help on home owning

[LILYJINKS]

my husband and i are in our middle 40's we still owe 20 years on our home. we will be retiring age in 20 years.other than sending in a little extra money each month with our home loan. any other suggestions.

[jasonnoguchi]

I am afraid paying off your mortgage is the only way to get rid of it. As such, you should seek to expand your means of income and strive to pay off the mortgage early.

[maat55]

Do you invest in mutual funds? Do you have a Roth IRA? Do you have a low interest fixed rate on your mortgage(If not, converting your mortgage to a 15 year note might shorten your term without raising your payment)

[buildmybudget]

You can also take the approach to paying half of your mortgage payment every two weeks rather than just one payment each month. This technique can help you cut off as much as 7 years worth of interest....as long as your bank applies the payment right away. If you have any debt, I wouldn't recommend putting any extra money into the house before the debt is payed off.

[LMA]

I would suggest to put that extra money in an account where you can invest it. If you can squeeze out a 10% return on that money for the next 10 years then you go ahead and make a lump sum payment on your mortgage.

This way your money grows and accumulates interest and you will have more to pay off the mortgage than if you did extra payments every month.

[cschin4]

First, I am also in my 40's. My spouse and I aggressively sent in every extra dime and paid off our mortgage. Our home is paid off in full.
I would highly recommend that you send in additional principle in as much and as often as you can. You don't really need to bother with paying every 2 weeks. Just send in additional principle with each monthly payment. Merely paying the equivalent of one additional mortgage payment per year will take years off of your mortgage.
Those who think that it isn't wise to prepay, well who knows if they are right. All I know is that if I would have paid my mortgage over 30 yrs I would have paid the equivalent of 3X the purchase price of the home even at a low interest rate. Does it really make sense to spend an actual $1 and "get back" 20 cents? Seems dumb to me. We pounded away at our mortgage and paid if off in 5 yrs. Nobody can tell you what the "right" thing to do is.

[cschin4]

I would suggest to put that extra money in an account where you can invest it. If you can squeeze out a 10% return on that money for the next 10 years then you go ahead and make a lump sum payment on your mortgage.

This way your money grows and accumulates interest and you will have more to pay off the mortgage than if you did extra payments every month.

That always sounds good. I don't where anyone is getting a "10% return" right now. It is best to look at the reality of one's life. There are people who are disciplined enough to invest and monitor their money, etc. However, there are many people who just don't have the time or inclination to do this and the best investment for them is prepaying and paying off their home.

[Ima saver]

I agree with cschin4. I have had my mortgage paid off for many, many years. I just paid as much extra as I could every month.

[cschin4]

Ira - What convinced me was getting an amortization schedule of my mortgage. When I realized I would pay over $100K in interest including the principle (in REAL MONEY) that was enough to convince me of the way to go.

[disneysteve]

I've always been a middle-of-the-road kind of guy. First, we paid off all debts other than the mortgage. In our case, that was student loans and a home equity loan. We contribute the max allowed to my wife's 401k. We max Roths for each of us every year. We fund a 529 for our daughter's education. With some of what remains, we make extra payments on our mortgage. We don't send in "every extra dime" but we are paying at an accelerated rate. We have 18 years, 6 months remaining on the original schedule but that doesn't count extra payments already made which probably have shortened it by a few months already. As retirement nears, I will most likely increase the extra money going to the mortgage. I'd like to be mortgage free at least a couple of years before retirement. That would allow us to sock away a nice extra cash cushion to be ready for when I do retire.

We are both 45, so pretty much in the same position as OP.

[jasonnoguchi]

I personally hold mortgage only in my investment properties where I am making a positive rental cashflow. I buy my live-in home with cash even though it took me longer than other people to buy a house that is smaller. Being financially easy is more important to me than a beautiful house laden with debt.

[Snodog]

Ahh the old pay off the house or invest debate. I don't think there is any right or wrong answer. Depends on how much you value security vs. taking a chance and maybe getting a better return investing.

We decided to put money in 401k's and roth Ira's(instead of paying extra on mortgage) as I think the security of having your house paid for is somewhat overrated. For example if things get so bad that I couldn't afford my $360 house payment chances are I couldn't afford the real estate taxes either. Plus there are other ways you could loose a paid for house. And I don't plan on ever filing bankruptcy(who does?) BUT money in retirement accounts is protected where a house is not.

We will have our house paid off in our early 50's anyway as we bought at an early age.

With the stock market the last couple of years I'm thinking maybe I should have paid off the house instead but hindsight is 20/20.