Comments on: An Epiphany on Home Ownership! (D’uh)

By: J. Money

J. Money — Sun, 29 Jan 2012 02:25:38 +0000

It sure would! I’d probably just save my a$$ off for the next year or two right after paying it off (can you imagine how much faster it would add up?) and then right after “retire” ;) I’d still physically do stuff, of course, since I’d only be like 40 by that time, but I wouldn’t work as much or as fast and I’d concentrate on just the projects that truly matter to me. Whether they made much money or not. That would be total financial freedom in my eyes – working as much, or as little, as I’d want with no serious repercussions either way. Only 9 more years to go! :)

By: Leigh

Leigh — Sat, 28 Jan 2012 19:11:30 +0000

Awesome!!! What do you think that you will do with that extra cash flow each month? You’ll still have property taxes to pay and I would still have HOA dues to pay. I’m sure by the time I actually would have my condo paid off, $1,100 per month would seem like piddly-squat, but it would still be pretty awesome to have that extra cash flow back each month!

By: J. Money

J. Money — Mon, 16 Jan 2012 15:27:24 +0000

Haha, but damn – that sure is a good plan though! I wonder why you can only pay off $30k maximum on the place each year? It’s a mortgage stipulation? Never seen that before… if you lived closer, I’d come over and start feeding your DH some beers ;) That usually helps loosen us guys up, haha… Keep us updated!

By: JMK

JMK — Sun, 15 Jan 2012 16:02:59 +0000

It’s my dream to sell our place in 8 years when our youngest is off to college/university. We intend to have the mortgage paid off in the next ~3-5yrs – at the moment we have $150k left on the mortgage and the house is worth around $550k. We pay every two weeks (26 pmts/yr rather than 24 on a bimonthly plan) which knocked several years off, we also have our regular payment rounded up to the next even $100, and every year we try to make a minimum of $12k in extra payments. The maximum extra we are allowed to pay each year is about $30k. We’ve yet to hit that, but no harm in trying.
When we built this place we fully intended it to be our forever house. Now my priorities have changed and I just see the growing equity and how it would mean a massively earlier retirement. Even without the mortgage our taxes and utilities come to almost $1k/month. Then there is insurance, maintenance etc etc. and with just two of us here the place will seem way too big. I’d far rather take that $1k/mth and rent a nice appartment (utilities incl) and turn that massive pile of equity into our retire early and travel budget. We have already saved enough to fund our retirement from 65 onward, so now it’s all about how much earlier we can get out. My DH is still committed to living here forever regardless of the tradeoffs, so there I still have work to do!

By: J. Money

J. Money — Thu, 12 Jan 2012 23:50:56 +0000

@jack foley – That would be the dream! Should be a damn good day when it’s been completed too :)
@The Frugallery – Exactly. Can you imagine what your expenses would look like w/out a mortgage or rent? Crazy.
@Brendan – I like it! Great idea indeed. Right now I just keep checking our “recent transactions” on our HELOC (where all my extra payments are going right now) and love seeing the “$2000.00” decrease every month ;) It shows up 4 times so far since I’m 4 for 4, baby! Woo! Might try out your idea next, I dig that.

By: Brendan

Brendan — Thu, 12 Jan 2012 14:47:31 +0000

Nice work J Money! When you’re doing things right, it’s amazing how surprises tend to turn out positive :)

To those who say put all your extra money in savings/retirement/investments:
Paying down your mortgage has such a positive impact on your emotions that it has to be accounted for when you do a “pay down mortgage” vs. “invest every extra penny” comparison.

It’s not as black and white as comparing the average annualized rate of return of the S&P 500 vs the average appreciation of a house. There is way more to it than that. The emotional return of seeing your mortgage balance decrease every moth is enough to keep lots of people on track with their financial goals. Also, the fact is that most Americans don’t have the discipline to invest extra money.

If you want a good way to visualize the affects of paying down your mortgage, make an excel spreadsheet of your mortgage balance every month (most mortgage companies let you downloand this data so you actually don’t have to manually input anytihng). Then, in the column next to that, put in your estimated home value (Zillow is accurate in my area, but for those areas where it’s not just use your appriased value like J$).

Insert a line chart that includes the mortgage balance on one line and the estimated home value on the other. Believe me, it is GREAT to visually see that mortgage balance go down while your home value (hopefully!) remains level/goes up slightly.

By: The Frugallery

The Frugallery — Thu, 12 Jan 2012 11:54:44 +0000

If you live in the house for a long time the payback when you sell could be huge. I know it’s hard to remember that right now, but over a long period of time the value should (on average) go up. We are renting currently and planning on buying at the end of this year. We want to pay it off as soon as possible so when we retire we do not have any housing costs.

By: jack foley

jack foley — Thu, 12 Jan 2012 09:00:39 +0000

Yea, i think it should be a goal for every couple to pay off their mortgage on their home as quickly as possible..

your home is not an asset – its a liability and you will always need somewhere to live so you might as well pay it off as soon as you can..

Jack

By: J. Money

J. Money — Thu, 12 Jan 2012 01:20:51 +0000

@Kacie – Well congrats, my friend :) That’s exciting! It seems like you really put a lot of thought, and planning, into this decision which is SUPER important. You beat me in that department by a good 500%, well done ;)
@cashflowmantra – YES! That’s what we’d do too – I’m not looking to expand bigger at all. Though I have to still run that by the Mrs, haha…
@PKamp3 – Haha, that would be one super sexy account ;) I’d imagine that by the time I reach that point though, my mission to stop working for money would kick in pretty good. Unless I’ve mastered the art of passive income by then! THAT would be perfect world scenario ;)
@Tiffany – Awww, well for an amateur you’re doing well for yourself already becoming a landlord! That’s great :) I’d love to be in your shoes, hehe… as far as stocks vs real estate, etc, though, all that matters really is that you’re *comfortable* with however you’re spending/investing/saving your money. Some people like one area over the other, but there isn’t a right answer except for going with what you’re cool with. So I’d say you’re on the right track, congrats! Keep up the learning too :)
@Stephanie – YUP! That last part is the one main thing, really, keeping me IN this house right now – the fact that you could really be mortgage-free in the near future! I love it. I don’t want to be forced to work anymore if I don’t want to. I know that may sound naive, or stupid, or whatever, but it’s a dream I think we could all reach if we really really wanted to. So let’s keep it up, okay? :)
@Tyler S. – Thanks Tyler! It really is refreshing, you’re right. My plan is still in tact and what not, but thinking of it with a different angle just amps up my excitement for this stuff… I’ve been in such a “I hate home ownership” mood that I never opened up to the idea of what’s possible if I just *dealt* with it, ya know? And now that I’ve been doing that going on 4 months now, it’s all coming to light baby! I can’t wait to post about our last payment, hehe… hope things are well on your side too, bro – thanks for stopping by.
@Nick – HAH! Exactly. That’s what finally got me to budget and start paying more off every month, actually ;) The fact that I owe the money no matter what happens, so I better start getting on it before it’s too late!
@Devin – Rock on, brotha. It really is an eye opener for sure. I’m just finally glad I’m doing something about our mortgages rather than pushing them aside the past few years… I guess it allowed me to save and ivest more over this time, but still – it’s just a good thing I started jumping into a good plan here ;) Thanks for reading the bog, and leaving your thoughts – it means a lot.
@Long – HAH! I’m glad to hear it, man :) I only hope to be in that same spot one day – and I think we’re on a good path here. Thanks for always leaving comments, I love it!
@Joy – Oh yeah! I didn’t really think about that before, but I’m sure I would have eventually :) Thx for the heads up, though! Hope you all get mortgage-free too in the not so distant future :)
@Mysti – Oh, yes – good call. I don’t think that’ll be a problem for us unfortunately though, considering we’re $60k underwater ;) But you never know! Maybe by the time we’ve paid it off, real estate prices would have doubled and we’ll be sitting pretty! (Though, then we’d have to BUY or rent a place that’s now double too, bleh… but yeah – get your point loud and clear!)
@Kyle – Haha, yeah – *hopefully* is right ;) But unless we then move into our parent’s home or something, we’ll still have to buy AGAIN if we were to sell the place! At least we can downgrade though, or move to a diff. area… luckily/unluckily, Washington DC is one of the most expensive places to live, so I think we’d be fine moving away any day ;)
@Angella – WOWWWW, that is great!!! And incredible – a house for $35k??? Damn. Way to go! :)
@Matt – YES!!! That would be a most beautiful plan indeed, I like it! Where can I sign up? ;) Maybe we can be biz partners?!
@Cassie – Haha, damn straight ;) I’m gonna rock that sucker like no other, you wait.
@AverageJoe – True, true, you’re right on that. But it’s a nice option to have if you decide to cash out and move forward ;) Esp if you downgrade, or find yourself an even sweeter home where putting down straight up cash could get you in there a lot cheaper. At the end of the day, I just want the *optoin* to do as I please – whatever that means at the time. I’m not gonna be forced to do anything anymore ;)
@Kathryn C – It’s already been broughten!
@Houston Real Estate Guy – Hehe, we’ll see it one day ;)
@Christa – Yeah, I’d agree with you on that for sure :) I can put up with maintenance here and there – even if it’s high – if I have no recurring bill hitting me every month! Esp a large one like that, I mean $hit – our mortgage/rent is the highest thing we pay every month, imagine what it would be like with that gone? Crazy.

By: Christa

Christa — Wed, 11 Jan 2012 23:07:04 +0000

I dream of the day I can pay off my mortgage and have a fully-paid for peice of equity and more expendable cash. Sigh. It’s definitely worth the upkeep hassle.