Author Topic: No debt left except mortgage :)  (Read 1628 times)

rulesofacquisition

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No debt left except mortgage :)
« on: January 22, 2018, 10:24:30 AM »
OK, so I'm a bit late to the Mustachian party, but we had an opportunity to pay our last debt besides the mortgage for 50 cents on the dollar, and since we actually have money in savings (a relatively new thing for us) we were able to take advantage of the offer. The next goal is a rental, and to get the mortgage on our residence paid by summer of 2022. Thanks Mustachians!

BiggerFishToFI

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Re: No debt left except mortgage :)
« Reply #1 on: January 22, 2018, 10:35:22 AM »
Badass!

Still have about 65k on top of our mortgage of student loan / vehicle debt, but decreasing rapidly since discovering MMM!

One thing you might want to look into is aggressively paying down your rental mortgage instead of your primary which may be more tax advantaged.

LessIsLess

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Re: No debt left except mortgage :)
« Reply #2 on: January 22, 2018, 11:54:39 AM »
OK, so I'm a bit late to the Mustachian party, but we had an opportunity to pay our last debt besides the mortgage for 50 cents on the dollar, and since we actually have money in savings (a relatively new thing for us) we were able to take advantage of the offer. The next goal is a rental, and to get the mortgage on our residence paid by summer of 2022. Thanks Mustachians!

You're doing it wrong.  (Sorry if it hurts your feelings.)

Good real estate returns come from leverage.  Put a small amount down, and borrow the rest.  Fully paying off your mortgage, especially if the rate is low, removes that leverage.

The amount to pay off your primary mortgage, could be used to buy a rental today.  Now you control 2 houses with the same equity (cash).  If you wait 4 more years to buy, you will likely pay more for your rental.

As always, make sure you buy a cash flow positive rental, and have some emergency fund to cover random expenses.  Also, while leverage can juice the returns, keep it under control. 

rulesofacquisition

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Re: No debt left except mortgage :)
« Reply #3 on: January 22, 2018, 12:16:28 PM »
I had planned on putting only the minimum down and taking a 30 year loan for the rental(s) - I don't own one yet, plan on buying the first later this year. For the personal house I took out the mortgage in 2014 for 30 years, but have paid based on 15 years. I had planned on paying lump sums to pay it faster than that. I see the point of leverage, but am worried about carrying debt on my personal house. I am 50 and getting a late start if that makes a difference.

Dicey

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Re: No debt left except mortgage :)
« Reply #4 on: January 22, 2018, 12:35:54 PM »
Read the first chapter of this old gem, "Ordinary People, Extraordinary Wealth". It's dated, but it has the best explanation of the advantages of not paying off a mortgage I've ever seen. I found a copy at my library's book sale last weekend, so I just re-read it myself. Your library should have it or buy a cheap used paperback copy from Amazon.

Also, you might spend a little time over on this raucous thread:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/

Also, how were you able to settle your debt for less than you owed?

Cezil

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Re: No debt left except mortgage :)
« Reply #5 on: January 22, 2018, 12:39:38 PM »
OK, so I'm a bit late to the Mustachian party, but we had an opportunity to pay our last debt besides the mortgage for 50 cents on the dollar, and since we actually have money in savings (a relatively new thing for us) we were able to take advantage of the offer.

Congratulations, that is awesome!  :)  I'm so close to being down to just the mortgage, too, and I can't. wait. !!  It must feel awesome!

rulesofacquisition

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Re: No debt left except mortgage :)
« Reply #6 on: January 23, 2018, 12:25:21 PM »
Read the first chapter of this old gem, "Ordinary People, Extraordinary Wealth". It's dated, but it has the best explanation of the advantages of not paying off a mortgage I've ever seen. I found a copy at my library's book sale last weekend, so I just re-read it myself. Your library should have it or buy a cheap used paperback copy from Amazon.

Also, you might spend a little time over on this raucous thread:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/

Also, how were you able to settle your debt for less than you owed?

I will check out the thread - I have fear issues attached to debt and money so I want to make sure I'm making wise decisions.

The debt was to an attorney, and the settlement was offered after we made payments for years (and had years to go).

fmzip

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Re: No debt left except mortgage :)
« Reply #7 on: January 23, 2018, 01:10:07 PM »
Read the first chapter of this old gem, "Ordinary People, Extraordinary Wealth". It's dated, but it has the best explanation of the advantages of not paying off a mortgage I've ever seen. I found a copy at my library's book sale last weekend, so I just re-read it myself. Your library should have it or buy a cheap used paperback copy from Amazon.

Also, you might spend a little time over on this raucous thread:
https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/

Also, how were you able to settle your debt for less than you owed?

I will check out the thread - I have fear issues attached to debt and money so I want to make sure I'm making wise decisions.



Fear of debt isn't necessarily a bad thing. I'm 51, just bought a new home took out a 30 year mortgage and used just 20% down of the sale of our home and safely banked the rest.

Trust me, I am not planning to hold this note til 81 nor do I want the headache/anxiety/fear of a rental and another mortgage with just a handful of working years left

It's not a once size fits all solution. It's an idea/option to leverage. With any leverage there is risk.