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Posted on 6/17/22 at 1:16 pm to CaptainJ47
quote:
This x100. Total financial wealth would be better if the money you used to pay the mortgage was placed in a well diversified set of assets. You win psychologically by paying your mortgage off but your net worth in the long term suffers
Owning your house outright is a huge plus. Dramatically improves your cash flow. You have a house if anything bad happens (catastrophic illness, job loss, etc).
And we're in a bear market. The return over the next 18-24 months is better than the interest rate on the mortgage.
Posted on 6/17/22 at 1:17 pm to BabyTac
Posted on 6/17/22 at 1:21 pm to Epic Cajun
quote:
No shite, but the idea is to make more than 2% on your investments
i was implying a 5.5% rate of return by saying the 2% difference between that and 3.5% (loan rate) was well worth the psychological effects. i see how that was not clear, though, my bad.
now 5.5% might be slightly low as well, but not by a ton and i wasn't trying to nail the break even point, i just chose to type 2 instead of 3, basically.
the point of my post is unchanged.
This post was edited on 6/17/22 at 1:22 pm
Posted on 6/17/22 at 1:23 pm to Shexter
quote:
I'm at the point where if everything goes to hell, I can make a little over $200k from selling my house. That would give me enough to pay cash for some land and a double wide in Livingston Parish.
This is hilarious. Nice to know I could have the same backup plan.
Posted on 6/17/22 at 1:24 pm to rockchlkjayhku11
5.5% Jesus Christ. The fricking S&P 500 has an average rate of return over 10%.
Posted on 6/17/22 at 1:28 pm to Bestbank Tiger
quote:
And we're in a bear market. The return over the next 18-24 months is better than the interest rate on the mortgage.
What?
Posted on 6/17/22 at 1:29 pm to BabyTac
Congrats. I'm jealous.
Posted on 6/17/22 at 1:31 pm to rockchlkjayhku11
quote:
now 5.5% might be slightly low as well, but not by a ton
It’s off by a shitload lol.
Posted on 6/17/22 at 1:32 pm to BabyTac
Excellent work. It's a shame more folks aren't in this position.
Recommend you save and buy a rental via a foreclosure in the coming downturn.
Recommend you save and buy a rental via a foreclosure in the coming downturn.
Posted on 6/17/22 at 1:33 pm to BabyTac
quote:
Some say it’s not the most financially savvy thing considering my interest rate was 3.5%,
combined with if you're on the back end of a mortgage, you're paying mostly principal by now. Bad move.
Posted on 6/17/22 at 1:33 pm to BabyTac
Great job! Smart!
Posted on 6/17/22 at 1:36 pm to JohnnyKilroy
quote:
What?
If OP puts that same money into the market right now, he has a high chance of getting a negative return over the next 18-24 months.
The usual argument against paying off your mortgage early is you'd be forgoing a 7-8% return to save 4% in interest. That isn't the case in the current market unless you think we hit the bottom.
Posted on 6/17/22 at 1:39 pm to BabyTac
Go get a Heloc. Because you never know
Posted on 6/17/22 at 1:47 pm to Bestbank Tiger
quote:
The usual argument against paying off your mortgage early is you'd be forgoing a 7-8% return to save 4% in interest. That isn't the case in the current market unless you think we hit the bottom.
That makes sense if you are right near the end of your term anyway.
I was talking about the people who still have 5+ years left.
Yea paying more on your mortgage in june of 2022 is a better move *over the short term* than investing it, but that math changes drastically if you are looking beyond the next 1-3 years.
Posted on 6/17/22 at 1:57 pm to BabyTac
Now get ready for real estate taxes out of pocket.
Posted on 6/17/22 at 2:03 pm to rd280z
quote:
Now get ready for real estate taxes out of pocket.
They’re always paid “out of pocket.” 
Posted on 6/17/22 at 2:06 pm to Langland
quote:
My brother recently did the same thing. He said it decreased his credit rating.
Which is completely stupid.
Also not having any credit cards or having credit cards you never use negatively.
Makes zero sense.
Posted on 6/17/22 at 2:19 pm to BabyTac
Congrats!
Posted on 6/17/22 at 2:20 pm to BabyTac
I paid off a 417k home loan in 5.5 years. It is a good feeling to not owe a dime towards anything. I Just wish I hadn’t made the money mistakes I had made in my 30’s because I would be much better off had I not made those mistakes.
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