Author Topic: A reason to pay off the mortgage?  (Read 2543 times)

jrhampt

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A reason to pay off the mortgage?
« on: June 12, 2013, 11:20:54 AM »
I've been thinking about this a bit lately as my husband and I seem to be surrounded by family and friends who are bad with money.  We both provide varying degrees of support to broke parents (so far not too bad, but I see this potentially increasing in the future).  Given this situation, I feel more urgency to pay down the mortgage and lock money away in the house - this has the advantage of making it inaccessible, so less temptation to give the money away while we are still in debt (mortgage is only debt, but still a debt!), and secondly ensuring that we eliminate our largest expense in the future, giving us more flexibility.  Sort of my version of putting on your own gas mask first.  Anyone else feel this way?

tomsang

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Re: A reason to pay off the mortgage?
« Reply #1 on: June 12, 2013, 11:34:48 AM »
If that is what it takes you to reduce spending then I think it is a great idea. If you can max out your   401k, Roth, IRA and investment accounts and tell yourself and family that you don't have any extra cash to spend then you will be better off investing and not paying off the mortgage.


DaftShadow

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Re: A reason to pay off the mortgage?
« Reply #2 on: June 12, 2013, 12:38:09 PM »
I really liked the suggestion about maxing your retirement funds first (401(k), roth, etc.), since cash will likely earn you more return, and it's easy to say "we can't pull out the money without paying huge penalties, I'm sorry dad/mom".  The further you can remove the value from being "cash" (aka investing it), the easier it will be to think with your head. 

That being said, I've heard worse reasons to pay off a mortgage...  if you know you need to lock away money so you won't be tempted, buying an asset is better than going to the bar.  :)

~ DaftShadow

jrhampt

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Re: A reason to pay off the mortgage?
« Reply #3 on: June 12, 2013, 12:54:09 PM »
Of course, we are already maxing tax-deferred options first (and contributing substantially to after-tax investments).  It would not make sense to consider paying off the mortgage otherwise, since those are nicely locked up also. 

DoubleDown

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Re: A reason to pay off the mortgage?
« Reply #4 on: June 12, 2013, 04:02:29 PM »
Anyone else feel this way?

No, I don't feel that way! But I see what you're getting at. I'm a heartless bastard that would be hard pressed to bail out broke family members unless they were really on desperately hard times through absolutely no fault of their own, and not just failure to save for hard times. I wouldn't feel the need to hide away assets so they were unavailable to broke family members. I make all personal finance decisions like this based on what I think will make/save the most money for my own household, period. I'd open my home to them, though, within reason, to get them through a rough patch.

Cinder

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Re: A reason to pay off the mortgage?
« Reply #5 on: June 13, 2013, 10:30:07 AM »
Anyone else feel this way?

No, I don't feel that way! But I see what you're getting at.

...

 I'd open my home to them, though, within reason, to get them through a rough patch.

Ditto.. I'd provide the guest room, food on the table, but finances are a separate mater.  I'd give them guidance, but not direct 'help'.