? About paying off a house

[Shorty]

So you have no interest in saving $100k+ on a $200k mortgage? You are what is wrong with this country.

Unless of course you are super baller status and have lots of money invested making more than the interest. I know few people in this situation.

lol

[LANTIRN]

He would say 0/0/0 was the best score, and we all are getting ripped off for having used credit in any capacity.

He is OK with mortgages though. He does understand saving up and paying cash for a house would take most people a decade or longer. Since most houses go up in value, if only a bit, mortgages make some sense if they aren't huge compared to your income. No mortgage is best, but that is rarely doable. He recommends a 15 year fixed rate mortgage where the payment isn't more that 1/4 of your monthly take home pay. But he only recommends that if you have zero other debt, and he urges people to pay them off faster than 15 years.

[GhostTX]

He would say 0/0/0 was the best score, and we all are getting ripped off for having used credit in any capacity.

And for some reason, I seriously doubt Ramsey doesn't have a credit card. Or he never buys anything online nor any online subscriptions (Netflix, Primes, etc.).

There IS some credit you can do, so long as you pay it off every month, IMO.

[svauto-erotic855]

Fuck any stupid reason to keep a mortgage. Paying off the house would be fucking awesome. Fuck debt. No debt will lower your credit score to zero, but you don't need a credit score if you don't borrow money. I'd pay off my house today if I could. Fuck debt.

I see that we can agree on something.....

I'm at 3.65% on a 30 year fixed; I'm never prepaying that shit.

Good for you. There are lots of bankers who would otherwise have to get a real job if you stopped supporting them.

[03mustangdude]

And for some reason, I seriously doubt Ramsey doesn't have a credit card. Or he never buys anything online nor any online subscriptions (Netflix, Primes, etc.).

There IS some credit you can do, so long as you pay it off every month, IMO.

debit cards lets you do all those mentioned...

[GeorgeG.]

Word, doesn't really make financial sense. One of the biggest benefits of real estate is the ability to lever. I'm at 3.65% on a 30 year fixed; I'm never prepaying that shit.

I'm surprised this is the stance of some in here considering what your total out of pocket will be after paying on that note for 30 years. Why would you not want to pay that as quickly as possible and save the rest?

I'm in the "pay that shit off quick" camp. At that point, I'd say to hell with credit. You'll always have that equity if you decide to move and if you need a car, you should be able to pay cash with what you'd be saving by not paying a mortgage....what else is there.

<----not a financial expert though.

[GhostTX]

debit cards lets you do all those mentioned...

There's a duh.

I don't think about that because if you get ID theft on a debit card, it's money out of your account, rather than money out of the bank's account. And then you'd have to wait for the bank to credit it back to your account once they deem it a fraudulent purchase.

[DON SVO]

He is OK with mortgages though. He does understand saving up and paying cash for a house would take most people a decade or longer. Since most houses go up in value, if only a bit, mortgages make some sense if they aren't huge compared to your income. No mortgage is best, but that is rarely doable. He recommends a 15 year fixed rate mortgage where the payment isn't more that 1/4 of your monthly take home pay. But he only recommends that if you have zero other debt, and he urges people to pay them off faster than 15 years.

That's pretty much where the wife and I are at: we have a sub-3% fixed 15yr note, we're adding the equivalent of 2.5 extra principal payments every year and hoping to be out of the house by the time we turn 40.

[LANTIRN]

I see that we can agree on something.....



Good for you. There are lots of bankers who would otherwise have to get a real job if you stopped supporting them.

We have agreed on several things before. You are still a douche for wanting to nuke NYC, though.

[Big A]

I'm surprised this is the stance of some in here considering what your total out of pocket will be after paying on that note for 30 years. Why would you not want to pay that as quickly as possible and save the rest?

I'm in the "pay that shit off quick" camp. At that point, I'd say to hell with credit. You'll always have that equity if you decide to move and if you need a car, you should be able to pay cash with what you'd be saving by not paying a mortgage....what else is there.

<----not a financial expert though.

In the simplest sense, so long as he is able to make more than 3.65% on his investments, it's better to carry a mortgage, and use the cash to invest. Factor in that the mortgage interest is a write-off, he's actually got to make even less than the 3.65% to be in the black because of the lower tax bill.

[quikag]

Yep, my rate is 2.85% on a 7 year ARM. If it resets to a lot higher rate, I'll refi into a fixed rate mortgage or pay it off. I have enough other itemized deductions to not do the standard deduction ever, so I like the mortgage interest deduction.

On a somewhat related note, my brother is building an empire up in Tulsa. He's in his mid 30's, flies for Delta (reserves in F-16's in Air National Guard, lucky bastard), but he has a house flip and renting business on the side. He's up to 6-8 rent houses now. I can't keep up. He buys them on the sheriff auction steps. He has an awesome spreadsheet that he can download data from the Tulsa foreclosure website automatically and then he sorts it and looks for good opportunities. He then buys houses on the cheap. He and his wife fix them up and rent them or flip them for a 5 figure profit in a few months. They really know what they're doing.

Anyway, he has several mortgages at pretty low rates and he is using tenants to pay the mortgage and building equity at the same time. So, he has 5 figure equity in each of his homes already and has pretty decent positive cash flow each month.

So, he'd never be able to do that without access to cheap credit. He is levering the right way. He has a bachelor/masters in accounting and learned from some other guys in his squadron that were doing it and really knew what they were doing. One of the pilots has a property management company with several hundred properties under management. It's pretty crazy when some of these pilots are pulling more money with side businesses than with their pilot salary. Good for them.

[SS Junk]

Fuck debt. No debt will lower your credit score to zero, but you don't need a credit score if you don't borrow money. I'd pay off my house today if I could. Fuck debt.

Some of us aren't baller enough to carry cash for a vacation or road trip therefore we use a credit card, and hopefully one that does not require an annual fee or $300 credit limit because of a shitty credit score.

[David]

Yep, my rate is 2.85% on a 7 year ARM. If it resets to a lot higher rate, I'll refi into a fixed rate mortgage or pay it off. I have enough other itemized deductions to not do the standard deduction ever, so I like the mortgage interest deduction.

On a somewhat related note, my brother is building an empire up in Tulsa. He's in his mid 30's, flies for Delta (reserves in F-16's in Air National Guard, lucky bastard), but he has a house flip and renting business on the side. He's up to 6-8 rent houses now. I can't keep up. He buys them on the sheriff auction steps. He has an awesome spreadsheet that he can download data from the Tulsa foreclosure website automatically and then he sorts it and looks for good opportunities. He then buys houses on the cheap. He and his wife fix them up and rent them or flip them for a 5 figure profit in a few months. They really know what they're doing.

Anyway, he has several mortgages at pretty low rates and he is using tenants to pay the mortgage and building equity at the same time. So, he has 5 figure equity in each of his homes already and has pretty decent positive cash flow each month.

So, he'd never be able to do that without access to cheap credit. He is levering the right way. He has a bachelor/masters in accounting and learned from some other guys in his squadron that were doing it and really knew what they were doing. One of the pilots has a property management company with several hundred properties under management. It's pretty crazy when some of these pilots are pulling more money with side businesses than with their pilot salary. Good for them.

The old man makes more money from his rentals than he ever has being a lawyer. And every year when one mortgage is gone he adds another or two.

[Chopped54]

How it affects your credit shouldn't even be a primary or secondary consideration. Figuring currently historically low interest rates and the deductibility of mortgage interest, there aren't many good purely financial reasons for paying off a house. The main reason many do it is for the sole sake of not having any debt hanging over their head and the comfort factor of living in a completely paid off house.

This!
I always wondered why people who could easily afford to pay cash for their house would finance them.

[AnthonyS]

Fuck any stupid reason to keep a mortgage. Paying off the house would be fucking awesome. Fuck debt. No debt will lower your credit score to zero, but you don't need a credit score if you don't borrow money. I'd pay off my house today if I could. Fuck debt.

Best answer ever. Wife and I have our retirement plan pretty much set on this idea. Once our house is paid daughter is out of college and vacation house is paid, we are done with being employees to anyone. I may continue to consult on the side but it won't be as an employee anymore.