House Mortgage -- Countdown

[LivingAlmostLarge]

Agree that credit card & other debt definitely should take priority over mortgage early payoff .... but I just wanted to note that potential conversion to a rental doesn't really change the equation in my mind. Speaking from experience, a paid-off rental is WAY better than a mortgaged rental, because vacancy for a few weeks or even months is far less of a concern. "But the tax write-off of the mortgage interest!" ... uh huh .... You want to pay $900/mo in interest in order to get a $200/mo tax write-off? No thanks.

There are arguments to be made for leveraging yourself to the gills to increase cashflow & ROI (spending $300k on 1 paid-off rental vs. $300k down spread across 5 mortgaged rentals worth $300k apeice), but that really only applies when you're buying new property(-ies) vs. converting your current home, and that strategy also carries significantly higher risks.

Actually you are paying 25% taxes on your rental income but with a mortgage you are deferring the taxes on the rental income so it does make a huge difference when you are renting a property versus living in it. And to me a property should be assessed as a rental versus primary independently not as a "oh I don't live here let me rent it out."

Something I tell people why are you renting out a million dollar property or even $750k? Do you really want to damage it?

[james.hendrickson]

Officially paid off our mortgage. Sent payoff in last Wednesday and I believe it went through yesterday as my online banking account doesn’t show the loan account anymore. I believe a payoff letter is coming in the mail today. Took us 6 years 10 months and 22 days to pay it off.

Can't believe I missed this - great work Skives!

[james.hendrickson]

Guys - piping up with an update here. I made another payment on my mortgage yesterday, bringing the total down to $287,050.21.

[LivingAlmostLarge]

Just a funny thought that I paid $21,796 in principal this year but only $15,682 in interest on our mortgage. Unfortunately our rate is on an arm so i have to watch as the rates start playing out. I have until August 2028 so 3.5 more years. But at the rate we are paying it down. i probably need to watch the 15 year because I think we could swing it if rates drop to below 4%.

[Jluke]

Jan 2021: 174,999
Jan 2022: 167,999

Jan 2023: 160,499
Jan 2024: 152,999

Jan 2025: 144,999

can you tell I know how to manipulate an amortization schedule

[MonkeyMama]

Jan 2025: 144,999

can you tell I know how to manipulate an amortization schedule

Dec 2024: $79,999

I am the same way. It seems most favor round numbers. I am always, "screw that". I want to celebrate being down to the next tens of thousands of dollars. Made it to the 70s! You are the only other 999 weirdo I have come across.

[mumof2]

Jan 2025: 144,999

can you tell I know how to manipulate an amortization schedule

wow looking at those numbers I pay over $32,000 a year just in rent...looks like you on average pay around $10,000 a year...am I right??

[Jluke]

wow looking at those numbers I pay over $32,000 a year just in rent...looks like you on average pay around $10,000 a year...am I right??

Yearly mortgage is $12000 (1k/ month)
yearly school/property taxes and insurance is probably another $13,000

not too far off from your number, if that helps.

[mumof2]

Yearly mortgage is $12000 (1k/ month)
yearly school/property taxes and insurance is probably another $13,000

not too far off from your number, if that helps.

we don't pay school/property takes we do pay insurances for everything on top of that..it's just insane the rent we have to pay

[LivingAlmostLarge]

wow looking at those numbers I pay over $32,000 a year just in rent...looks like you on average pay around $10,000 a year...am I right??

But what are you renting? Is it a house? I paid that much in rent in 2015.

[mumof2]

But what are you renting? Is it a house? I paid that much in rent in 2015.

yes it is...but its not worth the money we pay

[LivingAlmostLarge]

yes it is...but its not worth the money we pay

One could argue the house we rented in 2015 was not worth $2500/month to rent. 3 bedroom/2.5 bath 1700 sq ft home 18 miles outside the city. One transit and took 1+ hours into the city. Worth it? I don't know. But it was the first place we ever had that had a garage - 2 car garage. I was 35 years old with 2 kids and we finally had a single family home. So i would argue that DH and I climbed the property ladder one rung at a time. My house in hawaii only had a car port and DH's house in canada had a detached garage. So we'd NEVER had a house with attached garage. I mean we took a huge step upwards in what we had grown up with and what we had our children in. My mom has watched us go up in economic level and always says she can't believe what we have. My MIL this weekend actually said the same thing. She said what our house was worth is insane.

The same house now is $4000 to rent 10 years later. I looked at that neighborhood. So maybe it wasn't worth it then, it's probably not worth it now. But obviously someone thinks so. We did and now someone else does.

Personally if i were renting again? I'd probably think it a good deal since further in is even more expensive like I said our neighborhood is looking more l like $6k/month and it's really not an upgrade in house but an upgrade in location.

[mumof2]

where we live we dont really have that many apartments and most go to single people or students...most rent out single houses here...it is what is available...we would love to buy but again saving $70,000- $100,000 for a deposit in incredibly hard when you are paying high rent...when you have a daughter that has been chronically ill since aged 14, a hubby that has multiple health issues and my chronic illness it is hard to save so much and the prices keep rising, we owned a house years ago but had to sell due to illness and all that was going on...but we will get there eventually the house we buy will be our forever house so we want it to be what we all want and need

[LivingAlmostLarge]

where we live we dont really have that many apartments and most go to single people or students...most rent out single houses here...it is what is available...we would love to buy but again saving $70,000- $100,000 for a deposit in incredibly hard when you are paying high rent...when you have a daughter that has been chronically ill since aged 14, a hubby that has multiple health issues and my chronic illness it is hard to save so much and the prices keep rising, we owned a house years ago but had to sell due to illness and all that was going on...but we will get there eventually the house we buy will be our forever house so we want it to be what we all want and need

But see that's the issue that I'm pointing out. That people need to make more sacrifices to get there. Where you live is only houses. Where you live has no apartments. But what about elsewhere? What are thinking outside the box for either earning more income or lowering your monthly nut? Do you think it was comfortable living in a 1 bd? Or a condo with 2 kids? I know people who live in 2 bd condo with 2 kids permanently because they like the location. They never lived in a house both in the US and abroad.

I'm just suggesting that people do things to get make their future possible. Buy a bigger home and rent out rooms. Move into a house and rent out a couple of the rooms instead of the whole house. I had a friend whose family lived with 3 other families in a 4 bd house so a family of four lived in 1 room (to live in palo alto). Another friend lived in a 3 bd house in California with 14 other family members. She shared a room with 3 other cousins/siblings. I've known people who rent rooms in homes. I don't think it's easy to save a down payment while renting, I find it next to impossible personally.

But then maybe the answer is getting a second job or looking at moving further out. Smaller home. I know lots of people who commute 1+ hours because of it. Something we didn't find pleasant. But the reality is that we chose a smaller house for a shorter commute. Gave up a garage before for a better commute. I don't think anyone can have it all. You just have to chose the least pleasant option and that option might be renting.

[mumof2]

True...we can't really cut back on anything in our budget right now...we have animals so couldnt live in condo/unit and my illness extra noise from people or change in temperature, to many lights etc set my body into melt down...we have looked at all options...moving further away is not an option also wouldn't save us money, it would cost more in gas and rent isn't any cheaper...believe me we have looked at the options...renting is fine for now...and I believe if we are meant to buy a home again it will happen