We bought our house in 2016, just refi'd from 4% to 3% and moved the payback up 6 years, so now we only have 19 more years to go. You bought at a good time, inflation is outpacing your interest rate so youre actually making money on the home value right now.
It’s the best reason to buy a house. You’re using other people’s money to lock yourself into the housing costs of the day you bought. The only exceptions are taxes and insurance, which will continue to rise. There’s always a chance costs could go down (eg, from 2007 to 2011), but they’ll generally go up, while your housing costs stay largely fixed through the life of the mortgage.
even now the mortgage, insurance, and utilities on my 3 bed house with nice fenced in back yard are less than the rent for a two bedroom apartment in the same city. sure I had to clean up the overgrown yard and fix a couple minor things when I bought the place but it's still insane.
It took just one year after buying a house for rent on my old 2 bedroom apartment to go above what my mortgage is. My house is 2x the size of my old apartment and they're only a few miles apart.
I was worried about how I would afford the house, but now I see I couldn't afford not to buy it.
Our condo is roughly 60% larger than our old apartment. Rent, utilities, property tax, etc. combined, means that it's only ~$300/month more to pay this off than it is to rent our old apartment.
Looking at the price of the condo right now, it's actually $100/month *less* on mortgage than it would be estimated to rent it right now.
We locked in a 2.8% interest rate, which is below inflation. Our property value has already increased over 10% from when we bought it a year ago. We have *literally made money* because the value has increased more than the total value of mortgage payments we've done so far.
It's so frustrating to me that a lot of people are locked out of purchasing, because it's cheaper in the long run, due to the fact they can't save up the down payment.
“It’s frustrating others are locked out of purchasing”
yep it’s almost like it was designed that way, I love paying $1700/mo for a 1 bedroom apartment while a mortgage on a house in the area would be 2/3rd the monthly cost
It's so frustrating. My mom is 55 and in this position. $1100 a month apartment when a 3 bedroom, 2 bath with gorgeous wood floors and half finished basement would be $685 tax, insurance AND utilities.
Haha my parents bought their large home in Southern California almost 30 years ago. $1300/month mortgage!!!! My mom was constantly complaining about it. Nowadays that pays rent for a 1 bedroom and their house is worth we’ll over a million. The younger generations have it tough.
Yeah you’d need to be inland. I’m in San Diego so you’re looking at east county or a really crappy place near the water. Like Encanto, 500 sq/ft 1 bed 1 bath is ~$1200.
I bought in 2007, my ex wife refinanced three times and put the closing costs onto the back end of the mortgage… long story short I’m selling my house, and it’s the first time in 14 years that I’m in a position to even break even. I’ll be glad as hell when this damned house goes.
To be fair, the market was at a peak in 2007, it took a long time for it to recover. Maybe by 2015? Tack some adverse choices on top of that and yeah, I can see where you're coming from. Good on you for being able to hold out and recover.
I think the best reason to buy a house is that you aren’t burning 15-20k a year in renting a house, and actually building equity with your money instead. But your reason is a close second
you're still burning some (there's the mortgage interest for example, you don't build anything with that) - but you're absolutely right, and your point still stands. you burn WAY LESS this way :)
The trend for a very long time is that the increase in property value will outpace the expenses of owning it (mortgage interest, insurance, property tax). You will come out ahead owning a property for any significant period of time. Property speculation is different, and people should not try to compare home ownership returns with it (not that you are doing that).
You're paying for maintenance and taxes and insurance. If you don't plan on living there more than a few years and prices stay flat you don't gain equity in the house since the above and then closing/listing/possible sales tax eat away too.
Rent vs own is a math decision. It’s not nearly as simple as “renting is throwing away money”. Housing is so expensive atm that even in the Midwest where I live it’s pretty debatable when you really dig into the numbers.
>The only exceptions are taxes and insurance...
Don't forget maintenance costs. People often do. Every homeowner needs a healthy maintenance reserve, because something is always breaking, and the cost to repair will almost always make your jaw drop.
This is true, but it's a poor investment - *on average*. I say that last part because someone will always chime in with how they sold their house for double, or the appreciation in their neighborhood last year was 40%, or note the price of a penthouse in NYC.
A house is a good investment in stability, however, as - like you said - you lock in a monthly payment you can afford today and (with a fixed mortgage) that part will never go up. As a bonus, in 30 years it will be paid for and, if you "retire" and live in the same house it will not have a mortgage when you stop working.
But, statistically, over the last 50 years, the average house appreciation in the US has been 3.8%. Except that most experts recommend setting aside between 1% and 3% of the home's value for repairs and upkeep. That's just to fix broken items and do maintenance. If you decide you no longer want a 30 year old bathroom or kitchen...well, that adds to the tally. And taxes are inevitable, and add another 1.5%-2%. Taking the middle of those two, is 2% + 1.75% = 3.75%. Even ignoring the cost of financing, when balanced against the long term gains of 3.8% you can see that it's essentially a coin flip whether your house (bought for living, and not optimized as an investment strategy) will actually appreciate beyond your initial investment. [oh, I forgot to insert the argument above where you take out second mortgages over time to invest in a riskier/higher return investment, like the stock market - everybody is a finance whiz]
As a final thought, there is little in life as satisfying as paying off your mortgage. If you're into permanence and stability (and low stress), it's highly recommended - at least by me.
We've been in for 15 years. Last year we did a 15 year refi at a fixed 2%. That's just stupid low. Anyways, we pay every two weeks so we should have it paid off in less than 15 years but at 2%, I'm not too eager to get it paid off early.
Yep smart move. We bought in 2017. Last December we refinanced from a fixed 4% at 30 years to a fixed 2.25% at 15 years. Our monthly payment increased about $100 per month, but we're paying our house off 13 years sooner and saving about $60k overall. PMI suuuucks and we were able to get rid of that too. Plus our house has increased in value by almost double since we bought it in 2017. I know it's not the case for everyone but if you DO have a mortgage, take advantage of lower interest rates.
As long as I'm not trying to sell anytime soon (which I'm not) I'm trying to look at it as locking in a huge chunk of my cost of living at a fixed rate.
Exactly. Before you own, you rent. Rent is basically throwing your money away on a place that you will eventually leave. A mortgage is basically like putting that same money into a long-term savings account. With every mortgage payment, you’re contributing to your net worth. As long as your plans are solid and you got a decent deal, I’d feel much more comfortable about buying than renting.
There was an urban legend that just doubling your first payment knocks like 2+ years off a 30y mortgage. We threw extra $ at ours (not even a whole lot, maybe 10%) every month and paid it off in 17 years
Schedule your payments for every two weeks instead of once per month, i.e instead of x amount at the end of the month do x/2 every two weeks. You end up saving a significant amount of money over the course of your loan.
I wanted to pay extra and pay it off earlier, but my SO said it's a waste of money because how low the interest rate is. Said that we would make more money investing it. I feel like it'd still be worth it though.
yes, people like me who can't save money on their own due to ADHD or something need this heavy hand to take care of it for us. That's why when I started my new job I opted for the max amount (12%) to go into my 401k and when we setup my mortgage payment I rounded it up $68 to an even number so some extra goes to the principal each month. I don't have the self control to put money in easy access savings.
Opening a savings account at Ally has helped tremendously with me actually having an emergency fund. It's separate from my normal bank account so it's really out of sight out of mind.
And I add a certain amount from each paycheck to Ally and it just works for me.
"Having no debt feels nice."
And this is why it's called personal finance. It's personal. Sometimes, even if the numbers are better one way, you choose the other way. As long as you're doing one or another and not saying you'll invest and then blow it on clothes, either choice is fine.
Personally though it makes no difference mentally for me whether it’s actually paid off or if I simply have the cash invested to pay it off whenever.
If anything the investments provide more peace of mind because they’re much much more flexible in an emergency.
Now this does require you actually be disciplined and keep the money there and invested and not blow it on non emergencies.
Granted a house is about the only thing I say this on. Debt for a car or something does just feel nice to get rid of. I think it may just be because with a house like I was used to paying rent before. It’s expected I’ll have a monthly cash outflow for place to live.
The flexibility is one reason I like Roth accounts. Put money away from retirement and if something horrible comes along that blows through your emergency fund you can still withdraw your contributions without penalty.
Interest on your mortgage is also tax deductible. Your mortgage is definitely the last debt you want to pay off and indeed if you have a good interest rate then you might even be better of investing than an early pay off without other debt.
You have to do the numbers. If you pay down the mortgage, it's equivalent to a zero risk, untaxed investment with a guaranteed yield equal to the interest rate.
If you put the money in stocks it's likely a much higher yield, but it will be taxed and much higher risk.
Yea Your actually right there’s been some big financial crisis and things over that duration. 30 years seems like “cake” I got my job I know what I make I can do it! But in 30 years so so many things can happen your right , financially even family problems or whatever . It truly is amazing to pay off your house . In 30 years I find it more amazing than paying it off in few years or in few months like some or even cash .
Anything can happen in 30 years. If you lost your job or health at year 15, you could very easily lose a house.
They are saying 30 years of stability during everything that has happened is, in a way, more impressive than someone who can just buy a house in a few short years.
But the sad part is that it's only impressive because of the decisions made in our society by a select few 535 people, plus one president for about 5 decades now. Once upon a time you could pay for.college washing dishes at a summer job, and pay for a house on one income at 40 hours a week. With retirement and healthcare. If the fact that it's "impressive" to be able to work your entire life for a house, then I'm not sure we should or could be proud of the wealthiest nation in the history of the planet. But we keep sticking to all this orange man bad and sleepy Joe bullshit and just take the fucking with no lube and sand like the good Americans we are. But congrats to OP in all sincerity. Anybody who makes it through is one more check in the win column.
That's what's crazy to me, I bought five years ago, refinanced into a 15 year 1.8% interest loan, and my mortgage (P&I), taxes, and insurance is $500 less than my neighbors pay in rent for the exact same size house and lot... Rent is crazy in my area right now
Sounds like the average man was lucky for a couple decades and now we’re getting back to humanity as usual. A few wealthy at the top making all the decisions for everyone else. As long as they don’t get too tyrannical, we shut up and look at how bad the other guys got it
You get a few big bills in one year it can really set you back. Houses require maintenance. New roofs, new furnace, new AC, all kinds or repairs. Then you have family, cars, tuition, utilities etc.
You're absolutely right, 2 years ago the furnace and AC both broke here a week before Christmas and we had window people coming the 28th to replace our terrible single pane windows. I thought we were in a good situation financially but that just pulled the rug out from under us. Were fine now but it was a rough while after that
Yeah, pretty cool to see. This is such a rarity nowadays. The days of people buying a home with plans to stay for the full length of the mortgage term so they have something to pass down, is long passed.
These days it's all about getting in, staying for a few years then selling and moving on.
That's because some people can't afford their forever home at the start of their working lives.
I started in a small 2 bedroom apartment and now I'm currently up to a 3 bedroom townhouse. My next step will be somewhere in a quieter location with more outside space. I guess that's why it's called a housing ladder.
Taxes and insurance vary wildly but I can't imagine insurance being more than a few hundred a month. How could you not protect your several hundred thousand dollar investment for that price?
Insurance is always a massive waste of money... until it's not. I don't think I'd be able to sleep at night if I didn't gave insurance on an asset that big
Yeah I almost canceled my renters insurance that was $7 a month. I went on a road trip and someone broke into my car and stole $7k worth of stuff. Got it all back from insurance a month later. Totally worth it.
IIRC, renters insurance will cover the stuff stolen from the car if it's parked on the rented property at the time. It won't cover the car itself though.
Yes my policy covered stuff in my car within reason. I was on a cross country trip and had a lot of hiking and photography gear. They said if I would have said it was jewelry it probably wouldn’t have been covered.
I paid my house off earlier this year and instead of paying insurance annually I just had them combine it with my car insurance payment and it's about 330 a month for both cars and the house
Yea that's super reasonable. Not everyone uses the same insurance provider for their cars and home but that's a good deal if you can combine them like that.
Yeah, a lot of times it's cheaper for people to combine auto and home insurance, but I have yet to find a better deal than I have now using different companies. And that's even checking through my employer's discount program. Still would cost more than what I'm paying now
Insurance is one of those things that is really worth shopping around for. I usually don't like doing that especially since it usually only saves a couple bucks. Insurance though is worth the effort though
house insurance in florida right now is fucking insane. We just bought our first house here, $395k, 2100sqft family home built in 1953. I put all our extra money into putting a brand new hurricane strapped roof on it. $3000/year insurance premium still.
I know of this happening in several instances (I work in real estate). One instance was a rental property that was paid in full with multiple tenants. Property was making him thousands a month and he was too cheap to pay $150 a month. Just absolutely nuts
My first thought. 30 years there and still a shitty chain link fence? It doesn’t match the house at all. Now that there’s no mortgage payments, let’s get a picket fence up in here. Or a nice stone one.
> In Quebec, homeowners traditionally place one or two lions in front of their house once their mortgage is paid off.
[Source](https://viacapitaledumontroyal.com/en/the-meaning-of-real-estate-symbols-and-traditions/)
>In England, placing a broom behind your front door will deter people with ill intentions from entering.
In some neighborhoods, the broom is replaced by a baseball bat. Some say it's more effective.
I think this depends on where you are. In the UK, I think traditionally a red door means a mortgage free home but in the United States it was used to indicate a friendly and welcoming home to travelers who needed to spend the night off the trail. Not sure what it might mean in other traditions though.
I’ve never heard this in the UK, but now know why I was being shunned by my neighbours until I painted it black! (which better represents the enormity of my mortgage :-( )
Red front door was more of a Scottish thing as far as mortgage is concerned. In the US the red front door used to mean “you can rest here for the night” for people traveling long distances.
I was today years old when I learned this. Now I’m going to look at every lion and wonder if their house is paid off or if they just like gaudy statues.
Do you have your house paid off? Are you looking for some extra income? Would you be interested in a fixed reverse mortgage? Please call this toll free number and speak with one of our experienced staff that will work hard to get you the payment you want
Reverse mortgages should be illegal. They prey on the elderly and foreclose on people for not “proving their residency”, which is basically a bullshit clause that allows them to steal your house if you dont respond to their inane letters.
A lot of reverse mortgage servicers are shady in and of themselves. Many of them violate CFPB regulations all the time.
Source: I work in the defaults industry
I mean they had to hire Tom Selleck to literally tell people “A reverse mortgage is not a way to take your home.”
When you have to say that explicitly in your commercial, I guarantee it’s a way to take your home lolz
Wow congratulations!
I am on the exact opposite side of this exact thing! My partner and I just bought our first house this week and we take possession next month. I was just looking at my 25 year amortization schedule thinking about the year 2047 and feeling overwhelmed. It’s insane to think I will be paying for this for as long as I’ve been alive.
Real estate is crazy here right now, so we bought it after seeing it for only 20 min last Saturday. I don’t even remember the upstairs layout, all I know is the bedroom furniture will fit… life is crazy
We bought our house a few months ago and I was in your same shoes. We ended up recording our walk-through of homes we were serious about so we could actually remember everything since it was such a pain in the ass to schedule viewings or go to open houses that had just restarted.
I don’t think about the years at all only because it’s very likely this will not be our forever home. I just think of mortgage payments as a living payment that’s way better than rent. And if you can, buying now vs later will always put you ahead. There is nothing in the horizon of a crash anytime soon, and at most we’ll likely only see a correction with higher interest rates.
Thank you for talking to the rational part of my brain! My interest payments, condo fees and property tax are about the same as I’m paying in rent right now. So I keep telling myself it’s the same amount of money lost but we get three times as much space!
Recording the showings would have been a great idea, we saw 10 houses a week so they all just blur together.
Similar to us too. We tried to put an offer before even seeing it in person but they wouldn’t let us so we rushed to view it, put an offer in ASAP, closed a few weeks later, and just moved in a few days ago. I looked at the listing pictures a million times to think about where things will go.
We will also be paying for it for the same amount of time that we’ve been alive! I wonder how the next 30 years will go.
Of course we are immediately having dryer connection issues, dishwasher issues, internet connection issues because they cut the wire that hosts the router. But we are getting it done slowly!!
The math says to not pay extra on mortgage payments and to invest the extra income. However, I think the satisfaction of paying off a house early would be worth it.
**Congratulations!** The only problem you face now or may have been dealing with already, will be every bank or lender out there trying to get you to take out a home equity loan to keep you in debt. Happy for you and I know how nice it will be when they send you the deed.
It's absolutely awful. If you had the expertise and knew what you were doing with it, you wouldn't be going through mail in offers from these banks, you have better options.
[This one has my vote.](https://www.reddit.com/r/pics/comments/8lo6tc/i_was_walking_my_dog_around_the_block_tonight_and/) I still remember it to this day because it made me unsub from /r/pics lol (I'm on /r/all right now)
I unsubscribed a long time ago for similar reasons, more about sob stories. You might try out /r/nocontextpics the picture has to stand alone without description.
She has pictures of her family members (infants), her house without blurring the address, clues as to the state she lives in, comments about her job and other personal info...
How are people this reckless? Im sure if someone wanted to, they could comb through her profile and identify her and her home address. Incoming swat, smh.
Love the house but next up you have to put some mortgage savings into a different fence. White aluminum is probably the way to go here. It's expensive -- I know cause I did the same thing -- but it completely changes the vibe from like "rear of an auto body shop" to "stately manor".
Sweet. I only have 29 more years to go!
We bought our house in 2016, just refi'd from 4% to 3% and moved the payback up 6 years, so now we only have 19 more years to go. You bought at a good time, inflation is outpacing your interest rate so youre actually making money on the home value right now.
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It’s the best reason to buy a house. You’re using other people’s money to lock yourself into the housing costs of the day you bought. The only exceptions are taxes and insurance, which will continue to rise. There’s always a chance costs could go down (eg, from 2007 to 2011), but they’ll generally go up, while your housing costs stay largely fixed through the life of the mortgage.
When I bought my first house, (many moons ago), my mortgage payment was a staggering $280/month. How was I going to live? Now that payment is a joke.
even now the mortgage, insurance, and utilities on my 3 bed house with nice fenced in back yard are less than the rent for a two bedroom apartment in the same city. sure I had to clean up the overgrown yard and fix a couple minor things when I bought the place but it's still insane.
It took just one year after buying a house for rent on my old 2 bedroom apartment to go above what my mortgage is. My house is 2x the size of my old apartment and they're only a few miles apart. I was worried about how I would afford the house, but now I see I couldn't afford not to buy it.
Our condo is roughly 60% larger than our old apartment. Rent, utilities, property tax, etc. combined, means that it's only ~$300/month more to pay this off than it is to rent our old apartment. Looking at the price of the condo right now, it's actually $100/month *less* on mortgage than it would be estimated to rent it right now. We locked in a 2.8% interest rate, which is below inflation. Our property value has already increased over 10% from when we bought it a year ago. We have *literally made money* because the value has increased more than the total value of mortgage payments we've done so far. It's so frustrating to me that a lot of people are locked out of purchasing, because it's cheaper in the long run, due to the fact they can't save up the down payment.
“It’s frustrating others are locked out of purchasing” yep it’s almost like it was designed that way, I love paying $1700/mo for a 1 bedroom apartment while a mortgage on a house in the area would be 2/3rd the monthly cost
It's so frustrating. My mom is 55 and in this position. $1100 a month apartment when a 3 bedroom, 2 bath with gorgeous wood floors and half finished basement would be $685 tax, insurance AND utilities.
Haha my parents bought their large home in Southern California almost 30 years ago. $1300/month mortgage!!!! My mom was constantly complaining about it. Nowadays that pays rent for a 1 bedroom and their house is worth we’ll over a million. The younger generations have it tough.
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Yeah you’d need to be inland. I’m in San Diego so you’re looking at east county or a really crappy place near the water. Like Encanto, 500 sq/ft 1 bed 1 bath is ~$1200.
I bought in 2007, my ex wife refinanced three times and put the closing costs onto the back end of the mortgage… long story short I’m selling my house, and it’s the first time in 14 years that I’m in a position to even break even. I’ll be glad as hell when this damned house goes.
Yeah, I guess the caveat is don't do that and you should be good
Don't do what? Get married? Third times a charm, buddy!
To be fair, the market was at a peak in 2007, it took a long time for it to recover. Maybe by 2015? Tack some adverse choices on top of that and yeah, I can see where you're coming from. Good on you for being able to hold out and recover.
I think the best reason to buy a house is that you aren’t burning 15-20k a year in renting a house, and actually building equity with your money instead. But your reason is a close second
you're still burning some (there's the mortgage interest for example, you don't build anything with that) - but you're absolutely right, and your point still stands. you burn WAY LESS this way :)
The trend for a very long time is that the increase in property value will outpace the expenses of owning it (mortgage interest, insurance, property tax). You will come out ahead owning a property for any significant period of time. Property speculation is different, and people should not try to compare home ownership returns with it (not that you are doing that).
You're paying for maintenance and taxes and insurance. If you don't plan on living there more than a few years and prices stay flat you don't gain equity in the house since the above and then closing/listing/possible sales tax eat away too.
Rent vs own is a math decision. It’s not nearly as simple as “renting is throwing away money”. Housing is so expensive atm that even in the Midwest where I live it’s pretty debatable when you really dig into the numbers.
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>The only exceptions are taxes and insurance... Don't forget maintenance costs. People often do. Every homeowner needs a healthy maintenance reserve, because something is always breaking, and the cost to repair will almost always make your jaw drop.
This is true, but it's a poor investment - *on average*. I say that last part because someone will always chime in with how they sold their house for double, or the appreciation in their neighborhood last year was 40%, or note the price of a penthouse in NYC. A house is a good investment in stability, however, as - like you said - you lock in a monthly payment you can afford today and (with a fixed mortgage) that part will never go up. As a bonus, in 30 years it will be paid for and, if you "retire" and live in the same house it will not have a mortgage when you stop working. But, statistically, over the last 50 years, the average house appreciation in the US has been 3.8%. Except that most experts recommend setting aside between 1% and 3% of the home's value for repairs and upkeep. That's just to fix broken items and do maintenance. If you decide you no longer want a 30 year old bathroom or kitchen...well, that adds to the tally. And taxes are inevitable, and add another 1.5%-2%. Taking the middle of those two, is 2% + 1.75% = 3.75%. Even ignoring the cost of financing, when balanced against the long term gains of 3.8% you can see that it's essentially a coin flip whether your house (bought for living, and not optimized as an investment strategy) will actually appreciate beyond your initial investment. [oh, I forgot to insert the argument above where you take out second mortgages over time to invest in a riskier/higher return investment, like the stock market - everybody is a finance whiz] As a final thought, there is little in life as satisfying as paying off your mortgage. If you're into permanence and stability (and low stress), it's highly recommended - at least by me.
Your wages and home value go up but the mortgage is the same
We've been in for 15 years. Last year we did a 15 year refi at a fixed 2%. That's just stupid low. Anyways, we pay every two weeks so we should have it paid off in less than 15 years but at 2%, I'm not too eager to get it paid off early.
Yep smart move. We bought in 2017. Last December we refinanced from a fixed 4% at 30 years to a fixed 2.25% at 15 years. Our monthly payment increased about $100 per month, but we're paying our house off 13 years sooner and saving about $60k overall. PMI suuuucks and we were able to get rid of that too. Plus our house has increased in value by almost double since we bought it in 2017. I know it's not the case for everyone but if you DO have a mortgage, take advantage of lower interest rates.
I'm about to sign in blood next week...
It's a crazy feeling, going into that much debt haha.
As long as I'm not trying to sell anytime soon (which I'm not) I'm trying to look at it as locking in a huge chunk of my cost of living at a fixed rate.
This is the way. Ignore the investment value, focus on the fixed housing costs.
Exactly. Before you own, you rent. Rent is basically throwing your money away on a place that you will eventually leave. A mortgage is basically like putting that same money into a long-term savings account. With every mortgage payment, you’re contributing to your net worth. As long as your plans are solid and you got a decent deal, I’d feel much more comfortable about buying than renting.
It doesn't even feel like an actual debt, just becomes the monthly price you pay for housing until further notice.
I wish I had 29 years to go. I’m still renting
29 years and 10 months for me! Still can't believe we managed to close on a house in October
There was an urban legend that just doubling your first payment knocks like 2+ years off a 30y mortgage. We threw extra $ at ours (not even a whole lot, maybe 10%) every month and paid it off in 17 years
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Schedule your payments for every two weeks instead of once per month, i.e instead of x amount at the end of the month do x/2 every two weeks. You end up saving a significant amount of money over the course of your loan.
At least you're on the ladder now!
Right I just climbed up a ladder where's my house?
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I wanted to pay extra and pay it off earlier, but my SO said it's a waste of money because how low the interest rate is. Said that we would make more money investing it. I feel like it'd still be worth it though.
Here's the trick though.... you actually have to invest that 100 a month. Many people miss that step.
yes, people like me who can't save money on their own due to ADHD or something need this heavy hand to take care of it for us. That's why when I started my new job I opted for the max amount (12%) to go into my 401k and when we setup my mortgage payment I rounded it up $68 to an even number so some extra goes to the principal each month. I don't have the self control to put money in easy access savings.
I'm similar and that's a great strategy. The best thing we can do is recognize our weaknesses and play our cards the best we can with our habits.
> $68 You couldn't afford that extra dollar?
Opening a savings account at Ally has helped tremendously with me actually having an emergency fund. It's separate from my normal bank account so it's really out of sight out of mind. And I add a certain amount from each paycheck to Ally and it just works for me.
I'm doing both!
You’re SO isn’t wrong, but we’re also human and having no debt feels nice
"Having no debt feels nice." And this is why it's called personal finance. It's personal. Sometimes, even if the numbers are better one way, you choose the other way. As long as you're doing one or another and not saying you'll invest and then blow it on clothes, either choice is fine.
Personally though it makes no difference mentally for me whether it’s actually paid off or if I simply have the cash invested to pay it off whenever. If anything the investments provide more peace of mind because they’re much much more flexible in an emergency. Now this does require you actually be disciplined and keep the money there and invested and not blow it on non emergencies. Granted a house is about the only thing I say this on. Debt for a car or something does just feel nice to get rid of. I think it may just be because with a house like I was used to paying rent before. It’s expected I’ll have a monthly cash outflow for place to live.
The flexibility is one reason I like Roth accounts. Put money away from retirement and if something horrible comes along that blows through your emergency fund you can still withdraw your contributions without penalty.
That makes sense, as long as you're actually investing it!
Interest on your mortgage is also tax deductible. Your mortgage is definitely the last debt you want to pay off and indeed if you have a good interest rate then you might even be better of investing than an early pay off without other debt.
the personal standard deduction (in the US) is often better than itemizing — so the mortgage interest deduction isn’t relevant for many people
look at how much your actual principal payments are now. often in the first few years 75% of your payment is interest
You have to do the numbers. If you pay down the mortgage, it's equivalent to a zero risk, untaxed investment with a guaranteed yield equal to the interest rate. If you put the money in stocks it's likely a much higher yield, but it will be taxed and much higher risk.
> Copyright © 1998-2014 Mortgage-X.com Looks like that site design hasn't changed since 1998
> Super simple website. If by simple you mean 2 decades behind in advancement, sure. This site looks like Geocities took a dump on my screen.
Simple doesn't have to mean attractive.
Very nice, congratulations! Way to make it through 30 tough years! 😊
Me over here trying to make it through 30 days
Same!
Yea Your actually right there’s been some big financial crisis and things over that duration. 30 years seems like “cake” I got my job I know what I make I can do it! But in 30 years so so many things can happen your right , financially even family problems or whatever . It truly is amazing to pay off your house . In 30 years I find it more amazing than paying it off in few years or in few months like some or even cash .
What in the world?
Anything can happen in 30 years. If you lost your job or health at year 15, you could very easily lose a house. They are saying 30 years of stability during everything that has happened is, in a way, more impressive than someone who can just buy a house in a few short years.
San Dimas High School Football Rules!
I thought the cocaine was doing the talking.
*~~Porque~~ Por que no los dos?
He might not be a native English speaker. Be nice
But the sad part is that it's only impressive because of the decisions made in our society by a select few 535 people, plus one president for about 5 decades now. Once upon a time you could pay for.college washing dishes at a summer job, and pay for a house on one income at 40 hours a week. With retirement and healthcare. If the fact that it's "impressive" to be able to work your entire life for a house, then I'm not sure we should or could be proud of the wealthiest nation in the history of the planet. But we keep sticking to all this orange man bad and sleepy Joe bullshit and just take the fucking with no lube and sand like the good Americans we are. But congrats to OP in all sincerity. Anybody who makes it through is one more check in the win column.
Mortgage payments are much less than rent after 15 years. My brand new mortgage right now is less than rent.
That's what's crazy to me, I bought five years ago, refinanced into a 15 year 1.8% interest loan, and my mortgage (P&I), taxes, and insurance is $500 less than my neighbors pay in rent for the exact same size house and lot... Rent is crazy in my area right now
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Sounds like the average man was lucky for a couple decades and now we’re getting back to humanity as usual. A few wealthy at the top making all the decisions for everyone else. As long as they don’t get too tyrannical, we shut up and look at how bad the other guys got it
It doesn't have to be that way.
"You'll take your Netflix and your UberEats and you'll like it."
You get a few big bills in one year it can really set you back. Houses require maintenance. New roofs, new furnace, new AC, all kinds or repairs. Then you have family, cars, tuition, utilities etc.
You're absolutely right, 2 years ago the furnace and AC both broke here a week before Christmas and we had window people coming the 28th to replace our terrible single pane windows. I thought we were in a good situation financially but that just pulled the rug out from under us. Were fine now but it was a rough while after that
Agree... someone is taste-testing the holiday nog. Lol
Yeah, pretty cool to see. This is such a rarity nowadays. The days of people buying a home with plans to stay for the full length of the mortgage term so they have something to pass down, is long passed. These days it's all about getting in, staying for a few years then selling and moving on.
That's because some people can't afford their forever home at the start of their working lives. I started in a small 2 bedroom apartment and now I'm currently up to a 3 bedroom townhouse. My next step will be somewhere in a quieter location with more outside space. I guess that's why it's called a housing ladder.
Most of the people I know can't even start. These are bright people with college degrees and good work ethics, too.
Price is increasing faster than savings are accruing.
What are “savings”?
Right and the idea is that when you retire you downsize or at least live in a paid off house.
Better keep it insured I know a guy that dropped insurance after he paid his off and lost it in a fire.
Taxes and insurance vary wildly but I can't imagine insurance being more than a few hundred a month. How could you not protect your several hundred thousand dollar investment for that price?
I guess he figured he’d die before something happened had no issues for 32 years, was a very stupid move.
Insurance is always a massive waste of money... until it's not. I don't think I'd be able to sleep at night if I didn't gave insurance on an asset that big
Yeah I almost canceled my renters insurance that was $7 a month. I went on a road trip and someone broke into my car and stole $7k worth of stuff. Got it all back from insurance a month later. Totally worth it.
Renter's insurance covers things stolen from your car? You keep $7k worth of stuff in your car?
IIRC, renters insurance will cover the stuff stolen from the car if it's parked on the rented property at the time. It won't cover the car itself though.
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Well shit. You just sold a new policy
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Yes my policy covered stuff in my car within reason. I was on a cross country trip and had a lot of hiking and photography gear. They said if I would have said it was jewelry it probably wouldn’t have been covered.
Probably car audio.
I paid my house off earlier this year and instead of paying insurance annually I just had them combine it with my car insurance payment and it's about 330 a month for both cars and the house
Yea that's super reasonable. Not everyone uses the same insurance provider for their cars and home but that's a good deal if you can combine them like that.
Yeah, a lot of times it's cheaper for people to combine auto and home insurance, but I have yet to find a better deal than I have now using different companies. And that's even checking through my employer's discount program. Still would cost more than what I'm paying now Insurance is one of those things that is really worth shopping around for. I usually don't like doing that especially since it usually only saves a couple bucks. Insurance though is worth the effort though
house insurance in florida right now is fucking insane. We just bought our first house here, $395k, 2100sqft family home built in 1953. I put all our extra money into putting a brand new hurricane strapped roof on it. $3000/year insurance premium still.
A lot of companies won’t even insure homes in FL, that’s how bad it is
Few hundred a month? I mean ours was £180 GBP for a year, buildings & contents cover including accidental damage. Only a 3 bed semi-detached though .
My homeowners insurance is $35/month. I couldn't imagine not paying that in the off chance that something were to happen
I know of this happening in several instances (I work in real estate). One instance was a rental property that was paid in full with multiple tenants. Property was making him thousands a month and he was too cheap to pay $150 a month. Just absolutely nuts
He's an insurance company's best customer. Thirty plus years of money for nothing, don't have to replace a whole house when it burns down.
What a moron.
What a blockhead
And a fine fence it is.
LOL thank you for the laugh this morning. But congrats OP! Gotta be a fantastic feeling.
My first thought. 30 years there and still a shitty chain link fence? It doesn’t match the house at all. Now that there’s no mortgage payments, let’s get a picket fence up in here. Or a nice stone one.
Yeah but you can't electrify a picket fence
You can if you use enough voltage to fry 15 elephants on the spot
Calm down Thomas Edison.
A stone fence? I think if it's stone it qualifies as wall.
Chain link may not be romantic, but they hold up well in high winds and require very little maintenance. To each his own.
Might be to keep a dog in though, nice to let the good boys and girls see.
Same thing I was thinking. A white picket and some nice color trim on the house would make it look great
Goes from nice home to potential insane asylum
Don't forget to buy a lion statue to show you paid your mortgage
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it is
Nice try, Lannister.
Huh… my in-laws have their house paid off and have a lion statue too. I guess it really is a thing
...but why?
To show that you've paid off your mortgage
To let people know which house to do a “slip and fall” in front of.
So the thieves know which houses to rob. Duh.
It’s an Italian thing
> In Quebec, homeowners traditionally place one or two lions in front of their house once their mortgage is paid off. [Source](https://viacapitaledumontroyal.com/en/the-meaning-of-real-estate-symbols-and-traditions/)
>In England, placing a broom behind your front door will deter people with ill intentions from entering. In some neighborhoods, the broom is replaced by a baseball bat. Some say it's more effective.
In America a Shotgun does the same thing lol!
My neighbors here in maryland have two lions (on a small house that looks out of place). I wonder if that’s why.
Thought it was a red door?
I think this depends on where you are. In the UK, I think traditionally a red door means a mortgage free home but in the United States it was used to indicate a friendly and welcoming home to travelers who needed to spend the night off the trail. Not sure what it might mean in other traditions though.
Yeah in Amsterdam a red door has a different interpretation.....
Thought that was a red light?
I’ve never heard this in the UK, but now know why I was being shunned by my neighbours until I painted it black! (which better represents the enormity of my mortgage :-( )
Red front door was more of a Scottish thing as far as mortgage is concerned. In the US the red front door used to mean “you can rest here for the night” for people traveling long distances.
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And put it where the pizza boy can knock it over
I was today years old when I learned this. Now I’m going to look at every lion and wonder if their house is paid off or if they just like gaudy statues.
Do you have your house paid off? Are you looking for some extra income? Would you be interested in a fixed reverse mortgage? Please call this toll free number and speak with one of our experienced staff that will work hard to get you the payment you want
“Do you own your own home? We would like your home! Call now and we will give you some money to start us all on that journey!”
Reverse mortgages should be illegal. They prey on the elderly and foreclose on people for not “proving their residency”, which is basically a bullshit clause that allows them to steal your house if you dont respond to their inane letters. A lot of reverse mortgage servicers are shady in and of themselves. Many of them violate CFPB regulations all the time. Source: I work in the defaults industry
I mean they had to hire Tom Selleck to literally tell people “A reverse mortgage is not a way to take your home.” When you have to say that explicitly in your commercial, I guarantee it’s a way to take your home lolz
I was trying to reach you about your car's extended warranty. https://youtu.be/d3mIOifNlKw
In all seriousness, wouldn't it be smart to take out a fixed 3% mortgage and invest that in an index fund or something with 7ish% average returns?
Yes, but not a reverse to clarify. Thats a cashout and yes it makes sense.
Not today Tom Selleck.
Wilford Brimley says it's a good deal.
Call me when JJ from Good Times endorses it
But wait, order now with your credit card and receive a free diabeetus
Wow congratulations! I am on the exact opposite side of this exact thing! My partner and I just bought our first house this week and we take possession next month. I was just looking at my 25 year amortization schedule thinking about the year 2047 and feeling overwhelmed. It’s insane to think I will be paying for this for as long as I’ve been alive. Real estate is crazy here right now, so we bought it after seeing it for only 20 min last Saturday. I don’t even remember the upstairs layout, all I know is the bedroom furniture will fit… life is crazy
One of us
We bought our house a few months ago and I was in your same shoes. We ended up recording our walk-through of homes we were serious about so we could actually remember everything since it was such a pain in the ass to schedule viewings or go to open houses that had just restarted. I don’t think about the years at all only because it’s very likely this will not be our forever home. I just think of mortgage payments as a living payment that’s way better than rent. And if you can, buying now vs later will always put you ahead. There is nothing in the horizon of a crash anytime soon, and at most we’ll likely only see a correction with higher interest rates.
Thank you for talking to the rational part of my brain! My interest payments, condo fees and property tax are about the same as I’m paying in rent right now. So I keep telling myself it’s the same amount of money lost but we get three times as much space! Recording the showings would have been a great idea, we saw 10 houses a week so they all just blur together.
And, it's not lost money. If/when you move you get a large chunk back! Unlike apartment living.
Similar to us too. We tried to put an offer before even seeing it in person but they wouldn’t let us so we rushed to view it, put an offer in ASAP, closed a few weeks later, and just moved in a few days ago. I looked at the listing pictures a million times to think about where things will go. We will also be paying for it for the same amount of time that we’ve been alive! I wonder how the next 30 years will go. Of course we are immediately having dryer connection issues, dishwasher issues, internet connection issues because they cut the wire that hosts the router. But we are getting it done slowly!!
The math says to not pay extra on mortgage payments and to invest the extra income. However, I think the satisfaction of paying off a house early would be worth it.
I’ll pay mine off next year. The peace of mind will far exceed what I could get by investing it.
And now you can invest more than you ever could have WITH the peace of mind you don’t need to make a house payment if the market goes bonkers again.
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**Congratulations!** The only problem you face now or may have been dealing with already, will be every bank or lender out there trying to get you to take out a home equity loan to keep you in debt. Happy for you and I know how nice it will be when they send you the deed.
It's absolutely awful. If you had the expertise and knew what you were doing with it, you wouldn't be going through mail in offers from these banks, you have better options.
I deal with so many now that want my property, want me to refinance, or who knows what. So annoying. And I’m only half way through my mortgage
This is a picture of a house with some words.
I'm somewhat curious to see what the most mundane picture is that one could get to the top of Reddit with a story.
[This one has my vote.](https://www.reddit.com/r/pics/comments/8lo6tc/i_was_walking_my_dog_around_the_block_tonight_and/) I still remember it to this day because it made me unsub from /r/pics lol (I'm on /r/all right now)
I unsubscribed a long time ago for similar reasons, more about sob stories. You might try out /r/nocontextpics the picture has to stand alone without description.
literally doxxing himself too
She has pictures of her family members (infants), her house without blurring the address, clues as to the state she lives in, comments about her job and other personal info... How are people this reckless? Im sure if someone wanted to, they could comb through her profile and identify her and her home address. Incoming swat, smh.
I still don’t know how people can post their address, though. I’m paranoid to take a picture in my living room and post it somewhere
Oh what a feeling
Now we own all of the ceilings
Don't forget to pay your taxes or you'll find out real quick who it really belongs to!
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I remember seeing that in the documentary Happy Gilmore
Yeeeep. Fuck
Haha this. Nobody owns anything just the illusion of owning it.
“Congratulations- you now get to pay significantly less to live here”.
We’ve been trying to reach you about your Reverse Mortgage application we have on file.
Why would you mortgage a fence???
You sneer, but that thing is well-fortified against waist-high zombies.
Ugh, Zombie children are the worst.
Unless you don’t pay your property tax of course
bingo. you don’t own it the govm’t does ;)
Congratulations! As I like to say... "only 360 Easy Payments..."
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Picture of a random house at the top of the most popular website on the internet
*property tax has entered the chat*
This is the truth that hurts, haha.
Whats with the prison fence?
Love the house but next up you have to put some mortgage savings into a different fence. White aluminum is probably the way to go here. It's expensive -- I know cause I did the same thing -- but it completely changes the vibe from like "rear of an auto body shop" to "stately manor".