House Mortgage -- Countdown

[james.hendrickson]

I just dipped below $161K. Sitting at around $160,599.
About 15 and a half years remaining on a 20 year note.
I've never paid any extra on it thus far.

I bet you'd be a millionaire, or close to it, if you paid it off.

[Jluke]

I bet you'd be a millionaire, or close to it, if you paid it off.

Trying to figure this out.

what do you mean?

[bjl584]

I bet you'd be a millionaire, or close to it, if you paid it off.

If you mean equity in the house, then yes easily.

[james.hendrickson]

If you mean equity in the house, then yes easily.

Why not do it man? Why not get across the 7 figure mark?

[Jluke]

Why not do it man? Why not get across the 7 figure mark?

If he can pay it off then he is just shifting his assets. probably already a millionaire. Just shifting assets from cash to house would be a net zero change.

I would not pay it off.

my mortgage amount is the same as bjl

[bjl584]

Why not do it man? Why not get across the 7 figure mark?

The mortgage is manageable, and my money works harder in the market, so no real advantage to shifting assets around besides the peace of mind of not having a mortgage payment.

[Randomsaver]

Just wish to drop a quick HI to all my fine friends here! Wishing everyone a Happy Independence Week. Always nice to say that and commemorate but at same time apply the celebration in terms of freedom from Debt (be it full or partial) !

[skives]

As of yesterday the mortgage is down to $19,000

[james.hendrickson]

Mortgage down to: $300,170.03.

[Petunia 100]

No mortgage. No real estate either, so it's not as good as it sounds at first.

[Petunia 100]

As of yesterday the mortgage is down to $19,000

You're getting so close.

[LivingAlmostLarge]

How do you figure out how much of your house you own? Is it based on market value or original loan amount?

I forgot to respond to this but I base it on what we purchased it for we own 30% of that price now. I'm going to cross over in September 2 more payments August and September and I will go down another digit.

Also I realized I am paying $21k a year in principal which is a lot of "enforced" savings. That's why homes grow wealth, we are forced to save $21k a year in "rent". I would be paying the same in rent but none of it would be going back to me. My interest for last year was $16.5k so i pay more in principal than interest as well.

I know i shouldn't pay it off faster so I'm not but it's really kind of thrilling to see our only debt go down.

[kork13]

Also I realized I am paying $21k a year in principal which is a lot of "enforced" savings. That's why homes grow wealth, we are forced to save $21k a year in "rent". I would be paying the same in rent but none of it would be going back to me. My interest for last year was $16.5k so i pay more in principal than interest as well.

When I hear this argument, that buying a house is like paying yourself rent, I always argue the opposite -- a mortgage is like paying the bank rent. The money spent on interest & fees are lost to you, just like rent on an apartment is. On top of the interest payments, annual mx/repairs/insurance/taxes add to your equivalent "rent" payment, paid to the county, contractors, the insurance company, etc. -- this money is again lost to you, and would mostly not be your responsibility as a renter (at least, not directly).

I'm not discounting the value of forced wealth accumulation through building home equity over time .... But in the romance of being a homeowner, people often forget that there's alot of costs that goes along with homeownership. I'm many cases, renting truly is cheaper (net of all those factors) ... Though other (less-quantifiable) socioeconomic factors also play into things. So as with most issues, "it depends."

[Fishindude77]

I'm not discounting the value of forced wealth accumulation through building home equity over time .... But in the romance of being a homeowner, people often forget that there's alot of costs that goes along with homeownership. I'm many cases, renting truly is cheaper (net of all those factors) ... Though other (less-quantifiable) socioeconomic factors also play into things. So as with most issues, "it depends."

Truth spoken here. I'd venture that it is almost always much more costly to own than rent. Sure, you can often have a mortgage payment a bit less than what you can rent a decent place for, but that's where the savings end.
First time buyers often do not consider things like taxes, insurance, upkeep, major item (roof, furnance, etc.) replacement, upkeep tools and equipment needed, cost of furnishings, etc.

If you have the ability and resources to do your own upkeep and maintenance on a home vs hiring things out, it can make owning much more palatable.

[LivingAlmostLarge]

When I hear this argument, that buying a house is like paying yourself rent, I always argue the opposite -- a mortgage is like paying the bank rent. The money spent on interest & fees are lost to you, just like rent on an apartment is. On top of the interest payments, annual mx/repairs/insurance/taxes add to your equivalent "rent" payment, paid to the county, contractors, the insurance company, etc. -- this money is again lost to you, and would mostly not be your responsibility as a renter (at least, not directly).

I'm not discounting the value of forced wealth accumulation through building home equity over time .... But in the romance of being a homeowner, people often forget that there's alot of costs that goes along with homeownership. I'm many cases, renting truly is cheaper (net of all those factors) ... Though other (less-quantifiable) socioeconomic factors also play into things. So as with most issues, "it depends."

Yes and No. Where we've lived our interest on our homes has always been less than renting. Current interest on my house is $1300 a month. Property taxes about $1300/month. That is $2600 a month. That rents me a 2 bd apartment, not a 3 bedroom house, which across the street rents for around $4500. But i like where i live. When we moved in the rent in 2017 same house across the street was $3600, so it hasn't gone up a ton in 6 years. But it still was more expensive than buying our place.

When we moved in we were renting in a substantially cheaper area for $2400 so yes we were "paying" more, and then when we moved in our principal paydown was that principal savings. But our interest and property taxes was close to or a little less than renting. Yes I have to pay for maintenance, but our home value in 6 years doubled. My neighbors sold for just about 2x what I bought for last month cash multiple bids. I don't count it but I could the excess home equity.

The home equity where we live funds many people's retirements.