Author Topic: Mortgage Payoff Club!!  (Read 595935 times)

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1550 on: April 17, 2018, 09:53:49 PM »
dicey and boarder42, thank you for the (bit presumptive) comments, but all's well and the plan to kill the mortgage is firmly intact.   Your counter-arguments to remain indebted add to my inspiration to kill the mortgage this year.   It has had almost zero tax benefit the past 2 years and will have zero tax benefit with the new tax law and standard deductions in 2018 tax year as well.    And thanks to plainjane for the comments that were indeed correct.   The house expenses didn't touch emergency funds and the tax bill payment was planned/saved in advance.   Just a large chunk to drop in a particular month out of normal cash flow (and the small side account for taxes) leaving little to pay down the mortgage is all.   Still on track to be free in July (and looking forward to figuring out how to change my username to something like... "free4ever"! ;-)

Yes!  Cheers to Freedom 2018! :-)

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1551 on: April 18, 2018, 01:53:14 AM »
dicey and boarder42, thank you for the (bit presumptive) comments, but all's well and the plan to kill the mortgage is firmly intact.   Your counter-arguments to remain indebted add to my inspiration to kill the mortgage this year.   It has had almost zero tax benefit the past 2 years and will have zero tax benefit with the new tax law and standard deductions in 2018 tax year as well.    And thanks to plainjane for the comments that were indeed correct.   The house expenses didn't touch emergency funds and the tax bill payment was planned/saved in advance.   Just a large chunk to drop in a particular month out of normal cash flow (and the small side account for taxes) leaving little to pay down the mortgage is all.   Still on track to be free in July (and looking forward to figuring out how to change my username to something like... "free4ever"! ;-)
Speaking only for myself, congratulations! At least the discussion got you to think about it, which is a good thing.

Blindsquirrel

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Re: Mortgage Payoff Club!!
« Reply #1552 on: April 18, 2018, 03:04:10 PM »
    I wrote a check for the final balance on our mortgage last week. It is a very, very good feeling to have that expense gone. Will not carry that monthly expense in retirement.

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1553 on: April 18, 2018, 05:32:13 PM »
    I wrote a check for the final balance on our mortgage last week. It is a very, very good feeling to have that expense gone. Will not carry that monthly expense in retirement.

Congrats Blindsquirrel! 

DreamFIRE

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Re: Mortgage Payoff Club!!
« Reply #1554 on: April 18, 2018, 07:14:20 PM »
    I wrote a check for the final balance on our mortgage last week. It is a very, very good feeling to have that expense gone. Will not carry that monthly expense in retirement.

Congratulations!  I've paid off two mortgages over my career.  Both were quite a long time ago when rates were in the 7 to 9% range, and I was still better off sticking with the standard deduction, so there was no tax deduction, either.  It's definitely a great feeling getting those paid off.  My savings rate has been quite high almost every year since paying off my house.

Money Badger

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Re: Mortgage Payoff Club!!
« Reply #1555 on: April 19, 2018, 06:29:38 AM »
Way to go Blindsquirrel!!   Well on your way to Handlebar ‘stache level savings and investing now.  ;-)

Blindsquirrel

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Re: Mortgage Payoff Club!!
« Reply #1556 on: April 20, 2018, 02:51:46 PM »
    Thanks a ton for the nice thoughts and very warm feels. For me it is the financially sound thing to do as it freed up $1265 a month in mandatory spending. This pay off is to reduce tail end risk. The Big Ern who is a very astute fellow makes quite good cases for my deed of paying off my mortgage. Not only that, we have gone crazy and paid off our rental properties as well! The horror! The Angst? The sleeping like a baby feeling is pretty damn good.

https://earlyretirementnow.com/2017/10/11/the-ultimate-guide-to-safe-withdrawal-rates-part-21-mortgage-in-retirement/

Also, I was definitely awoken by the mortgage vs bonds argument  which I found a great read.

 https://earlyretirementnow.com/2016/11/02/why-would-anyone-have-a-mortgage-and-a-bond-portfolio/

Thanks again and keep on trucking, interest is what you should receive, not pay!

Bateaux

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Re: Mortgage Payoff Club!!
« Reply #1557 on: April 21, 2018, 06:55:51 AM »
It's as if you drove a wooden stake into B42's heart.

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1558 on: April 21, 2018, 07:03:54 AM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

tomsang

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Re: Mortgage Payoff Club!!
« Reply #1559 on: April 21, 2018, 09:23:43 AM »
    Thanks a ton for the nice thoughts and very warm feels. For me it is the financially sound thing to do as it freed up $1265 a month in mandatory spending. This pay off is to reduce tail end risk. The Big Ern who is a very astute fellow makes quite good cases for my deed of paying off my mortgage. Not only that, we have gone crazy and paid off our rental properties as well! The horror! The Angst? The sleeping like a baby feeling is pretty damn good.

https://earlyretirementnow.com/2017/10/11/the-ultimate-guide-to-safe-withdrawal-rates-part-21-mortgage-in-retirement/

Also, I was definitely awoken by the mortgage vs bonds argument  which I found a great read.

 https://earlyretirementnow.com/2016/11/02/why-would-anyone-have-a-mortgage-and-a-bond-portfolio/

Thanks again and keep on trucking, interest is what you should receive, not pay!

Have you calculated how many extra years you have added to your FIRE date?  Would you be retired if you invested vs. paid off your low interest fixed rate mortgages?  Anyone paying down their mortgage early over the past decade has taken a large financial hit. Everyone who is accumulating wealth over the US history has been better off investing vs paying off a sub 4% mortgage.

Did you read the article that was imbedded in the link that you posted?  https://earlyretirementnow.com/2016/12/28/seven-reasons-in-defense-of-debt-and-leverage/

Blindsquirrel

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Re: Mortgage Payoff Club!!
« Reply #1560 on: April 21, 2018, 09:26:34 AM »
     I was not trying to wee in any ones Wheaties with the post but a mortgage can make Sequence of Return Risk (SoRR) a pretty scary risk that you really do need to consider and hedge against. When you have good sized mandatory withdrawals from a declining portfolio, the process is has been termed Dollar Cost Ravaging :) and not something that you want. Markets will always recover but it may not happen quickly enough to fix your mauled stash.

  There can also be solid reasons to keep fixed rate debt in retirement. If real estate craters, and you can't pay the mortgage, go to foreclosure,  the bank eats 80% of the loss and you only eat 20% of the loss at 80% LTV. A "win" for you.  Also, a big fixed rate mortgage can also serve as a giant synthetic short position on the US $. If inflation gets very high, you can pay off your crib in future dollars that are worth a heck of a lot less than the big fat pre-inflation $ the bank initially leant you. To each his own I say but leverage has caused an awful lot more bankruptcy and strife than a paid off house has ever caused a family. Peace

Blindsquirrel

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Re: Mortgage Payoff Club!!
« Reply #1561 on: April 21, 2018, 12:14:38 PM »
  Yep I read the link and agree with quite a bit of it, like I said to each his own. It is purely a risk management decision.

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1562 on: April 21, 2018, 12:55:31 PM »
  Yep I read the link and agree with quite a bit of it, like I said to each his own. It is purely a risk management decision.
Respectfully disagree again, Bs. It is purely an emotional decision if one makes it without fully understanding what they are giving up in the long run. Don't understand inflation, leverage, or sequence of returns? Leaving money on the table in terms of employer match or tax-advantaged savings? Then you do not understand risk management. Don't prepay a cent on your cheap-ass, affordable, fixed-rate mortgage until you do. Simple. Educate yourself. Don't make important decisions based on "feelings". Or do. Just know it will take longer and require more hard-earned green soldiers to get to FI if you do. Who wants that?

boarder42

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Re: Mortgage Payoff Club!!
« Reply #1563 on: April 21, 2018, 01:06:31 PM »
  Yep I read the link and agree with quite a bit of it, like I said to each his own. It is purely a risk management decision.

And until the day you paid it off fully you were at a higher state of risk than having invested vs paying down. So you looked at the risk. Were emotionally afraid of being in a riskier financial spot and actively chose the riskier path.  I mean that's if it was even evaluated from a risk standpoint
 
I mean the only semi risk of a non paid off house is sequence of returns. (hyper deflation also but this destroys the current economy so it's highly improbable). When acruing wealth sequence of returns is not a risk with an real weight. Post FIRE it carries more weight but is more a product of your life expectancy than anything else. Anyone retiring sub 50 easily needs to curb logevity risk instead of sequence of return based on historical metrics.
« Last Edit: April 21, 2018, 02:34:38 PM by boarder42 »

Blindsquirrel

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Re: Mortgage Payoff Club!!
« Reply #1564 on: April 21, 2018, 03:41:54 PM »
 I am 50 years old so I meet the requirement to pay off the dadgum house. :).

boarder42

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Re: Mortgage Payoff Club!!
« Reply #1565 on: April 21, 2018, 04:16:00 PM »
I am 50 years old so I meet the requirement to pay off the dadgum house. :).

Betting on a shorter life. To each their own I guess.

tomsang

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Re: Mortgage Payoff Club!!
« Reply #1566 on: April 21, 2018, 06:31:38 PM »
If you want to calculate how much it has hurt you, by paying off your mortgage, you can use this calculator.

Here is the S&P 500 calculator with dividends:
https://dqydj.com/sp-500-return-calculator/
« Last Edit: April 21, 2018, 06:36:21 PM by tomsang »

Bateaux

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Re: Mortgage Payoff Club!!
« Reply #1567 on: April 21, 2018, 08:16:31 PM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1568 on: April 21, 2018, 11:12:54 PM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.
And how does that drive a stake through his heart, exactly? If you didn't mean malice, what did you mean, please?

jedsbud

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Re: Mortgage Payoff Club!!
« Reply #1569 on: April 22, 2018, 02:13:19 PM »
Tomorrow is going to be a glorious day.  The wire instructions for my mortgage payoff are all set.  I have/had a 5/1 ARM 30 Year that has served me well as interest rates crashed and remained low for the last 13 years.  A couple of years ago I got serious about paying down my mortgage or not paying it down.  Did all the math on refinancing to a fixed rate mortgage and investing the extra I was paying or just paying it off and the end difference was nothing more than a rounding error.  Therefore, paying it off became the goal.
 
I was tracking my debt and enjoyed watching the number drop every month.  Then Harvey happened and basically everything was lost.  There are multiple things that helped me recover and to be at this point today.  First, I had flood insurance, many people I knew didn’t but I am thankful I made that decision years ago.  Second, I already had a decent savings rate so I was in a better position than most of my neighbors.  Third, I had a great amount of support from family and friends primarily from church and my faith never waivered even when I finally succumbed to the reality about two weeks after the water receded.   Fourth, I have been blessed with a great job and the highest paid bonus of my life, which has put me in this position today.
 
It’s time to put that mortgage money to work.  I will invest some, but I also need to give back more.  This freedom is hard to calculate on a spreadsheet and it can’t be measured on an expected investment return for the future. 

Aug 2016 - $192K in Mortgage Debt
Aug 2017 - $88K in Mortgage Debt
Sep 2017 - Harvey
May 2018 – Freedom
Full disclosure: I had a home for my oldest son to live in for college that was sold in May of 2017 reducing $71K in debt. 


Bateaux

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Re: Mortgage Payoff Club!!
« Reply #1570 on: April 22, 2018, 08:08:39 PM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.
And how does that drive a stake through his heart, exactly? If you didn't mean malice, what did you mean, please?

Dicey I was just being an asshole.

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1571 on: April 22, 2018, 09:37:02 PM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.
And how does that drive a stake through his heart, exactly? If you didn't mean malice, what did you mean, please?

Dicey I was just being an asshole.
Oh, Bateaux, I totally call bullshit on that! You're never an asshole. I also do not keep up with anything Vampire, so I really didn't understand. The consequences of a low televised entertainment diet, I guess.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1572 on: April 27, 2018, 02:08:00 PM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.
And how does that drive a stake through his heart, exactly? If you didn't mean malice, what did you mean, please?

oh FFS, Dicey, boarder42, others who don't want to pay off the mortgage, can you please just leave this thread?  You've been asked multiple times and you always come back with the same reason:  people don't understand the numbers.  Yes, WE UNDERSTAND.  WE ARE NOT FUCKING MORONS.   Seriously?  Someone pays off their largest expense and the response is to put them down?  Please allow people to make choices even if they are not the choices you would make.  STOP with all of your unsolicited advice.  This is a celebration thread and you're throwing cold water on all of us.   

I'm so tired of people being having to be polite to you guys even after you tell them how stupid they are.  There are perfectly good financial reasons to pay off a mortgage and we've explained it to you over and over and over again.  And you think that any emotional reason is not as important as a financial reason.  But you know what's so interesting to me?  you two (Boarder and Dicey) both have no fear of losing your homes because Dicey's is paid off and Boarder has rich parents that will loan him money such that sequence of returns doesn't impact him as much as it would others who still have that risk.  Lucky for you two!  Now get off the backs of everyone else while we try to get to a spot where we feel comfortable with our level of risk.   

I know I'm being somewhat harsh and Dicey will probably turn me in to the internet police (again), but I'm sick and tired of you guys condescending to everyone over here.  You've been asked to leave previously, so why won't you just go?  It's really gotten under my skin.  BTW, an appropriate response to this is to keep quiet and leave, not to lecture me about risk. 


DS

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Re: Mortgage Payoff Club!!
« Reply #1573 on: April 27, 2018, 02:43:08 PM »
MOD NOTE:

This thread is for celebrating mortgage payoffs.

Not for debating if one should pay off a mortgage, or not.

All posts regarding the merits of paying off a mortgage are off topic. Please find another, more appropriate thread to post these arguments in.

Cheers!


Livethedream

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Re: Mortgage Payoff Club!!
« Reply #1574 on: April 28, 2018, 08:06:43 PM »
Back on topic!

We just paid $45k towards our loan, new balance of $93k! Just got some other good news that my wife’s family business is sitting on some extra cash and looking to distribute it, might scrape up some cash and try to pay it off next month.

Started 10/24/16 @ 187k.

boarder42

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Re: Mortgage Payoff Club!!
« Reply #1575 on: April 29, 2018, 05:59:13 AM »
It's as if you drove a wooden stake into B42's heart.
WTF? If this statement came from someone less respected, it might be face punch worthy. Care to elaborate, Bateaux?

He's going to come out and prove mathematically that it's less profitable to pay off the mortgage.     I mean no malice to the spreadsheet gurus.
And how does that drive a stake through his heart, exactly? If you didn't mean malice, what did you mean, please?

oh FFS, Dicey, boarder42, others who don't want to pay off the mortgage, can you please just leave this thread?  You've been asked multiple times and you always come back with the same reason:  people don't understand the numbers.  Yes, WE UNDERSTAND.  WE ARE NOT FUCKING MORONS.   Seriously?  Someone pays off their largest expense and the response is to put them down?  Please allow people to make choices even if they are not the choices you would make.  STOP with all of your unsolicited advice.  This is a celebration thread and you're throwing cold water on all of us.   

I'm so tired of people being having to be polite to you guys even after you tell them how stupid they are.  There are perfectly good financial reasons to pay off a mortgage and we've explained it to you over and over and over again.  And you think that any emotional reason is not as important as a financial reason.  But you know what's so interesting to me?  you two (Boarder and Dicey) both have no fear of losing your homes because Dicey's is paid off and Boarder has rich parents that will loan him money such that sequence of returns doesn't impact him as much as it would others who still have that risk.  Lucky for you two!  Now get off the backs of everyone else while we try to get to a spot where we feel comfortable with our level of risk.   

I know I'm being somewhat harsh and Dicey will probably turn me in to the internet police (again), but I'm sick and tired of you guys condescending to everyone over here.  You've been asked to leave previously, so why won't you just go?  It's really gotten under my skin.  BTW, an appropriate response to this is to keep quiet and leave, not to lecture me about risk.

You probably should stop referncing my name and referencing my posts here if you just want it to be celebratory. And for the record not everyone gets the math as you say. You can finds multiple posts in here where people are giving their reason for paying down their mortgage and the reason clearly indicates they do not understand and the paying down of a mortgage actually increases the risk they are claiming to mitigate. 

And you clearly do not understand the math bc the contingency of my parents possibly helping out is a reason that would mitigate risk when payi g down a mortgage over investing. Those not paying down a mortgage are at much lower risk of financial failure which you clearly do not grasp.
« Last Edit: April 29, 2018, 04:29:22 PM by boarder42 »

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1576 on: April 29, 2018, 08:47:19 PM »
I'm not going to quote BH's comments directly. Rather, here are excerpts from my last few posts on this thread. Can we bury the hatchet, please?

Congrats, frizzy!
Ditto [snip]
Well done!
[snip]
Love ^this^. Congratulations, SS!

Today our mortgage is $54,960. Below $55k! [snip]
Congratulations!

just wired in the final $48K today to reduce the mortgage balance to...$0...
Holy cow, that's a lot of money! Good for you! FIRE must not be far away.


 

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1577 on: April 30, 2018, 04:55:08 AM »
I'm not going to quote BH's comments directly. Rather, here are excerpts from my last few posts on this thread. Can we bury the hatchet, please?

Congrats, frizzy!
Ditto [snip]
Well done!
[snip]
Love ^this^. Congratulations, SS!

Today our mortgage is $54,960. Below $55k! [snip]
Congratulations!

just wired in the final $48K today to reduce the mortgage balance to...$0...
Holy cow, that's a lot of money! Good for you! FIRE must not be far away.

Good job saving anywhere everyone! It’s a personal decision even MMM has made to payoff the mortgage. There’s shockingly simple math, and then there’s reality, laziness,  and foresight/hindsight and lots of guessing and second guessing because “past returns are not guaranteed”. 

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1578 on: April 30, 2018, 04:56:13 AM »
Dicey, you are being very disingenous.  You are cherry picking some congratulations comments to try to disguise your true intentions:

This is a US-based site, so we are endeavoring to help the majority of readers make the most optimal decisions to reach FIRE faster. And yes, the message bears repeating, every few pages or so. Thanks for noticing.

This is a celebration thread, period.  Your 'message' is not wanted on this thread, so please -- just take it elsewhere.

boarder42

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Re: Mortgage Payoff Club!!
« Reply #1579 on: April 30, 2018, 07:05:21 AM »
Dicey, you are being very disingenous.  You are cherry picking some congratulations comments to try to disguise your true intentions:

This is a US-based site, so we are endeavoring to help the majority of readers make the most optimal decisions to reach FIRE faster. And yes, the message bears repeating, every few pages or so. Thanks for noticing.

This is a celebration thread, period.  Your 'message' is not wanted on this thread, so please -- just take it elsewhere.

so if there was a celebration thread about eating lunch out every day b/c you know it makes sense b/c of the time it saves me - no one should comment there when people make blatantly incorrect statements - got it.. man has this site gone soft!

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1580 on: April 30, 2018, 07:07:15 AM »
Dicey, you are being very disingenous.  You are cherry picking some congratulations comments to try to disguise your true intentions:

This is a US-based site, so we are endeavoring to help the majority of readers make the most optimal decisions to reach FIRE faster. And yes, the message bears repeating, every few pages or so. Thanks for noticing.

This is a celebration thread, period.  Your 'message' is not wanted on this thread, so please -- just take it elsewhere.
Did you notice the comments quoted were made after ARS' mod note?

Curious that having supposed "true intentions" is somehow being negative. Isn't the whole damn point of MMM how to muster one's green soldiers for maximum effect? MMM is all about using a different approach to achieve the goal of FIRE.

This thread is in the General Discussion section. If someone started a topic crowing about their purchase of a brand new Tesla Model X, do you really believe the same "This is a celebration thread, period" warning would apply? I heard the mod's comment, and responded, but let's not forget we're all still on the MMM Forum.

Finally, I have mostly kept a low profile on this thread since the mid note, a calm which was shattered by BlueHouse.

iluvzbeach

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Re: Mortgage Payoff Club!!
« Reply #1581 on: April 30, 2018, 08:05:04 AM »
@arebelspy Can a mod please ask Dicey & boarder42 to, once again, stop posting in this thread? Their insistence at posting in it, even after being told not to, is getting really, really old.

birdman2003

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Re: Mortgage Payoff Club!!
« Reply #1582 on: April 30, 2018, 08:16:11 AM »
Another $4k hit to the principal balance, now under $90k!

frost7777

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Re: Mortgage Payoff Club!!
« Reply #1583 on: April 30, 2018, 08:23:43 AM »
To keep the celebration going, and to make sure our newest club members don't get lost in the noise...

Congratulations @jedsbud!  Enjoy your new found freedom and enjoy the possibilities that you now know are within reach.

@Livethedream, Great job getting your balance down to 5 digits.  Sounds like you have some big decisions to make if you are looking at potentially paying that mortgage off next month!

@birdman2003, you are flying through that principal.  (nothing like a bad pun to lighten things up)

Have a great day everyone.

verfrugal

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Re: Mortgage Payoff Club!!
« Reply #1584 on: April 30, 2018, 09:23:25 AM »
Woot!  I joined the club twice in the last three years!

For full disclosure, I own both of my houses outright.  One I bought in cash, the other I bought with a mortgage and paid off in just over a year.  I was lucky enough to sell a startup, so this was not a hardship nor did it require the kind of long-term dedication and perseverance that others have shown here.

When I was a teen, my family had our house foreclosed on.  This certainly makes the entire notion of owning a house an emotional issue for me, and I did NOT approach it in terms of optimizing financial outcomes, or the return I could have gotten from that money.  The first house is the one I live in with my wife.  The second one is a house I bought for my mother, and the family, in our hometown.  I was optimizing for peace of mind, and minimizing my monthly expenses -- aka health, resilience and security.

I knew the math -- I can guess how much I would have made had I put it into the market over the last couple years, WAY more than the 3.X interest rate on the two loans would have cost me in that time.  Would have recovered a chunk of the taxes I paid on that income, and it would still be growing now, faster than the market value of the two houses.

I knew it would add a year or two to my FIRE savings schedule.  But, I was planning working for a several more years anyways to ensure my team was established in the new company, and apparently to also build a new team and a new product!  Lastly, the golden handcuffs made it worthwhile to stick around.

It also made financial sense to diversify into real-estate, since all of my deferred compensation would be in stock.  Really tho, I don't consider the houses an investment.  I do consider it a diversification and risk mitigation -- and it comes with a pool!  Had I kept that money in the market, I would not get the diversification of assets.  The risk it mitigates is losing my income, our monthly nut, with both houses, is now smaller than DWs educator earnings.

I don't get the same satisfaction from looking at my VSTAX balance as I do from waking up in a house I own outright, and seeing my mother's face when she knows that she has a home for the rest of her life to enjoy with the grandkids, and that it can be passed down to them without a bank involved, and with only property tax and insurance to keep up with.  I'm going to set up a trust to handle that soon.

I know that the value of that to me is significantly higher than the opportunity cost.  That's why I did it.

There is also the value of not having debt, in terms of flexibility in how I live, where I live, and how I spend my time and mental energy.  Those are very valuable to me, and directly relate to my mental health, and thus my physical health.  My sensitivity to that may well be a result of the childhood trauma of losing a house, but it is part of who I am.  Hah! I guess I'm doing some exposure therapy for that, with the short mortgage I had, and now I am opening a HELOC as a supplemental emergency fund.

Anyways, that's why I was so happy to join the club, twice 8^)

Dicey

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Re: Mortgage Payoff Club!!
« Reply #1585 on: April 30, 2018, 09:58:12 AM »
Woot!  I joined the club twice in the last three years!

For full disclosure, I own both of my houses outright.  One I bought in cash, the other I bought with a mortgage and paid off in just over a year.  I was lucky enough to sell a startup, so this was not a hardship nor did it require the kind of long-term dedication and perseverance that others have shown here.

When I was a teen, my family had our house foreclosed on.  This certainly makes the entire notion of owning a house an emotional issue for me, and I did NOT approach it in terms of optimizing financial outcomes, or the return I could have gotten from that money.  The first house is the one I live in with my wife.  The second one is a house I bought for my mother, and the family, in our hometown.  I was optimizing for peace of mind, and minimizing my monthly expenses -- aka health, resilience and security.

I knew the math -- I can guess how much I would have made had I put it into the market over the last couple years, WAY more than the 3.X interest rate on the two loans would have cost me in that time.  Would have recovered a chunk of the taxes I paid on that income, and it would still be growing now, faster than the market value of the two houses.

I knew it would add a year or two to my FIRE savings schedule.  But, I was planning working for a several more years anyways to ensure my team was established in the new company, and apparently to also build a new team and a new product!  Lastly, the golden handcuffs made it worthwhile to stick around.

It also made financial sense to diversify into real-estate, since all of my deferred compensation would be in stock.  Really tho, I don't consider the houses an investment.  I do consider it a diversification and risk mitigation -- and it comes with a pool!  Had I kept that money in the market, I would not get the diversification of assets.  The risk it mitigates is losing my income, our monthly nut, with both houses, is now smaller than DWs educator earnings.

I don't get the same satisfaction from looking at my VSTAX balance as I do from waking up in a house I own outright, and seeing my mother's face when she knows that she has a home for the rest of her life to enjoy with the grandkids, and that it can be passed down to them without a bank involved, and with only property tax and insurance to keep up with.  I'm going to set up a trust to handle that soon.

I know that the value of that to me is significantly higher than the opportunity cost.  That's why I did it.

There is also the value of not having debt, in terms of flexibility in how I live, where I live, and how I spend my time and mental energy.  Those are very valuable to me, and directly relate to my mental health, and thus my physical health.  My sensitivity to that may well be a result of the childhood trauma of losing a house, but it is part of who I am.  Hah! I guess I'm doing some exposure therapy for that, with the short mortgage I had, and now I am opening a HELOC as a supplemental emergency fund.

Anyways, that's why I was so happy to join the club, twice 8^)
Congratulations,verfrugal! I think your reasoning is very sound, given your circumstances. In fact, double congratulations!!

arebelspy

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Re: Mortgage Payoff Club!!
« Reply #1586 on: April 30, 2018, 10:27:06 AM »
MOD NOTE:

This thread is for celebrating mortgage payoffs.

Not for debating if one should pay off a mortgage, or not.

All posts regarding the merits of paying off a mortgage are off topic. Please find another, more appropriate thread to post these arguments in.

Cheers!


The above remains the case. Posts made arguing about whether or not you should pay off a mortgage will henceforth be deleted and result in temporary bans.

Feel free to post in other threads about why paying off the mortgage is mathematically sub-optimal. This thread one is for people who understand it may be sub-optimal, but are doing it anyways, and celebrating their paying down debt.

Please report any such posts violating this. Cheers!
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BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1587 on: April 30, 2018, 12:07:38 PM »
Woot!  I joined the club twice in the last three years!

...

There is also the value of not having debt, in terms of flexibility in how I live, where I live, and how I spend my time and mental energy.  Those are very valuable to me, and directly relate to my mental health, and thus my physical health.  My sensitivity to that may well be a result of the childhood trauma of losing a house, but it is part of who I am.  Hah! I guess I'm doing some exposure therapy for that, with the short mortgage I had, and now I am opening a HELOC as a supplemental emergency fund.

...

Anyways, that's why I was so happy to join the club, twice 8^)

Congratulations @verfrugal!  That is extremely motivating to me.  I, too, am using my personal and rental residence as a way to diversify.  I don't invest in REITs, so my vast property holdings (all one and a half of them) represent that portion of my portfolio.  I'm also trying to reduce expenses post-FIRE, so I can avoid capital gains taxes in some years (I know it won't be possible every year).

On a personal note, congratulations on being able to take care of your mom.  Great karma right there!  :) 

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1588 on: April 30, 2018, 12:21:47 PM »
Another $4k hit to the principal balance, now under $90k!

Great job! It's in the sub $100K now where things start to pick up speed.

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1589 on: May 01, 2018, 04:40:04 AM »
Another $4k hit to the principal balance, now under $90k!

Great job! It's in the sub $100K now where things start to pick up speed.

Yep!  And when the balance gets lower you start to find ways to pay it off even quicker!  Great job Birdman!

birdman2003

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Re: Mortgage Payoff Club!!
« Reply #1590 on: May 01, 2018, 07:53:38 AM »
Thanks for the encouragement.  It would be awesome to pay it off in 2018 but we definitely want it gone by this time next year.

littlelykke

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Re: Mortgage Payoff Club!!
« Reply #1591 on: May 01, 2018, 08:49:37 AM »
We collected our change for the last 4 months in an old jam jar. When I counted it today, it was 300 euros. Used it to make an extra payment on our mortgage. The result: 30 euros off our monthly payments. Permanently. Yeah! Small steps. But we'll get there.

frizzywhiskers

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Re: Mortgage Payoff Club!!
« Reply #1592 on: May 03, 2018, 08:51:53 PM »
May update.....$59,575.... waiting patiently for husbands bonus to come in.  21 more weeks at max until payoff - hopefully less. 

Money Badger

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Re: Mortgage Payoff Club!!
« Reply #1593 on: May 03, 2018, 09:13:56 PM »
Way to go @frizzy and carry on!   Our situation sounds similar (now down to $44K as of 5/1 and hoping for a good bonus late June to really accelerate towards the goal line).   It's GO time!

Megs193

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Re: Mortgage Payoff Club!!
« Reply #1594 on: May 04, 2018, 04:32:26 PM »
For those of you who stared with larger mortgage balances, how did you stay motivated in the beginning?  Our current balance is 493k so even if I pay an extra 2,000 a month I am still 10 years away from paying it off.  Did you set mini goals or just put a set amount towards it every month and forget about it? 

couponvan

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Re: Mortgage Payoff Club!!
« Reply #1595 on: May 04, 2018, 04:59:27 PM »
For those of you who stared with larger mortgage balances, how did you stay motivated in the beginning?  Our current balance is 493k so even if I pay an extra 2,000 a month I am still 10 years away from paying it off.  Did you set mini goals or just put a set amount towards it every month and forget about it?

Mostly we did a set amount extra each month that would take us to 10 years max (with a 30 year mortgage), and then as our EFund grew over $5K more than our planned amounts we moved chunks over at a time.  Bonus payments were the main mortgage kicker for us. I think it took a little over 5 years to pay off the mortgage. 

We don't include bonuses in our monthly spending/saving budget, so when they come we can put all of them to goals. DH's bonus can be 30-60% of his salary, so it's a big chunk that varies from year to year. Big enough of a chunk that I don't want an EMERGENCY just because he didn't get a bonus that we got used to spending.

BlueHouse

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Re: Mortgage Payoff Club!!
« Reply #1596 on: May 04, 2018, 05:56:59 PM »
For those of you who stared with larger mortgage balances, how did you stay motivated in the beginning?  Our current balance is 493k so even if I pay an extra 2,000 a month I am still 10 years away from paying it off.  Did you set mini goals or just put a set amount towards it every month and forget about it?
I put $2k extra toward my loan too and it seems too slow too.  And every once in a while I get a big distribution from my company (I think of it like a bonus) and rather than putting it into my investments, I put it toward the house.  Better than spending it on furniture or a car though.  I am really aiming to get under $130k, then I'll forget about it.  But until then, I'm itching to get it paid. 

Money Badger

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Re: Mortgage Payoff Club!!
« Reply #1597 on: May 04, 2018, 07:10:18 PM »
@Megs193,  I remember the "the debt is too big, so why bother" early days...   The banks rely on this psychological response to keep you a slave paying them to stay in business for doing nothing other than letting you borrow someone else's equity.   Like BlueHouse said, it's a combination of discipline "chipping away" and then those chances to put "big chunks".    While the math remains constant, the change really happens once you reach 50% through the debt...  At that point, psychology kicks in and you just believe and find ways to kill the mortgage.   Selling things, reducing expenses to pay principal, increasing income, you name it.  It's not a number, it's believing... every blessed day.   

Trifele

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Re: Mortgage Payoff Club!!
« Reply #1598 on: May 05, 2018, 05:58:52 AM »
@Megs193 -- I used a strategy similar to the others.  I set a minimum number each month for the extra payment, and then also threw any extra chunks/windfalls/bonuses at it.  The third thing I did was play mental games with myself, trying to get below a certain number. So say if my balance was 193k, and my monthly minimum extra payment would have gotten me to $190,800, I would find a little extra to throw at it to get it below 190k, just so I could see that 8 on my balance. Then when I chewed it down to say $184k, I would find some way to throw a little extra at it, so I could get below $180, and see that delicious 7

It was kind of like the strategy long distance runners use when they are struggling -- looking for shorter-term goals, rather than the far goal.  "I don't feel great right now, and I don't know if I can run another 10 miles.  But I know I can run one more mile, so I'll just do that and then see how I feel."  Rinse and repeat.

Good luck! You will get there.
« Last Edit: May 05, 2018, 06:25:50 AM by Trifele »

aperture

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Re: Mortgage Payoff Club!!
« Reply #1599 on: May 05, 2018, 06:19:23 AM »
@Megs193
...It was kind of like the strategy long distance runners use when they are struggling -- looking for shorter-term goals, rather than the far goal.  "I don't feel great right now, and I don't know if I can run another 10 miles.  But I know I can run one more mile, so I'll just do that and then see how I feel."  Rinse and repeat.

Yes - I love this advice.  An unfortunate side effect of understanding how to plan, and use a spreadsheet is that you can make life look super predictable and the monthly or q2 week deposits into the mortgage can seem like they have no impact at all.  I would encourage you to not look at the end - you will burn yourself out. Look at 3 months or 6 months or a year and make it a game. Maybe your minimum payments would get you to $480K this year and your expected extra payments will get you to $460K.  Make it a personal challenge to find a way to get to $450.  Look for the proverbial nickels in the couch, side hustle, room mate, bike to work, skip the lunch the coffee, sell it on eBay - do something to shake a few extra $s loose to throw at the mortgage.

If that does not appeal, then I would find a way to execute your mortgage plan on auto-pilot without ever having to look at a statement again. Again - the bottom line is refocus your attention away from the date 10 years from now when you are out from under that loan.  You have to live now and cannot defer living until then. 

BTW - I have done a bad job of following my own advice.  In the last three years, I have had a calendar spreadsheet at work where I counted down the days, weeks, mondays, mortgage payments, 403b contributions, pension accumulation, etc etc etc ad nauseam until June 29, 2018 when I FIRE. Best weeks of that time has been when I never looked at the calendar and just put my head into the work. Worst weeks were surprisingly last Fall when the last 5% of my working life seemed to stretch out like a WW1 battlefield - ready to sink me in mire and crush me.  It was a slog and I counted down to Thanksgiving, then counted down to Christmas then to a Spring vacation, then 25 day increments (almost to 50 days now...). Still counting, but THE DAY grows near. 

Best wishes, aperture.