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Mitchell Andrus
01-15-2008, 6:55 PM
24 years - a bit early. We've been pumping a few extra dollars in now and then. Saved a pile in interest. Nice.

Lately I've been thinking about just paying the small balance off but it was so small and the interest was less than a buck a day so I've been milking it along. I noticed last month that the $2,300.00 principal balance was roughly equal to my escrow for taxes. I called and asked the mortgage co. to apply it and wipe it out - no brainer, huh? So I'm free!!!! Course, I've got to pay my own taxes and insurance... so it's not ALL gravy, is it???

Bruce Page
01-15-2008, 7:01 PM
Congrats! Ours will be free & clear this June - I can't wait!

Greg Funk
01-15-2008, 7:12 PM
Congratulations! It's a liberating feeling to be debt free...

John Bailey
01-15-2008, 7:25 PM
And are we "better than we deserve" yet!!;)

John

Leo Graywacz
01-15-2008, 7:28 PM
I paid my 30 yr off in 17 years. It was hard and we made sacrifices. And now I have a free house. Of course there is still taxes, heat, electricity, repairs, etc. And I have taken the money we use to pay and now put it into rent for my 2800 sq ft shop. At least that is 100% deductable unlike just the interest on your mortgage.

Congrats.:D

Greg Cole
01-15-2008, 7:29 PM
I'm not even close to that yet at 33, but plans are to have whats left of my 24 year refinance (5 years ago) to be paid off drastically sooner. At least one extra payment a year isn't much of a stretch on the wallet & I swear to my LOML I'll retire way before she (and she's nearly 10 years my senior). She vies to work into her 70's... she's nuts. I'm out as soon as I can afford it.:D
Getting the walls n roof paid for at a decent age just doesn't happen anymore..... but by rights I'll be w/out said "boat anchor" payment younger than many (aiming for no mortgage by 45 years old).
Looking at the lifetime $ spent on interest for any mortgage, I fail to see why more people don't make paying off that note a priority. :confused:
Ok, now I am being my dad. G'night.

Greg

Jesse Cloud
01-15-2008, 7:30 PM
wise move! Interest, even tax deductible interest, will kill you!

The wife and I paid everything off before we retired - its amazing how little you can get by on if you aren't paying interest to anyone.:D

Now, go buy some tools and some wood!

Randy Cohen
01-15-2008, 7:30 PM
Good job Mitchell. I built our house over the course of a few years and we never had to borrow for it. Paying interest is throwing away money.

Rob Bodenschatz
01-15-2008, 7:34 PM
Congrats! Ours will be free & clear this June - I can't wait!

Mine will be paid off in June too. June 2035. :(

glenn bradley
01-15-2008, 7:48 PM
Mine will be paid off in June too. June 2035. :(

Oh Boy! I'm in line right behind Rob.

Wes Bischel
01-15-2008, 7:49 PM
Mitchell,
Congratulations!! Major gloat. That's got to feel good - a huge goal met. I remember about 8-10 years ago the financial "experts" were telling people that paying off their mortgage was "foolish". The money should be going into the market for a better return, and a mortgage was just an expected expense. Maybe they were right, but I'll feel better when we own the place.

We'll be done in '09 with the mortgage - then in early '11 for the home equity loan (for new windows etc.). Then we'll really be sweating college tuition.:eek: (Yep, already started saving - when he was first born.)

Congratulations again!

Wes

Jim Becker
01-15-2008, 7:56 PM
Congratulations, Mitchell!

For your taxes, consider setting up your own "escrow" using a high-interest savings account such as with ING.direct. It can auto-transfer from your checking account each month just as your mortgage likely did and you'll be ready to go each time the taxes and insurance comes due. I've been using ING for my local earned income tax (my employer will not withhold since they have no facilities in this township) for years as well as for all our addition monies. It's worked out really nicely!

Steve Clardy
01-15-2008, 8:18 PM
Yes. Wise move.

Our property has been paid for since 2002

Its really nice to not have a huge payment;)

Gary Keedwell
01-15-2008, 8:27 PM
Yup, we sold the big house and 5 acres at the height of the market in 2004 and paid cash for our new "smaller" place. Were on our fourth year of no mortgage. Great feeling. Now about those taxes..........

Gary

John Shuk
01-15-2008, 8:29 PM
Way to go getting rid of that payment. I'm feeling pretty good knowing that I only have about 8 years to go on mine. But 3 kids will be getting close to college age shortly thereafter.
Then again I pay more in property and school taxes than I ever expected to.

Paul Snowden
01-15-2008, 9:22 PM
Mine will be paid off in June too. June 2035. :(

Mine is 2035 too....but we are paying extra to it looks like we might have it paid off by 2022. Of course that is if we don't move and get a bigger house...etc.

Mitchell Andrus
01-15-2008, 9:54 PM
John, It'll be only a few short years til our taxes are up to the amount we used to send to the mortgage co. Nuts, huh?

Rich Engelhardt
01-16-2008, 5:45 AM
Hello,
My wife (aka the finacial wizzard) paid ours off in 2000.
Got eaten alive by taxes.:mad:

Plowed ourselves back into "debt" heavier than ever in 2002.

Been dumb, fat and happy ever since :D

Paying off the mortage is an important first step.

Your two "jobs" now are:
- Hang onto what you've got - don't give it away a little at a time to the IRS.
- "Unlock" the equity and make it work for you.

We did (and are doing it) via rental property. That's not for everyone though. - Not everyone's idea of a "good time" is a phone call @ 9:00pm on Christmas day from a tenant with no heat:rolleyes:. <-- cost us over $600.00 - bah humbug ;)

"Debt" is a lot like playing blackjack. You hedge your bets until you can play on the "houses" money - then take back your original stake - and go nuts,,well semi nuts. ;)

Mitchell Andrus
01-16-2008, 8:11 AM
Rich, I've got a 20,000 sf commercial building... make debt work for you - I hear ya. 21 years, gets paid off next year. There's nothing like getting a few tenants to pay your mortgage and spit $4,000.00/mo cash into your back pocket.

Chris Padilla
01-16-2008, 10:59 AM
Congratulations!! I can't imagine what it would be like not having to pay a mortgage every month! Wait, I can! ;)

2032 ours should be done but once we dump the nanny, we ought to be able to pay it off much, much sooner. 5.75% interest on a 30 year fixed ain't so bad but the nanny is seriously killing our cash flow. Could be paid off even sooner if the darn stock market gets back on track but I'm not holding my breath on that one for a couple of years.... :(

Jim Becker
01-16-2008, 3:52 PM
Chris, it doesn't end when the Nanny leaves...there is Summer Camp and Day-off programs at school and YMCA and... ;)

Mitchell Andrus
01-16-2008, 4:03 PM
...music lessons, flying lessons, scout duties/camping equip., college, weddings....

Jim Becker
01-16-2008, 4:20 PM
...school lunch, school supplies...and the darn $36 field trips....

Jim King
01-16-2008, 4:23 PM
When we paid off our first house mortage in Minneapolis the rent to Uncle Sam (taxes) had risen to be more than the mortage payment. It is never over.

Here in the Amazon our house is appraised at $160,000 USD and our taxes are $210 a year. A couple of nice bowls and its over until next year. That is why so many people retire in places like this.

Chris Padilla
01-16-2008, 4:27 PM
Yes, well aware of the extracurricular activities but we are knee deep into them already: ballet, gymnastics, swimming, tennis, acting/modeling school (the latest one and most expensive but it is a tax write-off, at least). Trust me, all those do not cost me $400/week like the nanny does! :( She's wonderful, however, and she is actually cheap but that is still a lot of money heading out! Plans are to end her services in August....

Scott Coffelt
01-16-2008, 4:33 PM
I am jealous. We did a number of refiances. We got down to a 5 3/8's% a few years back on a 15. We wanted to take it even less, but the bank wouldn't let us do less than 15. We've been paying more each month, it makes a difference, but we're still 9 years away from free and clear. I hope to increase the extra principle payments to hopefully reduce to 5 years or less. Our original goal was to be free of home payment by the time my son goes to college in 10 years. So far we are on track.

We almost made a major blunder 2 years ago, we bought 2 acres and were gonna build that dream home and 1k sqft shop. Then decided why pay a mortgage for 30 years when we had 10 to go on the current. Besides if one of us loses our job we could still handle the current mortgage versus being in pickle on the new one. Stopped the build process right before ground breaking. It cost me $10k, but in the long run I felt that was a small price to pay to make the right decision. If I would have only stopped myself before I bought the land I'd be that much closer to a paid off house now. Live and learn. I really wanted the bigger dedicated shop.

Jim Becker
01-16-2008, 6:41 PM
Even though we no longer have the 15 year contract we did for most of the time we've been at this property, I can absolutely say it was very helpful toward having enough immediate equity when we chose to refinance to help fund our addition. That 15 year loan was really taking off the principle fast from day one. I would have liked to do it again for the refi, but it would have pushed the payment beyond what we could afford should either of us become unemployed. It would be tight if that would happen now, but we'd be able to live without getting into trouble for a reasonable period of time. Choosing the longer term mortgage was the right thing to do this time. That said, I'm envious of those who are free and clear or nearly so!

John Shuk
01-16-2008, 9:04 PM
John, It'll be only a few short years til our taxes are up to the amount we used to send to the mortgage co. Nuts, huh?

My mortgage statement breaks down the principal the interest and the escrow each month. Escrow is the highest of the three!:eek:

Jim Becker
01-16-2008, 9:07 PM
Isn't Escrow similar to Hostage? :eek: :o :p :) :D

Chris Padilla
01-17-2008, 3:18 PM
I am jealous. We did a number of refiances. We got down to a 5 3/8's% a few years back on a 15. We wanted to take it even less, but the bank wouldn't let us do less than 15. We've been paying more each month, it makes a difference, but we're still 9 years away from free and clear. I hope to increase the extra principle payments to hopefully reduce to 5 years or less. Our original goal was to be free of home payment by the time my son goes to college in 10 years. So far we are on track.

You took me to see that "swamp land" you bought...glad you came to your senses on it. ;)

Mortgages are an interesting thing. Go long term to have more cash flow now or "suffer" less cash flow for EVEN MORE cash flow later down the road. It is all very subjective. Had we gone 15 year, I'm not sure we'd have enough cash flow to cover the kid's activities along with the nanny's cost. The kid's care will drop but not to zero but to a much lower cost option and allow us more cash flow near the end of the year. The Bay Area is a nice place to shack up for a while but it is pricey out here.

Shawn Walker
01-17-2008, 4:43 PM
Now that's a good gloat!! Congrats!! I paid mine off last year.
Feels gooood, doesn't it. :D
Cheers Shawn.

Montgomery Scott
01-17-2008, 4:51 PM
I remember about 8-10 years ago the financial "experts" were telling people that paying off their mortgage was "foolish". The money should be going into the market for a better return, and a mortgage was just an expected expense. Maybe they were right, but I'll feel better when we own the place.

Wes

The experts are correct. Unless the market is doing poorly for an extended period of time, you will make more than 6% in the stock market. Over the last 11 years I've averaged around 10% on my 401k investments and the last two years have averaged 17% each year. At retirement time I'll likely have a lot more money than if I used it to pay off the house.

Jim Becker
01-17-2008, 5:08 PM
There is likely some truth to that, Montgomery. And for folks who regularly max out the pre-tax allowable contribution to 401K plans, that mortgage interest deduction is still important. So are the pre-tax Health Care Reimbursement Accounts and Child Care Reimbursement Accounts when it comes to maximizing return and minimizing tax impact. We all need to do an overall financial plan to be sure we're doing the most efficient things with our incomes and investments.

I recently kicked up my 401K contribution as I now qualify for "catch up" contributions of an extra $5K per year pre-tax because I'm over age 50. That's a better way to use the funds long term than paying down the mortgage or even making other forms of investments for me right now.

But I admit, it would be nice not to have the mortgage!

Danny Heisner
01-22-2008, 2:00 AM
Congratulations on getting out of debt! I soooo look forward to the day.

People shouldn't make it an either/or, but a both. You don't want to pay your house off early and have no money invested to live on and you don't want to invest all your money and pay $150,000 more in interest than you would have had to if you hadn't taken out that 30yr mortgage.

I try to split it down the middle and do both. I live on a written budget and as my pay increases, I continue to live on the same amount, but split the increase between investments and the mortgage. I also sock away a little for the kids college, but I plan on them paying a lot of their own way too. It builds character.

And don't forget to give a bunch away!

God bless!

Danny