are you talking about SORR for somebody who is about to retire with a mortgage?

I think keeping the entire mortgage balance in low risk funds is pretty against the grain and potentially unwise. Keeping 3-4 years of payments in low risk funds makes some sense to beat SORR because you know you have to pay them the first few years. But the entire balance will drag the portfolio down. Ideally it should include other fixed expenses outside the mortgage  too in those first few years, but you already know that.

If folks were signing up for $1674/yr on a 1.55% difference I doubt we'd have 60 pages. We're here more for the difference on 3% vs 8-10% per year over 25-30 years.

It is a good question though and should make some folks here think about how they invest the funds if refinancing just before retirement. Especially if the plan has always been 100% VTI.

Retire-Canada

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Re: DONT Payoff your Mortgage Club
« Reply #3024 on: November 30, 2021, 07:50:21 AM »
A few months before FIREd I converted my 100% stock AA to 100% stock + ~5 years spending in cash/bonds for SORR reasons. At the time that would have been ~50% of my mortgage balance. Now in the new house it's ~100% of my part of the mortgage or ~30% of the total mortgage.

But, at no time did I have my mortgage specifically in mind as I was setting up the non-stock part of the portfolio. I just wanted some money to spend if the markets went sideways. When the COVID crash happened I was glad for the cash/bonds even though the recovery was fast. At the time of the crash it was unclear how bad COVID would affect the global economy.

As noted above I plan to increase my mortgage when we renew every 5 years and I have no plans to increase the cash/bond part of the portfolio. I also don't rebalance that part of the portfolio. It stays at ~5 years of spending regardless of the value of my stocks.
« Last Edit: November 30, 2021, 08:05:03 AM by Retire-Canada »

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3025 on: November 30, 2021, 07:57:26 AM »
I personally just invest according to stated asset allocation, which means I'm losing a bit on ~20% of the portfolio (rebalance day I actually remembered this year), while gaining quite a lot on the other 80% or so - prefer that expected 5-7% spread vs. a known 2% spread. I might feel differently about it if I was in a much more expensive house where the cash-flow draw was more significant.

With a $108K mortgage, since I could make that payment working at any number of jobs I wouldn't sweat the cash-flow need on that. I'm actually pretty close to that number as it is - my mortgage sits at $121K currently, and an under $600 payment is not something I'm losing any sleep over.

I'm also on more of a coast-fire path, if all cash flow was truly being covered out of portfolio I might have more concern over SORR, but at this point even that 50% downswing wouldn't have me concerned with the mortgage specifically - it is a mere drop in our un-mustachian bucket of outflow these days. Goal for next year is to dial that back in to more respectable levels.
IMO, that's just shooting yourself in the foot. You want the market, based on historical returns, to beat the interest rate on the mortgage by as much as is reasonably and safely possible, for as long as possible. Investing the money so conservatively also dampens the mortgage's inflation shielding superpower. If the market stumbles, you just keep going about your business, making your steady, affordable mortgage payments while the market recovers, which it always does.

In the present day, I would keep a decently large EF if it helps you "sleep better". Make that EF earn its keep by chasing bank deposit bonuses with it. Boom, all your green soldiers are always on active duty.

JoePublic3.14

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Re: DONT Payoff your Mortgage Club
« Reply #3026 on: November 30, 2021, 08:28:36 AM »
I don’t fully belong here, but posting anyway. We have not had a mortgage for about five years. Paid one off, then moved (corporate relo) and simply used the sale proceeds to pay for the new one, and put the leftover $15k into VTSAX. We moved again, but this time the timing didn’t work out, and we ended up in a more expensive place (mostly due to COL in new area, house is about an even trade). So we have a mortgage. However, once we got the old place sold, we made a large payment and had the loan recalculated for free. The remainder will be going into VTSAX this week. Waiting on some other payments from the relo company so one big buy.

So we sort of belong here, but mostly don’t. Especially when I add that we have a 5/1 ARM at 2.0% and likely will move again within seven years. Perfect for not paying…..

I don’t really understand… do you want to hold on to your mortgage or not?  If not, why not?

Yeah, exactly…

Really got used to and enjoyed the flexibility not having a mortgage gave us (real or perceived.) However, I get the math of holding one.

So this time we are meeting in the middle, well shaded towards not having one, but still not at one extreme.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3027 on: November 30, 2021, 09:03:24 AM »
I don’t fully belong here, but posting anyway. We have not had a mortgage for about five years. Paid one off, then moved (corporate relo) and simply used the sale proceeds to pay for the new one, and put the leftover $15k into VTSAX. We moved again, but this time the timing didn’t work out, and we ended up in a more expensive place (mostly due to COL in new area, house is about an even trade). So we have a mortgage. However, once we got the old place sold, we made a large payment and had the loan recalculated for free. The remainder will be going into VTSAX this week. Waiting on some other payments from the relo company so one big buy.

So we sort of belong here, but mostly don’t. Especially when I add that we have a 5/1 ARM at 2.0% and likely will move again within seven years. Perfect for not paying…..

I don’t really understand… do you want to hold on to your mortgage or not?  If not, why not?

Yeah, exactly…

Really got used to and enjoyed the flexibility not having a mortgage gave us (real or perceived.) However, I get the math of holding one.

So this time we are meeting in the middle, well shaded towards not having one, but still not at one extreme.

Gotcha. 
I always urge people to make sure they have ample liquid investments and use all their tax-advantaged space before ever contemplating paying down a fixed-rate, low-interest mortgage.  But once you have those boxes checked paying things off is hardly the worst use of one’s money (though the ‘optimum’ path is still generally not paying it off).

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3028 on: November 30, 2021, 12:01:05 PM »
I think many of us would have paid off our mortgages even less, were it not for our partnerships with spouses who are cautious about investing.

LD_TAndK

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Re: DONT Payoff your Mortgage Club
« Reply #3029 on: December 29, 2021, 04:17:42 AM »
Woo finished a refinance with Better, got the $2000 AMEX bonus!

Total in fees was $1,408. Paid $452 of that out of pocket, the rest is rolled into the loan at 2.875% 30 yrs.

Paying $44 less per month or $528 annually. So not a huge win but it's something haha

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3030 on: December 29, 2021, 05:55:59 AM »
Interesting cross-discussion about inflation and the power of holding a mortgage.

I’ll admit this is the first time I’ve truly internalized the “fixed mortgage as an inflation hedge”. 
One aspect I had under-appreciated is the degree to which holding a mortgage makes that entire segment of monthly expenses immune to changes in inflation (because it’s fixed).  In our personal expenses, our mortgage accounts for almost 50% of monthly budget*, and the PI is the lion’s share. As a result, that large portion is completely immune from inflation.

Granted this is comparing relative percentage to absolute dollars, but I think that remains powerful. 

*how much we spend (excluding investment contributions), not our monthly income.

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3031 on: December 29, 2021, 07:02:38 AM »
Unexpected gift from my youngest sister, who is not particularly financially savvy. Turns out they got a 30 year mortgage re-fi at 2.25% back in 2019 and they have no intention of paying it off early. They have owned their home for nearly twenty years. I just hope that BIL's midlife crisis muscle car purchase wasn't procured with cash-out proceeds, but I'm not going to ask...

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #3032 on: December 29, 2021, 07:30:54 AM »
Not paying off your mortgage early is now getting mainstream attention!

https://www.wsj.com/articles/four-ways-to-manage-personal-finances-11640645156


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Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3033 on: December 29, 2021, 07:41:22 AM »
Not paying off your mortgage early is now getting mainstream attention!

https://www.wsj.com/articles/four-ways-to-manage-personal-finances-11640645156


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It's paywalled, but nice to know...

rmorris50

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Re: DONT Payoff your Mortgage Club
« Reply #3034 on: December 29, 2021, 08:04:55 AM »
Not paying off your mortgage early is now getting mainstream attention!

https://www.wsj.com/articles/four-ways-to-manage-personal-finances-11640645156


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It's paywalled, but nice to know...
Summary:

1. Don’t be quick to pay off low interest rate mortgage
2. Don’t over-pay for items because “supplies are limited”
3. Don’t track your spending - save first, spend the rest
4. Don’t fall prey to FOMO (cryptos, NFTs, etc) and jump in without purpose.

The rest is filler!


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dragoncar

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Re: DONT Payoff your Mortgage Club
« Reply #3035 on: December 29, 2021, 01:45:47 PM »
3. Don’t track your spending - save first, spend the rest

This is BS.  The rule is: save first, save the rest

FragglesRock666

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Re: DONT Payoff your Mortgage Club
« Reply #3036 on: December 29, 2021, 02:38:16 PM »
Update:  Still haven't paid any extra on my mortgage!
And just opened my first ever taxable brokerage account, with scheduled weekly deposits starting next week, where I will be sending my "extra" money instead of to the mortgage. 

GrumpyPenguin

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Re: DONT Payoff your Mortgage Club
« Reply #3037 on: January 01, 2022, 07:23:57 AM »
Hi all!  Just commenting to say I'm joining the club.  About to close on a big ol' house with a fatty 30 year mortgage at 2.625%.  Bring on the inflation, I'm ready.

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3038 on: January 01, 2022, 08:12:28 AM »
Hi all!  Just commenting to say I'm joining the club.  About to close on a big ol' house with a fatty 30 year mortgage at 2.625%.  Bring on the inflation, I'm ready.
Great attitude. Welcome!

SavinMaven

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Re: DONT Payoff your Mortgage Club
« Reply #3039 on: January 01, 2022, 08:24:11 AM »
29 years left on a beautiful 2.75% rate. Happy to be here!

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3040 on: January 01, 2022, 08:29:19 AM »
29 years left on a beautiful 2.75% rate. Happy to be here!

Are you my twin?  Same rate and we have 355 payments to go.

Edited; number typo.
« Last Edit: January 01, 2022, 08:31:03 AM by nereo »

sonofsven

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Re: DONT Payoff your Mortgage Club
« Reply #3041 on: January 01, 2022, 10:48:43 AM »
Twenty nine years six months left at 2.75, but who's counting?

Dicey

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nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3043 on: January 09, 2022, 11:33:15 AM »
There’s an interesting discussion going on in another thread about what people are are experiencing with rising inflation.
There is a bit of click bait at the end, but man, I do not like DR, so I'm sharing it here.


https://www.fool.com/the-ascent/mortgages/articles/heres-why-warren-buffett-is-right-and-dave-ramsey-is-wrong-about-mortgages/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I bristle when people call DR a “financial expert”. Just because you talk about something a lot doesn’t make you an expert. It’s even worse when put on equal footing with Buffett.

Virtus3

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Re: DONT Payoff your Mortgage Club
« Reply #3044 on: January 09, 2022, 11:42:57 AM »
Interesting read through this thread. I'm on board with 350 remaining payments at 2.625%.

talltexan

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Re: DONT Payoff your Mortgage Club
« Reply #3045 on: January 10, 2022, 09:15:48 AM »
If we have to accept Warren Buffet into our DPYM club, I won't complain.

Warren Buffet had something like 1% of his eventual Net Worth at the time he bought that house. He could have bought a house 10X as expensive, and it wouldn't have impacted his story. I suspect the house today would appraise in the neighborhood of $1 million, which is (financially) irrelevant to Buffet's fortune. If memory serves me right, Ramsey lives in a house worth several multiples of that, but I do not doubt even that opulent house is a very small portion of his net worth. My guess is that the people here are quite a bit more exposed wrt the value of our primary residence compared to the rest of our financial picture.

I think setting up the world in which you have to be either Ramsey or Buffet is a false dichotomy.

catccc

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Re: DONT Payoff your Mortgage Club
« Reply #3046 on: January 14, 2022, 11:14:07 AM »
29 years left on a beautiful 2.75% rate. Happy to be here!

Are you my twin?  Same rate and we have 355 payments to go.

Edited; number typo.

I'm in a very similar position!  353 to go at 2.75%!  I would have been at 355, but I couldn't help myself from making an extra mortgage payment in the month we moved.  We paid rent in July but our first mortage payment wasn't due until September.  I made a payment in August.  Trying to keep myself from doing that again, but it is hard!

YttriumNitrate

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Re: DONT Payoff your Mortgage Club
« Reply #3047 on: January 14, 2022, 11:42:51 AM »
If we have to accept Warren Buffet into our DPYM club, I won't complain.
Warren Buffet had something like 1% of his eventual Net Worth at the time he bought that house. He could have bought a house 10X as expensive, and it wouldn't have impacted his story.
Well, had he bought a house 10x more expensive, his story might have changed in that instead of calling his gas station a $6 billion dollar mistake, he might have called his house that.
https://www.fool.com/investing/2017/10/04/buffett-hopes-his-second-gas-station-bet-works-out.aspx

EDIT: So it looks like he bought his house in 1958 for $31,500 and didn't become a millionaire until 1962. Just as an assumption, let's say in 1958 he was worth $500k. Buying a 10x house ($315k) would require about a $63k down payment (roughly 12% of his net worth). Applying that percentage to today, buying a much nicer house would have been about a $14 billion dollar mistake for Buffet.
« Last Edit: January 14, 2022, 11:53:54 AM by YttriumNitrate »

nereo

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Re: DONT Payoff your Mortgage Club
« Reply #3048 on: January 14, 2022, 01:30:24 PM »
If we have to accept Warren Buffet into our DPYM club, I won't complain.
Warren Buffet had something like 1% of his eventual Net Worth at the time he bought that house. He could have bought a house 10X as expensive, and it wouldn't have impacted his story.
Well, had he bought a house 10x more expensive, his story might have changed in that instead of calling his gas station a $6 billion dollar mistake, he might have called his house that.
https://www.fool.com/investing/2017/10/04/buffett-hopes-his-second-gas-station-bet-works-out.aspx

EDIT: So it looks like he bought his house in 1958 for $31,500 and didn't become a millionaire until 1962. Just as an assumption, let's say in 1958 he was worth $500k. Buying a 10x house ($315k) would require about a $63k down payment (roughly 12% of his net worth). Applying that percentage to today, buying a much nicer house would have been about a $14 billion dollar mistake for Buffet.

Given that this is already a pretty absurd hypothetical...
... simply finding a home that was worth 10x as much in Omaha in 1958 would have been a challenge, unless it was an opulent custom home. Buffett's home is pretty darn nice by local standards, and it always amuses me that the press keeps referring to it as "modest".  It's 6,000 square feet in a really nice neighborhood. It's not like Star Island Florida where there's home after home of the rich and famous.  It's Omaha - sleepy small city in the heartland with a (well) below average household income (then and now).

Dicey

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Re: DONT Payoff your Mortgage Club
« Reply #3049 on: January 14, 2022, 04:31:13 PM »
If we have to accept Warren Buffet into our DPYM club, I won't complain.
Warren Buffet had something like 1% of his eventual Net Worth at the time he bought that house. He could have bought a house 10X as expensive, and it wouldn't have impacted his story.
Well, had he bought a house 10x more expensive, his story might have changed in that instead of calling his gas station a $6 billion dollar mistake, he might have called his house that.
https://www.fool.com/investing/2017/10/04/buffett-hopes-his-second-gas-station-bet-works-out.aspx

EDIT: So it looks like he bought his house in 1958 for $31,500 and didn't become a millionaire until 1962. Just as an assumption, let's say in 1958 he was worth $500k. Buying a 10x house ($315k) would require about a $63k down payment (roughly 12% of his net worth). Applying that percentage to today, buying a much nicer house would have been about a $14 billion dollar mistake for Buffet.

Given that this is already a pretty absurd hypothetical...
... simply finding a home that was worth 10x as much in Omaha in 1958 would have been a challenge, unless it was an opulent custom home. Buffett's home is pretty darn nice by local standards, and it always amuses me that the press keeps referring to it as "modest".  It's 6,000 square feet in a really nice neighborhood. It's not like Star Island Florida where there's home after home of the rich and famous.  It's Omaha - sleepy small city in the heartland with a (well) below average household income (then and now).
I always think the same thing when the subject of his "modest" house comes up.