Anybody Buying Yet? Where’s the Bottom?

[Bonasababy]

There is nothing stopping someone from paying off a 30 year loan in 15 or 20 years. Allows for more flexibility if some months are lean. Takes discipline some don't have though.

 

[Nick87]

Yeah. I bought to own at least 10 and always hated the idea of starting over on the high interest side.

I couldnt have a swung a 15 year. But im glad i bought with a 30, and now owned 10, because if i had bought a place that was a big compromise with a 15 year id have paid the bank fees, realtors, and interest all again and lost out on a lot of appreciation. No immediate plans to leave, but its certainly possible with the equity.

Lots of people talk about 15 year loans with the privelage of buying at a time when a decent property was affordable with one.

You can pay a 30 off early if you want at no additional cost.

 

[El Jason]

My deferred comps have returned 34% the last two years. Way better than had I been paying extra into our mortgage. No set answer.

 

[Forkyfinder]

There is nothing stopping someone from paying off a 30 year loan in 15 or 20 years. Allows for more flexibility if some months are lean. Takes discipline some don't have though.

My deferred complaints have returned 34% the last two years. Way better than had I been paying extra into our mortgage. No set answer.

Yup.

If youre looking to pay off your mortgage asap - my opinion is to invest in sp500 and sell when its sale will exceed your mort balance. Ymmv.

 

[Jack Ryan]

Gas has been and is up what 60% since then? ( I acknowledge gas was an all time low in 2020 but it's still has been and remains up )

30% for vehichles. And before jack ryan the ultra boomer butts in not everyone has to buy a new vehichle but we all need transportation for work so I think.that number is relevant whether buying new buying used or repairing your current mode of transportation. We can't all ride a $*)Q!#@$ tabogan to work like I'm sure he did.

Homeowners and vehichle insurance has risen 50%

Those are just 3 other things that come to mind of things we have to buy everyday.
I'm pretty sure Icoukld keep the list going. But I'll try to tell the kids there eating too much.

No toboggans but I did drive several different car 100 miles a day to work and back, that I had to park on a hill and push to start.

If you don't want to hear it. Thats fine with me. I knew it all once just like you do Nick. Best of luck to your learning it one lesson at a time.

I doubt there are many "Ultra wealthy" posters here though there are probably quite a few who lived like you do once and now have not had to work or go to jobs for YEARS now. They didn't do it putting the banker's kids through college for him.

 

[Forkyfinder]

Yup.

If youre looking to pay off your mortgage asap - my opinion is to invest in sp500 and sell when its sale will exceed your mort balance. Ymmv.

PMI being an exception though. Get rid of that asap if you have to suffer through having it.

 

[Jack Ryan]

One thing I messed up on was moving around a lot. Id guide my kids to buy a house even if it cost a a little more that they think they will stay in. Compounding interest works that way too. I can't t ake it back but I can teach them, hopefully.

I'm sure they were born already knowing it all.

 

[BuzzH]

.

Pay off that mortgage if you have one. It is like an investment guaranteed to pay 10% dividend every year.

Rich people don't sit around lounging on top of piles of cash or debt either. Does anyone think Elon Musk is keeping an old mortgage load "just for the tax savings"?

That all depends on your mortgage rate.

It hasn't made sense in the past 10 year stretch to pay down a mortgage in the 3% range beyond your monthly mortgage. Assuming, and I get it, a big assumption that the extra money a person would have used to pay off a mortgage would have been better invested in the S&P. Why pay down a 3% loan when your money could have been earning 14-15%?

Carrying debt isn't a problem if you have a clue, and yes, rich people carry plenty of it.

 

[El Jason]

That all depends on your mortgage rate.

Ours is currently 2.75%.

I could easily pay off our mortgage with my deferred comp. However, even a caveman like me realizes 34% is greater than 2.75%.

I could care less about making a mortgage payment in retirement because it’s already covered and growing.

 

[BuzzH]

Ours is currently 2.75%.

I could easily pay off our mortgage with my deferred comp. However, even a caveman like me realizes 34% is greater than 2.75%.

I could care less about making a mortgage payment in retirement because it’s already covered and growing.

Correct. Ours is 2.85.

The rent we collect from our first house covers 80% of our mortgage. I see no good financial reason to pay this joint off early.

 

[El Jason]

All that said, I disagree that affordability is a hoax. I really feel for folks who are where we were 10-20 years ago. It’s a financial gauntlet.

 

[Hunters Intel]

BuzzH I would pay it off right now either with that current rate

 

[El Jason]

I would also consult with a financial advisor. I’m guessing some folks may be better off putting money into a variable life insurance policy rather than paying off a mortgage, depending on their interest rate.

We have term life policies through age 72 and are building a variable policy that will take over after that.

 

[Bonasababy]

Yep. Takes a LOT more down and more backing to get a 1st mortgage these days than it did when we bought our first place. And I owed next to nothing after college and grad school...and I worked in my field for peanuts most summers then.

 

[Nick87]

No toboggans but I did drive several different car 100 miles a day to work and back, that I had to park on a hill and push to start.

If you don't want to hear it. Thats fine with me. I knew it all once just like you do Nick. Best of luck to your learning it one lesson at a time.

I doubt there are many "Ultra wealthy" posters here though there are probably quite a few who lived like you do once and now have not had to work or go to jobs for YEARS now. They didn't do it putting the banker's kids through college for him.

I haven't claimed to know it all let alone much of anything for that matter since I was in my early 20's. You totally lost me at just put every raise your get in the bank and live off income from year x. I think that shows how out of touch you are with what it costs to raise a family right now today. Most things have gone up 20 to 50% in 6 years and I'm damn lucky
To have had a 20% raise over that time frame. We put a portion of every raise I get towards savings and retirement but at the moment I or hardly anybody for that matter can probably put 100% of it away. While still enjoying life even a little. And I'm not in the habit of putting everything i have way for when I'm too old to walk. It's all about balance Or at least thats my plan.

I'm not sure what you mean "live like I do" and I dont think you do either. I suppose you think because Im not 100% debt free i live beyond my means. Maybe and im ok with that but this isn't the 70's either. Last vehichle I bought I had the money to pay cash. But like @Wildabeest said it's literally sitting in a cd paying the same or more interest. For me, a guy raising a family of 5 one damn near one income (90%+) I'd rather have some liquid than a paid off vehicle in the driveway. if God forbid I can't earn tomorrow. Makes more sense to me but I'm sure thats not the way you did it either 30 years ago.

 

[Bonasababy]

I would also consult with a financial advisor. I’m guessing some folks may be better off putting money into a variable life insurance policy rather than paying off a mortgage, depending on their interest rate.

We have term life policies through age 72 and are building a variable policy that will take over after that.

Folks should thoroughly evaluate variable policies IMO. Our term ends about the same time but the mortgage payment is low and easily covered with SS and pensions and we dont think we need insurance after that. We arent looking to leave our kids a lot of money and I always figured we could make more investing fir what a variable costs.

But everyones situation is different.

 

[El Jason]

Folks should thoroughly evaluate variable policies IMO. Our term ends about the same time but the mortgage payment is low and easily covered with SS and pensions and we dont think we need insurance after that. We arent looking to leave our kids a lot of money and I always figured we could make more investing fir what a variable costs.

But everyones situation is different.

Certainly. Our term coverage is much higher than variable.

 

[Nick87]

That all depends on your mortgage rate.

It hasn't made sense in the past 10 year stretch to pay down a mortgage in the 3% range beyond your monthly mortgage. Assuming, and I get it, a big assumption that the extra money a person would have used to pay off a mortgage would have been better invested in the S&P. Why pay down a 3% loan when your money could have been earning 14-15%?

Carrying debt isn't a problem if you have a clue, and yes, rich people carry plenty of it.

I think it all depends on your lifestyle too. Some people its probably worth it mentally to pay it off early and thats perfectly fine too. There is no one size or right answer. Whether your paying it off early or making that money work for you else where your ahead of the majority and I'd consider that a win either way. Was just talking about this earlier this weekend with my Sister and BIL. We both have a young family on one income, they pay double on as many bills as they can and are trying to reduce debt anywhere they can. We owe on the house and one vehichle same as them but my extra income goes towards a mutual fund/growing savings and my wife's 401. The catch is they have about $2k in savings where we have probably 6 months worth available tomorrow. He may have a few less bills at the end of the month but I'm not putting myself in the position of no safety net. F THAT. especially on one income.

 

[BuzzH]

I think it all depends on your lifestyle too. Some people its probably worth it mentally to pay it off early and thats perfectly fine too. There is no one size or right answer. Whether your paying it off early or making that money work for you else where your ahead of the majority and I'd consider that a win either way. Was just talking about this earlier this weekend with my Sister and BIL. We both have a young family on one income, they pay double on as many bills as they can and are trying to reduce debt anywhere they can. We owe on the house and one vehichle same as them but my extra income goes towards a mutual fund/growing savings and my wife's 401. The catch is they have about $2k in savings where we have probably 6 months worth available tomorrow. He may have a few less bills at the end of the month but I'm not putting myself in the position of no safety net. F THAT. especially on one income.

Agreed, whatever your plan is, it has to be comfortable for you or its simply not worth it.

 

[Nick87]

Agreed, whatever your plan is, it has to be comfortable for you or its simply not worth it.

Just have a plan.