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re: I am in a position to pay off mortgage
Posted on 11/1/10 at 4:08 pm to Tiger JJ
Posted on 11/1/10 at 4:08 pm to Tiger JJ
quote:i already said in my first reply three pages ago to refi if he plans to keep the mortgage.
but no 5.4%.
quote:fine, then I really don't have an obligatory mortgage payment for as long as I keep the house. and i really don't have to pay that money to the bank. inflation or not, zero is zero.
Funny you use the word "real" - because if you take inflation into account, then that $186K less in the future than it is now.
quote:never said it was a cure all. he just asked should he pay it off or not. i said in my very first reply and have repeated several times that mathematically you're better off to keep the mortgage. but for some reason you completely ignore that fact in every response you make. are you that much of a contrarian?
It's very easy to digest - buying your house down to 0 today is not some kind of economic cure all.
1
Posted on 11/1/10 at 7:15 pm to Lou
quote:
i said in my very first reply and have repeated several times that mathematically you're better off to keep the mortgage. but for some reason you completely ignore that fact in every response you make. are you that much of a contrarian?
Ironically, I don't necessarily agree with you that the straight financial math for re-investing that money always works. Someone on here said you can safely assume 10% from equities and I think that's insanity.
But you're right, I don't really think there's much disagreement here. My main point is that the "pay it off now" people seem to really overstate the benefits of doing that while at the same time really understating the risks. It's been presented here by some as kind of a no-risk choice...and it isn't.
Posted on 11/1/10 at 8:06 pm to Tiger JJ
quote:Well summarized.
the "pay it off now" people seem to really overstate the benefits of doing that while at the same time really understating the risks. It's been presented here by some as kind of a no-risk choice...and it isn't.
Each option has its risks. Intelligent investment/decision-making dictates one understand those in each case. It isn't entirely apparent the pay-it-off crowd does.
Posted on 11/1/10 at 8:39 pm to NC_Tigah
quote:Agreed.
Each option has its risks.
quote:I'm in that crowd and I do.
Intelligent investment/decision-making dictates one understand those in each case. It isn't entirely apparent the pay-it-off crowd does.
I paid both of my mortgages off years ago and I have really enjoyed not having those monthly payments or that debt hanging over me. It gave me GREAT peace of mind.
I recognize I could have had the money in the bank (or, in my case, more stock in the my brokerage account) but when I had that additional stock in my account, it didn't give me the same satisfaction I felt after I paid the debt off.
I am LSURussian and I approved this message......
Posted on 11/1/10 at 8:48 pm to LSURussian
quote:I wasn't talking about you, you "dickbag douche"
I'm in that crowd and I do.
I paid both of my mortgages off years ago and I have really enjoyed not having those monthly payments or that debt hanging over me. It gave me GREAT peace of mind.
I recognize I could have had the money in the bank (or, in my case, more stock in the my brokerage account) but when I had that additional stock in my account, it didn't give me the same satisfaction I felt after I paid the debt off.
I am LSURussian and I approved this message......
Posted on 11/1/10 at 8:51 pm to NC_Tigah
This is the longest thread since the great Beta discussion of spring 2010.
Posted on 11/1/10 at 9:37 pm to NC_Tigah
quote:
I wasn't talking about you, you "dickbag douche"
That's MISTER dickbag douche, to you, sir!
Posted on 11/1/10 at 9:39 pm to TheHiddenFlask
quote:Put on your kevlar vest and go to the O-T and check out the 'home invasion' thread. It's going on 90 pages now.
This is the longest thread since the great Beta discussion of spring 2010.
TigahRag is getting bitch-slapped in it pretty bad. It's sad to see the Great Ones get old.
It's got the anchor, too. I think an Admin felt sorry for 'Rag. It got the anchor when the body blows started landing.
Posted on 11/1/10 at 9:44 pm to LSURussian
I was only referring to the money talk board, but I agree about seeing rag get slammed.
Posted on 11/2/10 at 9:52 am to NC_Tigah
quote:
the "pay it off now" people seem to really overstate the benefits of doing that while at the same time really understating the risks. It's been presented here by some as kind of a no-risk choice...and it isn't.
Well summarized.
Each option has its risks. Intelligent investment/decision-making dictates one understand those in each case. It isn't entirely apparent the pay-it-off crowd does.
Since I'm in the pay-it-off crowd, can you all help me understand the risk of a paid-for home?
Posted on 11/2/10 at 10:27 am to 1p56
quote:
Since I'm in the pay-it-off crowd, can you all help me understand the risk of a paid-for home?
They've been enumerated in this thread. If you still have questions after going back and re-reading, I'm happy to discuss it at that point.
Posted on 11/2/10 at 10:51 am to Tiger JJ
Way to test my republicanhood on vday bro! 
Posted on 11/2/10 at 10:55 am to 1p56
My wife voted by mail for us last week...I have nothing but free time.
Posted on 11/3/10 at 12:14 pm to rtbtiger
This is what I have been doing for "some" of my "disciplined" clients, and I mean only the disciplined clients.
Refi to the 3.8% 15 year. Put the cash you currently have available to pay off the mortgage in a brokerage account with a very reputable advisor. Invest that cash into individual bonds and "insured municipal investment trusts".
Don't invest in any bonds longer than 10 years. The ins muni trust are going to be long but its okay as they are tax free and pay monthly. Make sure the individual bonds are also ranked "BBB" or better and companies with high cash flow.
Then use the interest payment to pay your mortgage. You may have to add some of your own monthly income to cover the payment, but in 15 years or less you will own your house debt free and still have the money you invested.
At that point you have liquid assets, the money invested, and you have your home as an asset.
The problem with paying off your home is you can't really consider your home a liquid asset. If an emergency or any other potential investment opportunity present itself, you can't or don't really want to have to sell your home. Not only is it your home, but it may be a bad time to sell.
Also, invest in multuple bonds of multiple companies and industries. $5,000 and $10,000 blocks. Its more work for the advisor and may take several months, even years to complete the portfolio, but a "good" advisor will do this for you because it "Right".
Sorry for being long, excuse the grammer or mispells. I hop this helps your decision making. You are in a great position! And don't let anyone talk you into putting these funds into stock or mutual funds! The risk would negate the strategies benefit.
Good luck!
Refi to the 3.8% 15 year. Put the cash you currently have available to pay off the mortgage in a brokerage account with a very reputable advisor. Invest that cash into individual bonds and "insured municipal investment trusts".
Don't invest in any bonds longer than 10 years. The ins muni trust are going to be long but its okay as they are tax free and pay monthly. Make sure the individual bonds are also ranked "BBB" or better and companies with high cash flow.
Then use the interest payment to pay your mortgage. You may have to add some of your own monthly income to cover the payment, but in 15 years or less you will own your house debt free and still have the money you invested.
At that point you have liquid assets, the money invested, and you have your home as an asset.
The problem with paying off your home is you can't really consider your home a liquid asset. If an emergency or any other potential investment opportunity present itself, you can't or don't really want to have to sell your home. Not only is it your home, but it may be a bad time to sell.
Also, invest in multuple bonds of multiple companies and industries. $5,000 and $10,000 blocks. Its more work for the advisor and may take several months, even years to complete the portfolio, but a "good" advisor will do this for you because it "Right".
Sorry for being long, excuse the grammer or mispells. I hop this helps your decision making. You are in a great position! And don't let anyone talk you into putting these funds into stock or mutual funds! The risk would negate the strategies benefit.
Good luck!
Posted on 11/3/10 at 12:41 pm to LSU0596
quote:
This is what I have been doing for "some" of my "disciplined" clients, and I mean only the disciplined clients.
Refi to the 3.8% 15 year. Put the cash you currently have available to pay off the mortgage in a brokerage account with a very reputable advisor. Invest that cash into individual bonds and "insured municipal investment trusts".
Don't invest in any bonds longer than 10 years. The ins muni trust are going to be long but its okay as they are tax free and pay monthly. Make sure the individual bonds are also ranked "BBB" or better and companies with high cash flow.
Then use the interest payment to pay your mortgage. You may have to add some of your own monthly income to cover the payment, but in 15 years or less you will own your house debt free and still have the money you invested.
At that point you have liquid assets, the money invested, and you have your home as an asset.
The problem with paying off your home is you can't really consider your home a liquid asset. If an emergency or any other potential investment opportunity present itself, you can't or don't really want to have to sell your home. Not only is it your home, but it may be a bad time to sell.
Also, invest in multuple bonds of multiple companies and industries. $5,000 and $10,000 blocks. Its more work for the advisor and may take several months, even years to complete the portfolio, but a "good" advisor will do this for you because it "Right".
Sorry for being long, excuse the grammer or mispells. I hop this helps your decision making. You are in a great position! And don't let anyone talk you into putting these funds into stock or mutual funds! The risk would negate the strategies benefit.
Good luck!
Nice
Posted on 11/4/10 at 9:57 am to Tiger JJ
I thought of another potential solution for the "pay it off now" guys. You could refi to a 1-month ARM (probably interest-only). I'm guessing the rate is in the 2%'s somewhere. That is the closest thing to free money in that size that you are ever going to get (particularly if you can itemize). If rates stay down here, then it stays cheap. If they spike or something, then just pay the thing off.
Posted on 11/4/10 at 12:15 pm to Tiger JJ
quote:meh . . . not so much IMO.
I am in a position to pay off mortgage
I thought of another potential solution for the "pay it off now" guys. You could refi to a 1-month ARM (probably interest-only). I'm guessing the rate is in the 2%'s somewhere. That is the closest thing to free money in that size that you are ever going to get (particularly if you can itemize). If rates stay down here, then it stays cheap. If they spike or something, then just pay the thing off.
Works as margin, but not as an inflation hedge.
If you do lose money employing that scheme, then inflation happens to hit your ARM, you'd be doubly hosed.
Posted on 11/4/10 at 12:33 pm to NC_Tigah
quote:
meh . . . not so much IMO.
Works as margin, but not as an inflation hedge.
Yeah, no inflation hedge. Just paying small $ to stay more liquid.
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