How would having no mortgage affect you?

[Goldy1]

I will be looking to pay off the home mortgage in a few years here thanks to 1)being frugal(not cheap, I have done many home improvements with CASH) 2)paying down extra principal.3) not using my home equity line of credit 4) not upgrading to a bigger home just b/c I could afford to (keeping goal to get it paid off, not keep upsizing and keeping a note as so many do(no offense to those who do, it can be a good investment choice)

The funny thing is depsite at this time being w/o credit card debt our job situations kind of suck now, and a kid is on the way.

I look at all the bills and they are not too bad but my point is just b/c your mortgage is paid off, you still need a ton of money to live.

[maat55]

I said the same thing about being debtfree other than the mortgage. I know that I would notice a difference if I no longer had to pay that 900 per month, but it would not be the windfall you would think.

My plan is to invest it all anyway. If your insurance and taxes are in your note, you might feel like you are still making a small payment.

[Goldy1]

yea, taxes are paid separate but it is always a big bill twice a year taking out a chunk. "YOur biggest asset is your future earning power." lol My utilities are high too.

[Snave]

This just gets into the whole "put everything towards the house except for your 15% retirement arguement" (aka Dave Ramsey theory). While I wouldn't complain if someone wanted to pay off my mortgage for me, I think investing the additional money I have each month in the market as oppossed to sending to my mortgage offers me more advantages. I still say this having lost tons of money the last few months. I still think it is better for me in the end.

[Ima saver]

I paid off my house when I was 32. I have never regretted it. Of course, I NRVER had a big house payment. I have built two new houses since then and enjoy never having a payment. But you are right, it still costs a ton of money to live even without a house payment. It has saved me a lot of interest.

[Goldy1]

I never went thru the RAmsey program but I have listened to his show. I rather like it and when people making 200 K call in and are clueless and buried it can have entertainment value when he scolds them and stuff I like his advice.

I can say for years we put down 300 extra a month and occasionally a few K down to knaw at the chunk but know we have a lay off over here and when faced with that, more money in the bank trumps more equity (even tho we did have our emergany fund loaded) We stopped extra principal payments when fear of a lay off came and it did transpire. lol WE have not been able to itemize on our taxes for 2 years either.

investing the cash or putitng it on equity;it's all good.

[Snave]

investing the cash or putitng it on equity;it's all good.

I think you do what you feel comfortable with when it comes to this. You are right though, either is good - as long as you are doing something productive with your money to help you build your financial security.

[TBH]

I've had this realization too. Our mortgage payment is only about 15% of our gross income. We'd still have to pay taxes and insurance, so principal and interest is more like 10% of our gross. Not having that payment any more would be like a 10% raise. Sure, a 10% raise would be nice, but life wouldn't really change that much.

I'm prepaying a little, $45 per month right now, but no more. I do want to move up at some point, so I'd rather have a down payment saved separate from the equity in this house, rather than having this house paid off.

[disneysteve]

We aren't close to repaying the mortgage, though I do expect to pay off the home equity loan by the end of the month. I want to get it off the books and not carry it into another tax year.

Anyway, our P&I is $697. I imagine that once we are free of that, most of the money will go toward savings. Typically, when we pay off a debt, we use some of that money to treat ourselves to something and the rest goes to savings. When I paid off one loan, I hired someone to mow the lawn. When I paid off my last student loan, we got limited basic cable TV. When we pay off the home equity loan, we will upgrade our cell phone plan to unlimited texting. The splurge is always just a small portion of the money that was going to the loan payment. For example, the HEL payment is $218. Adding texting will cost $25. The rest will go to savings. Actually, it will probably go to extra principal payments on the mortgage.

[snafu]

When I ran the numbers I realized that amortization tables required we pay triple the cost of the house! At first we were only able to make extra payments sporatically but when we saw we could cut a 25 yr mortgage to 13 yrs., we got serious about making an annual balloon payment. We earned the money by working one extra day each month. Any gift money, bonus, cost avoidance went to the mortgage fund so it didn't impact on day-to-day living. When we made mortgage payments bi weekly it cut another 5 yrs off amortization.

It's made a huge difference in subsequent decisions. Being mortgage free allows us to decline contracts, upgrade our education, change jobs twice, and make serious financial investments [eventhough the current mkt makes me wince]. I bought our condo for a great price because it wasn't based on obtaining financing.

[Goldy1]

Yes our house is about 2000 sq feet and in a good neighborhood. For me having a modest size home is great b/c it saves me on cleaning and utility prices like heat. It's not perfect ie. no attatched bathroom to my bedroom but it is more than I need.

Yes my hubbie used to pay to have the grass cut b/c what the guy charged was about what he was makign an hour so he rationalized he could stay at work an hour longer. Then he married me, and now I cut it myself and he wacks. IT is a big yard too. I dont' mind so much.

Not having a mortgage will mean no fear of foreclosure. Also it means if we need to take lower paying jobs, we can still make it. I am very excited about it. lol