Author Topic: Paid Off Mortgage  (Read 2960 times)

domo

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Paid Off Mortgage
« on: August 22, 2019, 02:48:18 PM »
This is the only place I can really say this. If anyone in our real lives found out, they would not understand, or take it the wrong way. I am so excited. This has been a goal of ours for so long. Now we are truly debt-free. Is there anything we should do now, aside from continuing to save money? We have alerted the escrow company and made arrangements to pay the ongoing taxes and insurance ourselves. Is there anything else? We are supposed to be able to get the deed or a 'release of lien' from city hall, but I don't know how to go about it.

EngagedToFIRE

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Re: Paid Off Mortgage
« Reply #1 on: August 22, 2019, 03:15:44 PM »
All that stuff just happened automagically for me.  Mortgage lender sent us the escrow check and a release without us doing anything other than paying off the mortgage.

Congrats on your achievement, it feels REALLY good.  And now you take that money and invest like CRAZY.

Brianmcg321

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Re: Paid Off Mortgage
« Reply #2 on: August 22, 2019, 03:52:53 PM »
Way to go!!!!

The grass in the yard feels a lot different on your feet now doesn't it.

Now you can really start stashing away your income!

I-Ranger

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Re: Paid Off Mortgage
« Reply #3 on: August 22, 2019, 04:13:26 PM »
Congrats!!!! Getting rid of that debt truly is awesome!!!!




*The following disclaimer is in no way meant to diminish your accomplishment, but is simply for educational purposes for any newcomers who may not be aware yet:

Disclaimer: While pre-paying your mortgage may feel good, in the US, it is often a suboptimal financial decision that can delay FIRE while putting you at greater risk of losing your home during the pre-payment period. It is strongly encouraged that you do the math on your own situation to have a full understanding before making such a major financial decision.

MMM, who paid off his mortgage, had this to say: "...I will grudgingly admit that you will probably do much better investing in Index funds rather than paying off your mortgage."

Here is an excellent educational thread on the subject: https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/


MOD NOTE: Please don't bring others down for the sake of "math." There are plenty of other threads to discuss paying off a mortgage or investing. It doesn't need to be in a celebration thread.
« Last Edit: September 03, 2019, 01:53:24 PM by arebelspy »

EngagedToFIRE

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Re: Paid Off Mortgage
« Reply #4 on: August 22, 2019, 04:17:58 PM »
I can only imagine what this moron just posted....  I-Ranger, fuck right off.

MOD EDIT: Not the right way to handle it. Just report posts you think are inappropriate to the mods. Cheers!
« Last Edit: August 26, 2019, 10:59:30 AM by arebelspy »

Kronsey

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Re: Paid Off Mortgage
« Reply #5 on: August 22, 2019, 04:28:10 PM »
I can only imagine what this moron just posted....  I-Ranger, fuck right off.

I only read these new mortgage threads just to see which moron is going to post the typical "sub optimal strategy" BS.

And unfortunately it seems there are just as many idiots on the "pay off the mortgage ASAP". Both groups seem like a religious cult.

I think it is great to educate people on the potential downfalls of either strategy, but a thread like this is clearly a celebration and "education" isn't needed nor is it appropriate IMHO.

Good on you, OP! I hope to join you in complete debt freedom before pulling the plug myself.

EngagedToFIRE

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Re: Paid Off Mortgage
« Reply #6 on: August 22, 2019, 04:31:15 PM »
I can only imagine what this moron just posted....  I-Ranger, fuck right off.

I only read these new mortgage threads just to see which moron is going to post the typical "sub optimal strategy" BS.

And unfortunately it seems there are just as many idiots on the "pay off the mortgage ASAP". Both groups seem like a religious cult.

I think it is great to educate people on the potential downfalls of either strategy, but a thread like this is clearly a celebration and "education" isn't needed nor is it appropriate IMHO.

Good on you, OP! I hope to join you in complete debt freedom before pulling the plug myself.

Correct.  Nobody needs a fake moderator to decide to post disclaimers on celebratory threads.  I didn't actually click on it, but I'm pretty sure that's exactly what happened.  I have the idiot on my ignore list.

In fact:

HELPFUL INFORMATION:  To ignore annoying troll turds who shit all over celebrations.  Go to your profile --> Account Settings --> Buddies/Ignore List --> Edit Ignore List --> Add I-Ranger

SwordGuy

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Re: Paid Off Mortgage
« Reply #7 on: August 22, 2019, 04:35:54 PM »
This is the only place I can really say this. If anyone in our real lives found out, they would not understand, or take it the wrong way. I am so excited. This has been a goal of ours for so long. Now we are truly debt-free. Is there anything we should do now, aside from continuing to save money? We have alerted the escrow company and made arrangements to pay the ongoing taxes and insurance ourselves. Is there anything else? We are supposed to be able to get the deed or a 'release of lien' from city hall, but I don't know how to go about it.

First of all, congrats!    It takes some good decisions and stickitoitivity to make that happen.   Well done!

Second, the paperwork should follow automatically after the mortgage is paid off.   But it's best to check about a month afterward.   In the US, in the various states I've ever checked this in, it's a function of the country government and often called the County Registrar of Deeds.    They may have an online website that will let you verify the lien was released.    If not, you'll need to call or visit them.    (In other countries I have no idea what govt agency would keep track of this.)

Third, if your friends and family wouldn't be happy for you at paying off your mortgage, you need better quality friends.   (Family too, but that's harder to change. )  :)     

macmoneysaver

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Re: Paid Off Mortgage
« Reply #8 on: August 22, 2019, 07:36:57 PM »
I agree with SwordGuy.  The mortgage company notifies register of deeds of the payoff and the rest follows from there.  A month is about the typical time you should get notice.

Congrats on paying it off.  I see you got a few of the disclaimers about investing being a better approach.  But here are two key points that most people don't mention (they apply to me too, as I just paid off my mortgage). First, I eliminated a $2000/month payment by paying off my house, and THAT is what enabled me to retire early.  It is about cash flow.  I would need an extra $600,000 in investments just to cover the mortgage.  Now without the mortgage, I can retire on my current investments.  So I actually retire earlier (not as much wealth accumulation, but better cash flow).  Second, a paid off house offers flexibility, you can still use the equity by HELOC or refinance to buy rental properties if you want.  So it provides flexibility and options--or just peace of mind.

Good for you-all the best.

Malcat

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Re: Paid Off Mortgage
« Reply #9 on: August 23, 2019, 04:50:38 AM »
I agree with SwordGuy.  The mortgage company notifies register of deeds of the payoff and the rest follows from there.  A month is about the typical time you should get notice.

Congrats on paying it off.  I see you got a few of the disclaimers about investing being a better approach.  But here are two key points that most people don't mention (they apply to me too, as I just paid off my mortgage). First, I eliminated a $2000/month payment by paying off my house, and THAT is what enabled me to retire early.  It is about cash flow.  I would need an extra $600,000 in investments just to cover the mortgage.  Now without the mortgage, I can retire on my current investments.  So I actually retire earlier (not as much wealth accumulation, but better cash flow).  Second, a paid off house offers flexibility, you can still use the equity by HELOC or refinance to buy rental properties if you want.  So it provides flexibility and options--or just peace of mind.

Good for you-all the best.

You would only need an extra 600K if your outstanding mortgage was 600K.

domo

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Re: Paid Off Mortgage
« Reply #10 on: August 23, 2019, 07:47:28 AM »
Malkynn, I believe macmoneysaver is referring to the 4% rule, and how you would need $600,000 in investments to afford a $2000/month expense in perpetuity (of course in 15-30 years you will eventually pay it off, but few people outside of our little movement expect to live more than 30 years in retirement).

In addition to the desire to be debt-free, we paid the house off to reduce our monthly expenses. I am about to leave my job to hike the Appalachian Trail. I am experiencing severe burnout. I am hoping the hike will help. We are cutting expenditures so that we won't cut into our savings while I am gone.

Malcat

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Re: Paid Off Mortgage
« Reply #11 on: August 23, 2019, 08:22:06 AM »
Malkynn, I believe macmoneysaver is referring to the 4% rule, and how you would need $600,000 in investments to afford a $2000/month expense in perpetuity (of course in 15-30 years you will eventually pay it off, but few people outside of our little movement expect to live more than 30 years in retirement).

In addition to the desire to be debt-free, we paid the house off to reduce our monthly expenses. I am about to leave my job to hike the Appalachian Trail. I am experiencing severe burnout. I am hoping the hike will help. We are cutting expenditures so that we won't cut into our savings while I am gone.

Yeah, except if you are talking about a 30 year mortgage that is taken out right when the person retired, then it's a completely different conversation.

Most people start their mortgages years before retiring, and then they end. No matter what, the person does not ever need to save more than the remaining balance of the mortgage. So unless the remaining mortgage is 600K, then the person absolutely does not need to have an extra 600K in retirement to cover their mortgage payments.

That's literally all I'm saying.
I will not engage further on the value of paying off the mortgage as OP specifically asked not to.

Brother Esau

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Re: Paid Off Mortgage
« Reply #12 on: August 23, 2019, 08:58:38 AM »
I am about to leave my job to hike the Appalachian Trail.

Very exciting, good luck. Starting kinda late in the season, no?

domo

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Re: Paid Off Mortgage
« Reply #13 on: August 23, 2019, 10:10:30 AM »
I guess "about to" is relative, lol. I plan on quitting in December and starting my hike in March.

A Fella from Stella

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Re: Paid Off Mortgage
« Reply #14 on: August 23, 2019, 12:03:26 PM »
This is so cool, but I can't congratulate you right now because I have to yell at other people who said things about costs and benefits of paying off your home.

GIANT RAGE WORDS.
Thank goodness I was here.

ecchastang

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Re: Paid Off Mortgage
« Reply #15 on: August 23, 2019, 02:40:38 PM »
Congrats!

Focus_on_the_fire

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Re: Paid Off Mortgage
« Reply #16 on: August 23, 2019, 03:15:54 PM »
Congrats! That's fantastic. Time for a Happy Dance.

Kris

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Re: Paid Off Mortgage
« Reply #17 on: August 23, 2019, 04:36:40 PM »
Awesome! Congratulations! We paid ours off almost a year ago. Feels good, doesn’t it?

Josiecat

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Re: Paid Off Mortgage
« Reply #18 on: August 23, 2019, 08:56:50 PM »
Wow!  Good job OP.  So happy for you.

AnxietyFly

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Re: Paid Off Mortgage
« Reply #19 on: August 24, 2019, 12:58:08 AM »
nice job. I am jealous!

Zamboni

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Re: Paid Off Mortgage
« Reply #20 on: August 24, 2019, 01:28:21 AM »
Congratulations, domo!

pegleglolita

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Re: Paid Off Mortgage
« Reply #21 on: August 26, 2019, 01:20:53 PM »
Congrats!  I think we are about to push for this since we want to FIRE in about 5-6 years and 4% (almost) risk-free is very appealing when compared to the uncertainty of the market in the short-term.

BlueHouse

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Re: Paid Off Mortgage
« Reply #22 on: August 26, 2019, 02:14:17 PM »
Congratulations domo!  I'm sorry you can't tell anyone in real life, but I certainly understand it.  I wouldn't either! 

Next?  celebrate it and then report back here how long that feeling lasts.  I imagine it lasts a long long time.


EngagedToFIRE

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Re: Paid Off Mortgage
« Reply #23 on: August 26, 2019, 04:43:46 PM »
Congrats!  I think we are about to push for this since we want to FIRE in about 5-6 years and 4% (almost) risk-free is very appealing when compared to the uncertainty of the market in the short-term.

I think that's a great idea.

JSMustachian

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Re: Paid Off Mortgage
« Reply #24 on: August 27, 2019, 02:12:32 PM »
Congratulations on paying off the mortgage!

While I understand more money could be made potentially by investing instead, we plan to have our mortgage paid off before we FIRE as well. Everyone's situation is different. For my family we think not having a mortgage will offer greater flexibility and lessen the amount we need to withdraw for tax/subsidies purposes.

DeniseNJ

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Re: Paid Off Mortgage
« Reply #25 on: August 27, 2019, 02:32:03 PM »
Congrats!  I think we are about to push for this since we want to FIRE in about 5-6 years and 4% (almost) risk-free is very appealing when compared to the uncertainty of the market in the short-term.

I think that's a great idea.

That's interesting.  I guess if you are thinking short term and the alternative is to park your funds in a CD, then paying off your mortgage is a good route.  It still worries me a bit though since it isn't risk free--the bank can take your house whether you owe 500K or 5K once you have trouble making payments.  But putting cash in CDs and paying all at once when you have the money presents a risk of such low returns over the next few years.  But you'd still have the dough.  Hard decision.

I do expect to FIRE with no mortgage but I plan on renting.  I would love to be totally debt free.  Congrats to OP!
« Last Edit: August 27, 2019, 02:35:34 PM by DeniseNJ »

TVRodriguez

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Re: Paid Off Mortgage
« Reply #26 on: August 27, 2019, 02:32:38 PM »
Congratulations, domo!  It's been a few years since we paid off our mortgage, and we love not having debt.  Enjoy hiking the Appalachian Trail!

EngagedToFIRE

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Re: Paid Off Mortgage
« Reply #27 on: August 27, 2019, 05:21:09 PM »
Congrats!  I think we are about to push for this since we want to FIRE in about 5-6 years and 4% (almost) risk-free is very appealing when compared to the uncertainty of the market in the short-term.

I think that's a great idea.

That's interesting.  I guess if you are thinking short term and the alternative is to park your funds in a CD, then paying off your mortgage is a good route.  It still worries me a bit though since it isn't risk free--the bank can take your house whether you owe 500K or 5K once you have trouble making payments.  But putting cash in CDs and paying all at once when you have the money presents a risk of such low returns over the next few years.  But you'd still have the dough.  Hard decision.

I do expect to FIRE with no mortgage but I plan on renting.  I would love to be totally debt free.  Congrats to OP!

Why would the bank take the house?  If you have been aggressively paying down the mortgage, you would very likely have substantial equity.  If there are no other options, well, you just sell the house and cash out.  But that's not really the strategy I would use.  I always suggest investing the funds and when you have enough money in your investments and want to pay off your house, go for it, in a lump sum.  And do it during a bull market.  If it's a bear market, keep making payments and wait it out.  But yeah, I'm in the "lump sum" camp for POYM.  Though really, I am also in the "there is no right answer, as both paying off and not paying off can be correct answers for different people" camp...  As MMM himself says (paraphrasing) - let's just celebrate because paying off a house is not a bad way to spend your money.

kanga1622

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Re: Paid Off Mortgage
« Reply #28 on: August 28, 2019, 07:59:57 AM »
Congrats! We paid ours off in May and it has been wonderful. We redirected that payment to our own "escrow" of sorts to cover taxes, insurance, and repairs. Once we hit our threshold in that account, we will beef up retirement and college savings for the kids. But it is a big relief to know that we could stretch our savings much further if we had to survive on one paycheck or some other unexpected financial hit.

DeniseNJ

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Re: Paid Off Mortgage
« Reply #29 on: August 28, 2019, 08:40:19 AM »
Congrats!  I think we are about to push for this since we want to FIRE in about 5-6 years and 4% (almost) risk-free is very appealing when compared to the uncertainty of the market in the short-term.

I think that's a great idea.

That's interesting.  I guess if you are thinking short term and the alternative is to park your funds in a CD, then paying off your mortgage is a good route.  It still worries me a bit though since it isn't risk free--the bank can take your house whether you owe 500K or 5K once you have trouble making payments.  But putting cash in CDs and paying all at once when you have the money presents a risk of such low returns over the next few years.  But you'd still have the dough.  Hard decision.

I do expect to FIRE with no mortgage but I plan on renting.  I would love to be totally debt free.  Congrats to OP!

Why would the bank take the house?  If you have been aggressively paying down the mortgage, you would very likely have substantial equity.  If there are no other options, well, you just sell the house and cash out.  But that's not really the strategy I would use.  I always suggest investing the funds and when you have enough money in your investments and want to pay off your house, go for it, in a lump sum.  And do it during a bull market.  If it's a bear market, keep making payments and wait it out.  But yeah, I'm in the "lump sum" camp for POYM.  Though really, I am also in the "there is no right answer, as both paying off and not paying off can be correct answers for different people" camp...  As MMM himself says (paraphrasing) - let's just celebrate because paying off a house is not a bad way to spend your money.
Totally agree on each and every point.  I just meant that if you lose your job or some other costly tragedy and can't make payments then you have a problem.  You can't always "just sell" a house.  If we are headed for a recession, you lose your job, no one is buying, you could lose your house no matter how much equity you have in it--also a problem if you are in stocks since you don't want to sell low.  Whereas if you have your cash in CDs (since it's short term) then you can pay off at once when you have enough and if you run into problems you still have the cash.  Just options to consider but no right answer.  I lean towards buying a house outright bc I really hate debt, but that's bc of my history.  Love to hear when ppl pay off the house--such an accomplishment!