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Very quick post-mortgage refinance

October 23rd, 2017 at 11:53 am

Hi all

Still struggling to get my mortgage refinance.. still doing paperwork but STILL very glad I am doing it

I will post more later.. VERY swamped with work and school. will share later

interesting quote I read just now..this is NOT my quote. This was in response to a retiree asking if they should go down to a 15 year mortgage

"With the stock market averaging 7% after inflation and deductible mortgage interest at 3.6% equivalent to 2% I would not consider putting a spare dollar into and early mortgage payment.
That 140,000 more for the 30 year mortgage isn't going to be worth even half of that in the dollars you will be paying in 30 years.
The longer you have the mortgage the cheaper it is to pay it off. 100,000 after taxes in a 401k is earning 7000/year. 100,000 in home equity is saving 3600/year. "

7 Responses to “Very quick post-mortgage refinance”

  1. crazyliblady Says:

    But what about the piece of mind you get from having a paid in full home to live in when you retire? Or if when you retire, you could sell it? I am paying a little bit of extra on my mortgage, but am more concerned with having credit cards paid off and enough in retirement in savings to survive.

  2. Rachael777 Says:

    I think paying off the house is a personal decision and it is related in part to if you want to stay in the house for the rest of your life. Although I have a nice house I do not want to stay here the rest of my life or really even very long. I too though believe in having the house paid off before full retirement but this year or 6 months has been a real 'thinking' year and I do not think my income is going to drop that much in the near term so I want to save as much as I can and just bank it for now. I do not have that much savings as compared to non liquid investments. Will share more this week. School homework calls! Smile

  3. snafu Says:

    I wonder if it has to do with how and were people grew up. In some countries, the culture revolves around families and savings. Does a major part of an individual's decision making process have to do with their RISK tolerance. Right now, CC interest runs around 18% while interest on a pure savings account mostly runs around 1%, possibly, short term special at 3%. Inflation for a typical household runs around 3% - 4% so regular, bank saving is an automatic money loss but I will never convince SA forum savers.

  4. AnotherReader Says:

    Paying off your mortgage is always a debate. So much of your net worth and retirement income is in those rental houses. My objective in your shoes would be to insulate that income stream as much as I could. In your situation, I would do what I am doing, paying off the rentals, piling up cash, and putting small regular amounts in the market as I wait for a substantial correction.

  5. Rachael777 Says:

    I love the advice and insights I get from this forum!! I will post an update soon. Rachael

  6. LivingAlmostLarge Says:

    I guess paying the house depends on how you see your house. I see it as something I rent for now. I will pay off the home I live in during retirement. But I don't think this is it. So paid or unpaid it doesn't matter to me. It's semantics. Either I have enough in savings to pay for a house cash or I don't period. Right now while working it's a moot point because in 5 years if we decide to "retire" and pay off the house at that point then it's the same thing as if I paid it early now.

    I just bought myself flexibility to decide.

  7. rob62521 Says:

    Snafu, I think you nailed it...it is what people grew up thinking. It had been a dream of ours to have our home paid off and we worked to do so. But we also bought less than we could afford. I will say after having it paid off, it sure freed up monies to go elsewhere and as a result, we could invest more. Real estate isn't always a great investment as the 2008 recession proved.

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