Anybody Working on Paying off their Mortgage Early? - Page 4

[Herausgeber]

Would anyone be interested in participating in a thread about investments?

[mightymoo]

Originally Posted by Herausgeber

Would anyone be interested in participating in a thread about investments?

Yes, I was just about to respond to you about REITs, why don't we take it to a new thread.

[Herausgeber]

New thread is created.

[phatchristy]

Interesting reading all of the posts. In our case, we bought our home in FL before the insane property values went up. We then refinanced it down to a 15 year mortgage when the rates dropped dramatically. For us, since our mortgage wasn't for that much we actually do better taking the standard deduction since my son was born . DH maximized out his 401K, we do roths, and other investments as well. No credit card debt, and we paid our kids college with the Florida pre-payment plan.

For us, it worked out as we don't plan on moving anytime soon (we've been here 7 years). Out of our mortgage payment since it's a 15 year loan there isn't much interest payment so we do better with the standard deduction.

A smaller home, bought before the property values rose (our home was $124,000 when we bought it, would sell now for about $315,000), we plan on staying here. A smaller home is easier and less expensive to maintain, cool and insure (we have an insurance crisis down here and I love it that our rates are still reasonable in comparison to our friends who have larger homes). Not that it's small really though, it's 4 bedrooms and 1800 square feet...just the right size for having a large family and staying decluttered . Property taxes are capped in FL as well, and can only be raised 3% a year....so we really lucked out in buying it when we did. We pay just under $2000 a year in taxes, and our newer neighbors are paying over $5,000! It's a great location, DH is 5 minutes from work, and we have very low transportation costs! So for us it works. We aim to live beneath our means and typically put about half of the income in investments.

For us, carrying a larger mortage wouldn't work. I looked into upgrading to a larger home (add 1,000 square feet same bedrooms and garage). For us, it would mean:

(typical acessements on a home I was interested in...a community I like a typical 4 bedroom home with 2800 square feet in a community we could afford --home around $450,000--we actually would have to move up North somewhat because 2800 square foot homes by us actually are going for around $550,000 as our location is really good).

Increase in property tax from $2,000 to $8,000. (so an extra $6,000)
Increase in homeownsers insurance from $1,100 to $2,500 (about $1,400)
Increased cooling costs (about $400)
Increased yearly homeowners association fee from $200 to $1600 (about $1,400 increase)
And, around $6,000 more each year I would have to put towards a mortgage
Then, don't forget that toll road which give you access to the home...just for his work $2 each way, for a total of $20 a week or $1040 A YEAR!!! Not to mention when I needed to use the toll road : .


(so we'd end up spending about $16,000 a year for 1000 square feet ). Scarry stuff, eh?

Not to mention increased gas costs as DH would be farther from work : .

OK...

Now that I figured that out I have to say, I'd rather put that $15,000 towards college for the kids, or our retirement. Hey, I could by a compact car every year of my life new if I wanted for that cost .

Now, after everything I wrote I have to say thank God we moved to FL when we did, otherwise there is NO WAY I would live down here. Sadly, people who work here sadly can't afford it anymore. It's been about 7 years since the cost of living was low . Thankfully we bought in the housing market before the boom, or sadly we'd be paying double what we are on a 2 bedroom condo! :

[mnnice]

velochic-- my comment about selling stock was intended as a joke.

[TexasGirl96]

Wow! I went out of town and I think there were about 10 posts - I came back and there were 4 pages! The debate has been very interesting!

While I completely understand the reasoning behind investing instead of paying off the mortgage, the decision on what we will do is rooted in our personal philosophy on life and not necessarily on the numbers (although numbers do factor in to some extent).

We are already saving over 20% towards retirement through 401K's and Roth IRA's. Our DS was born this year and we are currently setting up his college account. We also have some money invested in mutual funds and stocks.

We are a pretty young couple (early 30s), and I really think that we have already laid a good foundation for our retirement. We are looking at paying off the house because of the freedom it will give us. I currently work because I love what I do and I feel a real calling to do it, but I know there is a time in the near future when I may really want to stay home, so by paying off the house, we are trying to make that transition as seamless as possible without having to interrupt our other investment goals. To me, the ability to really respond to the needs of my family without having to cash in the current nest egg to do it is a better return than any mutual fund.