RE: Cudos to Apex Tool Group

[Leon]

Exactly, I still remember looking at my mother, dumbfounded. I showed the spreadsheet schedule to my father, he was an accountant, and explained how soon he could pay off his home and how much money he could save. My mother commented, why do you want to make payments bigger than necessary, you will always have house payments or rent. The notion of constantly being in debt is imprinted in way too many peoples brains.

I believe that most people that can't put any extra money in with their payments have bitten off more than they can chew to begin with. And I don't feel sorry for those people. I have been there.

The biggest advantage to paying your home off is greatly reducing the risk of loosing it. Yes you can make other investments but if you loose income and cant afford those investments you may only loose your investment. If you can't make house payments you loose your home and may not be able to afford rent either. Than where do you go?

[krw]

But you don't get the tax write-off. ;-)

We'll be in that position within a year.

[krw]

Perhaps they have bitten more off than they can chew but you have to start Thanksgiving dinner with the first bite. We were really far out on the ledge with our first house but interest rates were 14.5%, too (down from 18% when we were looking). There was no chance of paying a dime extra.

I don't feel sorry for the results of anyone's choices. They have the right to make choices and with that goes the chance to fail. It's a great trade-off, IMO.

Precisely the reason I don't invest the extra payments (though I understand it). At this point in my life, the security of the home is much better than a few extra bucks I could gamble in the market. Yeah, I lost big time over the last couple of years but there's that "choice" thing again.

[Ed Pawlowski]

I work with a woman that has never lived in a bought house. Her parents rented, when she was married they rented, she still rents, Upon retirement her plan is to go into senior housing. She seems to be content with it, but that is not what I aspired to.

Same here. Long time ago and did not like it.

My goal was to have the house paid for long before retirement. I'm now collecting social security (still working 80% too) Taxes, insurance, utilities are all iIneed to survive. I like the idea of knowing my ass will not be out on the street in my old age. Or having a nasty landlord.

[Leon]

What is a tax write off. LOL I recall I used to top out in SS deductions and now I don't qualify for tax write offs.

[Leon]

Understood, we once had 12% the rate was 13 and a couple years later it went up to 18. We were stuck in that routine until rates came down to 9 and then we started the process by refinancing to a 15 year loan. We did not lower our payments but a couple of dollars but we went from about $36 a month going towards principal instantly to $158 per month for a couple of years and then started adding $300 per month as we paid vehicles off.

I think most peoples problem is that they invest money in the market that they cannot afford to loose. I don't depend on my market investments at all, if I lost all of that money I would be highly upset with myself but it would not change the way I live.

[Leon]

She was never taught, in a way she could understand, to think differently. There is a shocking amount of people that think that way.

Exactly. Unfortunately down here we still have the threat of the government and taxes, even if our homes are paid off. But fortunately at 65 you still owe taxes but you can take an exemption and pay them with penalty when you sell, if you sell. ;~)

[Ed Pawlowski]

I relocated in 1981 and the rates were high. I was able to get a 15%. It came down to "how much a month can I afford" and bought a house priced accordingly. Great times if you had an old low interest mortgage or no mortgage and were buying CD's for 12% return.

A few years later I recall walking out of the bank after the first re-fi knowing I just saved $40,000+ Then did it again. And again.

[krw]

We still have the threat of the tax man but it's only 30%[*] of what it would have been had we not moved.

[*] On more than twice the house and 3x the lot size.

[Leon]

Well while those interest rates seemed good, they were only high to keep up with inflation. If you could get a CD with those rates you were basically insuring that your stash was not loosing spending power. The ideal time to have purchased a home was early to mid 70's. In Houston

10 years later the homes almost tripled in value. I find that CD's are a safe and good investment if you are drawing a LOT of money and not spending it all. As I have once heard, CD's are a safe way to watch your money loose value.