Doesn't Anyone Here Want to Be Debt Free???

[myself]

That begs the question: why is home ownership so important?
Shelter is one of the primary driving forces of any living being.

Personally I don't really care to own one. Miss payments and you lose your entire home, including equity. Repairs, insurance, taxes, HOA fees, PMI, etc., add up to a very high cost of ownership.
You don't always loose equity as long as you weren't over-leveraged in a house to start with.

I disagree with anybody who thinks that investing in a first home as a mortgage is a good idea. Now if you owned multiple income-producing rental properties or investment properties then that's a different story.
Who's to say that you can't use the investment properties to help pay some or all of your primary residence mortgage for you?

But there's gotta be better way to invest your money than to pay off your first mortgage.


If I had to own a home, I would do exactly what LivingAlmostAtLarge does. Heck, I would mortgage 110% of the home's value if I could.


The rate of return on a first home is nowhere near what the market can offer. If you paid the minimum on a 30-year mortgage and invest the rest in your retirement, when you retire you are probably guaranteed enough money to pay off the house plus more money for retirement.
Likewise, if you ensure that your mortgage is paid in full when you want to retire, you're living expenses are much more reasonable.

My responses in red, and I know that you know the answers that I wrote. I just figured I'd answer the questions.

[Hot dog]

Fin none of what you said sounds anything like the people on this forum so I dont know where you have been reading anyway it has sparked some good conversation but seemed like you were trying to spark something else

[mariogreymist]

That is excellent! There is nothiong better than owing No One.

I beg to differ - not being a self-righteous jerk is considerably better.

[Bookie]

I beg to differ - not being a self-righteous jerk is considerably better.

Snort!

[mariogreymist]

I'll be here all week. Tip your waitress.

[anonymous_saver]

I am currently debt free.

The only debt I have ever had was a $7,400 graduate school loan which I paid off with one check (believe me my hands were shaking as I put it in the mail box).

I also have a credit card that I use just to get more credit. I pay it off instantly online after I use the card.

Therefore, I have never paid a cent in interest in my life. I am 25 years old.

The only interest I ever plan on paying is for a mortgage when I get one.

[tabbycat31]

Why thank you. Another good book is "Maxed Out"..and the DVD of the same name, or anything by Dave Ramsey.
In my line of work I see nothing but tearful debtors who have ruined their lives chasing "credit card perks" and said, "Oh I THOUGHT I could pay it off every month, but such and such happened". it is sad the amount of people who think credit cards or any debt is a necessity.
American Theocracy is an excellent read, by the way.

I'm on board about 75% with Dave Ramsey. I hate debt. That said, I will not use a debit card, EVER. Last year, I had my debit card info stolen, someone charged a $3000 plasma TV somewhere in texas, and it wiped out my checking acct and $1000 EF. So I use a Discover card, and pay it off monthly. I get small cashback, but that's in addition to maintaining my sanity, and not having to fight the bank to get the charge and overdraft fees reversed.

I will pay cash for a $7 sock purchase though. Some things are harder to pay for in cash, such as gas (although it's been easier to pay cash since I've moved to NJ because of the full service law) because you have to guess how much you need, and prepay, and go inside to pay, whereas you pay at the pump with plastic.

[Broken Arrow]

That said, I will not use a debit card, EVER. Last year, I had my debit card info stolen, someone charged a $3000 plasma TV somewhere in texas, and it wiped out my checking acct and $1000 EF.

Wow, that's crazy! Did you get your money back? Did you have to jump through hoops or was the process fairly painless with your bank?

I've mentioned this elsewhere before, but I have a cousin who uses only his debit card. When he was hit by ID theft, he lost $4000 before he found out and stopped it. Apparently, most of the illicit purchases were shoes and purses, and even though I'm quite certain he's not a drag queen, he's still had to jump through hoops to prove that he wasn't the one who authorized the purchase.

[rooskers]

My only debt is my mortgage debt right now. However I do use my rewards credit card for virtually all my purchases. I get 5% cashback for all grocery and gas purchases and it adds up. My rewards is limited to 750$ a year and I have used this for a total of 6 years now. I have earned $4500 dollars total and have never paid a dime in interest since I pay it off each month (I think it is at 25% interest lol). If a person is responsible enough it is a great tool to save money unfortunetly most are not and should not attempt it.

[tabbycat31]

I had to go through hoops to get everything back. I also lost 1/2 day of work due to this debcale.

When they went to cancel the account, I told them to send me an ATM only car without a Visa logo on it.

The TV was bought at a local business in Houston. I've never been to Houston in my life. I feel kinda bad that they screwed a local business though. I'm a huge supporter of local businesses, and I would have rather seen them screw Best Buy or something like that if tehy were going to get a TV.

[Hot dog]

Rooskers which card gives you %5 back? I just got some info from my card that they were going to stop the 5% and go to 2%. I was getting back $30 a month and they just stopped it I would love to find another.

[Ingtar17]

It is a nice thought to pay off your mortgage, but in reality this is very cheap money to borrow. Say your mortgage is 6% annual. The stock market on average goes up more than this, so you should be able to (on average) invest this money and end up with more than you would by agressively paying off your mortgage. I've heard that people like Bill Gates don't fully pay off thier home becuase this some of the cheapest money you can borrow to invest for more.

Of course, Credit Card debt is not a good debt and should be paid off as soon as possible.

[anonymous_saver]

It is a nice thought to pay off your mortgage, but in reality this is very cheap money to borrow. Say your mortgage is 6% annual. The stock market on average goes up more than this, so you should be able to (on average) invest this money and end up with more than you would by agressively paying off your mortgage. I've heard that people like Bill Gates don't fully pay off thier home becuase this some of the cheapest money you can borrow to invest for more.

Of course, Credit Card debt is not a good debt and should be paid off as soon as possible.

You made a very good point. I have yet to buy a home (but am relatively close to doing so). Once I buy a home, I plan to prepay on my mortgage until I get 20% equity. Once I have 20% equity, I will redirect my "extra money" to go towards making my emergency fund exactly where I want it. After that, I have yet to determine what I will do (put more money towards retirement, prepay mortgage, or something else). I already put more than 25% of my income towards retirement, so I'm thinking of possibly prepaying the mortgage just so that I will not have a mortgage when I retire. I may change this into putting the full amount allowed into my 457 plan instead though. Hmmmm... now I'm analyzing this instead of working...

[LivingAlmostLarge]

Citibank simplicity CC gives 5% back. I love it. I think it's been discontinued.

[disneysteve]

Has anyone else noticed that OP FinWhiz hasn't been heard from for a couple of days?