Are you that worried about paying off your house before retirement?

[Jumpem]

Or before your kids start college?

I keep debating between staying in my current cheap house which I have to keep fixing or renovating, or moving to a new house with better build quality and hopefully not much unexpected upkeep for ten or fifteen years.

 

[Slew Foot]

ive timed my mortgage to be paid off before the kids go to college. Hopefully their 529s will cover the cost so i wont have too much out of pocket expense

 

[Jumpem]

ive timed my mortgage to be paid off before the kids go to college. Hopefully their 529s will cover the cost so i wont have too much out of pocket expense

That has been my current plan so far. I was going to start sending double payments at the beginning of 2017.

If I got something new I would make the minimum payments on the 30 year for a few years, and then pay more in the future as able. I would still have a mortgage when my kids enter college.

I don't have 529 plans for them. I am just going to finish paying off my wife and I's student loans this year. Other than that I am saving as much as I can for retirement. My plan was to help them as needed during college, but to put retirement savings first.

 

[SAWYER]

I owe about 7-8k then I am paid for, cant wait. My neighbor wants to buy 5 feet of my land on his side of my house, that would be enough to pay off my house.

 

[Jumpem]

Hmm. With a lower 30 year mortgage rate than my current mortgage, the difference would only be about $380 monthly.

 

[Red Squirrel]

I put $200 extra on my house biweekly, so I sure hope I can pay it off before I retire. When you look at payment history it's actually crazy to consider how slowly a mortgage gets paid off if you make regular payments. More than half of your payment is interest.

There's the argument that you are better off investing money instead of putting it on the mortgage, but unless you have 100k+ to invest, you are still paying more in mortgage interest even if it's lower because the amount you are paying it on is much higher. So makes sense to try to speed those payments up and cut on the overall interest you'll pay. Once my house is paid then I will seriously have to start saving up for retirement. I have basic retirement savings but on it's own it's not enough. I think I have like 16k into it so far. That's enough for maybe like 6 months, especially if I consider inflation, it might even be less.

 

[gururu2]

We really live under our means, especially when it comes to luxuries like cars (my 2000 elantra and her 2005 accord) and other toys (I get 1-2 pc games annually). That being said we are expecting to pay off our house (335k cost) in five years, before our daughters (3 yr) expenses really start to ramp up.

 

[maddogchen]

If I stay healthy and working, I'll have it paid off way before

 

[brianmanahan]

i'm just planning to buy a house with cash, like the amish

 

[monkey333]

Our savings account could more than cover it, but it would destroy our just in case fund. My wife insists we keep almost a year of her salary in reserve. She's right, but it's hard to swallow paying almost a grand in just interest each month.

 

[PenguinPower]

Nope. Already paid off.

 

[highland145]

Worried about paying off my retirement before retirement. House is paid, kid's college is not...depending on scholarships (which he should get some). I'll be 52 next month.

 

[PowerEngineer]

I know that having the mortgage paid off by the time you retire is a popular recommendation made by many financial advisers, and in many cases it makes good sense. We've already done so.

Given the cyclical nature of inflation and interest rates, it wouldn't surprise me if those thirty-year 3% fixed mortgages start looking like cheap money a decade or so in the future. It may someday make more sense to invest your discretionary cash to get a 5%-10% return (in a inflating economy) rather than to pay off a 3% loan.

It seems to me that the better advice is to be in a position to pay off your mortgage by the time you retire.

 

[highland145]

Debt free is the way to be...unless you owe me.:sneaky:

 

[Sho'Nuff]

ive timed my mortgage to be paid off before the kids go to college. Hopefully their 529s will cover the cost so i wont have too much out of pocket expense

Similar plan here. Although in my case I'm not planning to fully fund my kids college education. Rather, my wife and I have decided that whatever is in their 529's when they enter college is what they will get (we'll normalize between the two of them, of course). Not that they are being shortchanged. Provided they do not go to some crazy expensive school there should be enough in each of their 529's for at least 3 years of room and board. The last year they will have to fund themselves, but that is a designed plan. Both of our parents made us do that and it gave us tremendous incentive to do well in school.

As for our house, it will almost be paid off by the time our kids go to school. But to be honest I don't really care. Once the kids are out of school my wife and I plan to sell our current place and move into a smaller home in the lakes region of Maine, which is much less expensive than where we live now.

 

[Sho'Nuff]

I know that having the mortgage paid off by the time you retire is a popular recommendation made by many financial advisers, and in many cases it makes good sense. We've already done so.

Given the cyclical nature of inflation and interest rates, it wouldn't surprise me if those thirty-year 3% fixed mortgages start looking like cheap money a decade or so in the future. It may someday make more sense to invest your discretionary cash to get a 5%-10% return (in a inflating economy) rather than to pay off a 3% loan.

It seems to me that the better advice is to be in a position to pay off your mortgage by the time you retire.

Not sure I agree with this. That 3% interest is tax deductible, which means that it is really ~2%. It is pretty easy to do better than 2% in the market (even this market, provided you have long term goals), so in my view its better to put the extra cash you would throw against the mortgage into investments. Particularly when one takes into account compounding returns.

I know that this requires one to believe that the stock market will eventually return to normal. But to be honest if it doensn't we are all f*cked no matter what we do. So I choose to see the glass as half full and take one bet that has a chance of paying out.

 

[IronWing]

Debt free is the way to be...unless you owe me.:sneaky:

Owing you is totally doable. Paying you back, meh.

 

[Sho'Nuff]

NM

 

[Imp]

I plan to have a minimalist lifestyle that involves me living out of dumpsters.

 

[IronWing]

I plan to have a minimalist lifestyle that involves me living out of dumpsters.

People used to live of trash cans. What is it with this need for McMansions?

 

[Jumpem]

I know that having the mortgage paid off by the time you retire is a popular recommendation made by many financial advisers, and in many cases it makes good sense. We've already done so.

Given the cyclical nature of inflation and interest rates, it wouldn't surprise me if those thirty-year 3% fixed mortgages start looking like cheap money a decade or so in the future. It may someday make more sense to invest your discretionary cash to get a 5%-10% return (in a inflating economy) rather than to pay off a 3% loan.

It seems to me that the better advice is to be in a position to pay off your mortgage by the time you retire.

I would like to have it paid off by retirement. If I get a new house with a thirty year mortgage the end date would be right about the age when people are expected to retire.

 

[Alienwho]

In absolutely no hurry to pay off my house. 3.5% interest, I'll pay the minimum thank you. Would rather put that money into padding my 401k/IRA's. But then again I'm only 31. Putting $5k into my wife's IRA is going to return a heck of a lot more over 30 years than putting that same money into paying off the house a few years earlier.

 

[BarkingGhostar]

I have no kids and plan on working until I die so I can keep your kids unemployed and living with you, Mr. 2nd Mortgage.

 

[Engineer]

Nope. Already paid off.

This. Made paying for cars and college for kids much easier so far. Haven't touched savings for any of those things. Haven't increased savings much but haven't touched them either.

 

[Dice144]

I throw a little extra on the mortgage every month as a safe invest. Rest goes to stock market and other investments.

Something like $75-125 extra a month on mortage (105k left)
$700 ish in stocks and $800 in other investments.