Comments about ‘Home no loan: Should you pay off your mortgage early?’

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Published: Monday, May 13 2013 3:26 p.m. MDT

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Idaho Dad
Pocatello, ID

We've been debt free for over nine years now, having paid off the 30-yr. mortgage in 10 years. That means we paid 1.5x our purchase price (instead of 3x which would be normal for a 30 year mortgage). With no mortgage, we've been able to accelerate our retirement savings and help others in ways that wouldn't have otherwise been possible. Pay your debt and live! The advice is scriptural and confirmed by the Church leaders. Remember the story of Elder Faust whistling as he worked because he paid off his mortgage? Be wise--start retirement savings early. But as the opportunity arises, pay off that mortgage!

Come on in, the water's fine!

Oldcoach
Hurricane, 00

I questioned my wife when she was paying double payments on our mortgage and had it paid off about 5 years short of its 15-year term. When she had it paid off is critical--early in 2007. While some of our friends were struggling to pay their underwater mortgages, we were whistling while we worked in our garden with no financial worries. Would I do it again? Absolutely. As Idaho Dad said, "Come on in, the water's fine!"

Aaron S
GREEN RIVER, WY

When WILL people quit thinking of a house as an investment? It IS NOT: IT IS A PLACE TO LIVE! Only a fool would think, in retirement, of how to get money "out of their house". Why? To be in debt again? Or--what?--invest it to earn more? This is the kind of wrong-think that has gotten people into trouble since time immemorial. Pay off your mortgage, folks, the sooner the better, and rid yourselves of the sword of Damocles hanging over your head. I have 3 years to go on my mortgage, at which time I will have cut 8 years from a 30-year mortgage. Hallelujah!

Riverton Cougar
Riverton, UT

Besides the mathematical and emotional answer, there's the spiritual answer. The prophets have said (I'm paraphrasing) "Get out of the bonds of debt and live within your means". While it's debatable as to whether or not purposefully putting off the payment of your mortgage to increase total revenue is living within your means, it is certainly not getting yourself out of debt.

All things considered, I will follow the Lord and get out of debt as early as I can.

lvnthedrm
South Jordan, UT

Having debt (leverage) and being in debt are two different things. I have my home paid off in theory because I have more than enough liquid money available to me to cover my mortgage. I don't actually pay off my house. Why? because I can earn a consistent 7% on my money compounding while I'm only paying simple interest 3.5% to my bank. I'm creating wealth this way. Some prefer to create wealth after paying off their house. These things are a situation by situation thing.

Mona
Beaverton, OR

We paid off our house 17 years ago after 12 years into a 30 year mortgage. And have never regretted it for a day. I will never forget the elation I felt walking into the bank to transfer the funds! We've been unemployed a couple of times since and never had to worry about a big house payment and the misery that comes from getting behind on a mortgage.

The article has 'experts' splitting hairs about how a person can come out best financially. The truth is that the security you have from being mortgage-free trumps all that.

toosmartforyou
Farmington, UT

Notice how every person advising against paying off your mortgage is hanging on investments that "earn more" than the return on your mortgage interest? In other words, they are banking on greed and the concept that being in debt is ok if you maximize your return.

Pres. Hinckley said his father advised him to get a modest home and get it paid for. He said he followed that advice and found it to be good anf advised others to do the same because it something were to happen to world financial markets at least your wife and children would have a roof over their heads. I find that advice to be superior to the experts who want to leverage debt.

Look at how many are in trouble due to the bubble bursting a few years back. My mortgage has been cleared for 12 years and that has made all the difference regarding money for a family vacation, funds for weddings, vehicles for family members needing a car, educations, etc.

Also, consider staying ahead a year on taxes and insurance, too, or you might lose your home to the government if taxes become delinquent.

Burdensome debt is foolish.

A Guy With A Brain
Enid, OK

Those counting on the stock market to make more money for them than what they could save by having no mortgage are 'betting'/hoping the stock market doesn't self-destruct.

Up until recently I was comfortable betting that, too. However, given the fact of who we have in charge of our government these days AND the $17 TRILLION in debt we are as a nation, I don't think our economy is going to survive. I think it is more likely that we are headed for a depression and economic catastrophe that will make the Great Depression look like small potatos. Why? Because manufacturing capability is waaaaay down in America today versus 90 yrs ago and because we, as a nation, lack will, strength, ethics, integrity and morality. Back then one's word was generally their bond. Today....not so much.

I reeeeeally need to decide what to do with my mortgage.

PGVikingDad
Pleasant Grove, UT

Never, ever, ever ask a real estate agent or a mortgage broker whether you should pay your house off early. Also never, ever, ever ask a securities broker (who would love to sell you an investment with all that "extra" cash) the same question. The real answer is incredibly simple: Pay your house off as soon as you can. Anyone who says you can "easily" exceed the 3% or 4% without significantly increasing your personal financial risk is selling something. The S&P is up exactly 5% since March 1, 2000. That's less than half of 1% per year with HUGE equity swings and taxes charged on what little gains that may have been realized. And keeping a mortgage to preserve the dadgum tax deduction?! Anyone who even brings that up loses all credibility, immediately and irretrievably.

Aggielove
Cache county, USA

Not having a mortgage is a good idea for some.
But I know a lot of smart Mormon folks, who are worth millions, that owe on there homes. They could pay it off 20 times over, but why when they make millions in the market. Less educated folks don't like the market. They don't like risk. So, they of off there house.

Owl
Salt Lake City, UT

The issue is cash flow. Without a mortgage payment one has more monthly cash. Perhaps it could make a marginally better return on an investment although with low interest rates that is not assured. But considering the risks and the fact that many home owners are in the latter half of life, having more discretionary income now is paramount. Some of the consultants in the article make their living from mortgages and are not exactly a disinterested third party.

lvnthedrm
South Jordan, UT

I love how narrow minded people are. Just because someone says Im investing my liguid money elsewhere doesn't mean its in the stock market. Believe it or not the stock market isn't the only place to invest.

To those who quote prophets on all this talk, that's great for you. Those are personal opinions of those prophets. Also I think you'd be surprised by the debt (leverage) the Church has on their real estate BUT they also have liquid money well above those debts to pay them off.

Again, being in debt and having debt are different things.

Sasha Pachev
Provo, UT

I believe in the principle of being out of debt. I do not care if I miss some potentially high return investment because I chose to pay off my mortgage early. The spiritual blessings of obedience outweigh the financial benefits. That said, can somebody please point me to an investment that is guaranteed to return at least 3% annually?

If you are worried about not having liquidity, the solution is simple. Take out a home equity line of credit, and use it only for emergencies. You can get one at UCCU, for example. This allows you be very aggressive about your mortgage and throw everything you've got on it. If you overdo, pull the amount you erred by out of the line of credit. This requires self-control - never pull out of the line of credit more than what you have put into the mortgage. You end up paying off your mortgage faster with less total interest.

Lindsay
Payson, UT

If your house is paid off, it's yours. If its not and your investments tank and you lose your job, you are homeless. Your house is not an investment, it is your home. The tax deduction isn't work the debt load.

spudnut
West Jordan, UT

I am fully on board with Tresidder's philosophy - There is no right answer. There really is a mathematical (or analytical) answer and an emotional answer. Sometimes the two answers are the same and sometimes they're not the same. The important task for each individual, couple, family, or whatever group, is to determine which element is most important to come up with "your" right answer.

washcomom
Beaverton, OR

"Could-a, should-a, and would-a" are three words the come to mind when people start thinking they should do this or that. Hindsight is 20/20, and you can always look back and say that things would be different if you "could-a, should-a or would-a" done something differently.

A family needs to figure it out for themselves, by putting things out on paper and do the pros and cons each year. We can't see into the future, but we sure can use our gut feeling to determine what is the best course of action for this particular year.

The Rock
Federal Way, WA

"Mortgage" a French word meaning Slave.

Any questions?

common twit
Salt Lake City, UT

Billionaire Mark Zuckerburg took our a loan on his home at 1.05%. He is actually getting paid to buy a house. Inflation alone makes that a risk free loan. I would bet if he loses his billions, the last thing he is going to worry about is whether his mortgage is paid off.

theodoreable
Heber City, UT

a House is NOT an asset. Accounting terms state the following: "In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset)."

So...until you pay off your house it is a liability.

All of you quoting the Prophet...he said there were exceptions. Education; Housing and Car.

I have known only one man who paid cash for cars/house etc. My grandfather walked in and paid cash for every car he bought. Always a blue lincoln continental.

So...your house is not an asset until it is paid off. It is a liability.

We have re-written our primary home various times, why? To use money for investment properties where someone else is paying for our places and two to make investments. We average 10%+ a year over the last 10 years on our investments.

I hope I have a home loan my kids can inherit :)

Spitvalve
Denton, TX

The tax deduction I get for my home loan is less than my total annual house payments. Why would I not want to pay off my house if I could (though I'm not in a position to do so yet)? I will still have to pay property taxes and insurance either way, but I'd have an extra thousand bucks every month to invest for retirement.

A lot probably depends on where you live and what the home is worth--that hedge fund guy with the million-dollar condo is not in the same position as a family with a $165,000 mortgage.

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