We are 52, have only had one mortgage and hope to pay it off this year thanks to a small inheritance. Refinanced once.
Most everyone I know in their 50’s-70’s, ( that I know well enough to know something of their financial affairs), does still have at least one mortgage.
Remodeling, college expenses for children and for themselves when a mid life career change was forced upon them, and health expenses of parents are often the reasons.
We paid over and above our mortgage payments from the very beginning so more went to principal vs interest. We bought our home right when our kids were born and paid it off fully about 10 years ago. We are very debt-averse and live below our means. I think the difference between us and our parents’ generation is that both our parents upgraded to “the big luxury house” in their 40’s, and we stayed put. Our house is nice but it’s not luxurious, but that’s less important to H and me than having the money to do other things.
Looking back, we’ve done something very unconventional and very risky when we were young. We waited until we had two stable incomes and bought the best house we could afford with a 20% downpayment, which at the time was all of our savings, not even an emergency fund left, and we already had two little kids. But in the long term and with some luck this strategy paid off. We never needed to upgrade or move into a larger house, paid the mortgage in just 15 years, and were mortgage-free during most years when we paid college tuitions. The house also appreciated a lot during all these years, and it’s still not too big for two empty nesters (though downsizing is certainly a possibility). Plus, it was much easier to make financial sacrifices towards the mortgage when we were younger 
We are in our early and mid fifties, and owe about ten more years on our mortgage. We plan to pay it off before we retire, sometime between about 6 and 10 years from now. Unfortunately, our house is worth significantly less than when we bought it, but we still have the equity we came in with, which was substantial (to us). I doubt we will have another mortgage, unless we decide to buy another home before selling the one we are in.
I’m 59 and my husband is 62, and we still have a mortgage payment. We could pay off the mortgage in full if we wanted to, but there doesn’t seem to be a good financial reason to do so.
I don’t know why people think it is such a great idea not to have a mortgage. The rate is around 4.5 right now and it is tax deductible. I am getting a higher return on the stock market and when I retire I will still have taxable income, so why wouldn’t I want to have some deductions?
Thanks for the inputs.
It appears CC parents likely do slightly better than the average parents do, if the statistics in the following is correct (which I have no way to verify): To clarify, the debt here mostly refers to the debt due to housing.
“The percentage of households headed by someone 75 or older that carried debt was 41.3%, compared with 78.5% of families headed by someone in the 55-64-year-old age range.”
Because of cash flow. For me and DH, it was a matter of wanting to give up the big fat corporate job that paid well into the six figures, and just do something much more low-key. Something had to go, and for us the obvious choice was the mortgage. Since we’ve moved, most of the other expenses (except dinner out – we never go out anymore – and commutation) have remained about the same. (And Oh yeah, I no longer have to rent a room two hours from my house to live in during the week so I can work at that job.)
I can’t remember where you got your statistics from, but I do believe the folks in CC tend to be in a better financial position than “average” Americans.
There are a significant number of us paying a good portion of our kids’ college tuition and expenses, and most of us and our kids attended college. Most of those who post on CC seem to have decent-oaying jobs as well.
My father passed away the year he paid off their mortgage. My mother asked me why she was paying so much in taxes that year compared to previous year (meaning the accountant I introduced her to probably did it incorrectly). She had a lot of dividend income and capital gains, but with no mortgage interest to offset it. Duh. I told her that she would have been better off if they took the money and reinvested it.
Our house is our biggest asset, and will be paid off soon. I plan to depelete our savings and pay it off in about 3 months when I turn 55 and DH turns 54 because I HATE the mortgage servicer we were sold to. GREEN TREE is just awful, and when Bank of America first transferred the servicing, we got daily harrassing and rude, upsetting, insistent calls from the Greentree “customer service representative”, who claimed we hadn’t made payments that greentree had managed to lose, even though Bank of America provided them with the transfer date and number as proof that we had made those payments. The worst was that there were NO SUPERVISORS to be transferred to, and no research staff to check the claims. I have never missed a mortgage payment, and was harrased daily for close to a month until they finally found the payments. They never said sorry, never called again… I am hoping they don’t screw up the payoff, and that they file the paperwork correctly with our county, but I will be SO HAPPY to be mortgage-free!!! Our taxes are now huge, since Texas relies on property taxes to fund just about everything, but we will be working here for another 7 years at least and we love our house. Who knows? Maybe we will just stay here…
Lots of “we’s” here. Couples. Different income stream than me, solo. Yes, I still have a mortgage, and wish I didn’t. However, I refinanced a few times, 8 year low interest loans, no points. I rolled my car purchase into that loan, paid off part of my kid’s college loans, took care of needed house repairs and upgrades and it is all tax deductible, rather than throwing money away on higher interest rates. I have plenty of equity and will have this place paid off by age 65 or so, in time for retirement. Hopefully I’ll downsize first. But home ownership and playing with these lovely low interest rates has given me a great deal of flexibility that I’d not have had with strictly focusing on paying off a mortgage.
I could not remember exactly where I bumped to this statistics. But this article seems to refer to the same statistics:
http://www.plansponsor.com/Debt_Becoming_a_Persistent_Problem_for_Older_Americans.aspx
If it is indeed from the same sources, it is Employee Benefit Research Institute (EBRI) which researched and published this statistics.
My parents had their house built when my dad was 34 & my mom was 27. It wasn’t fancy, just a regular suburban two story house with a carport. We bought our house when I was 25 & H was 28. It was supposed to be our " starter" house with only two bedrooms & a bath, but * life happens*.
Omg, I just looked on Zillow at my parents house, it’s been remodeled so many times I can’t even recognize it, plus the furniture & fixtures are ugly.
My DH doesn’t really do the stock market much, but other than that, you two agree completely.
One of us is retired and we still have a home equity loan. Our monthly payment is not that much, and our property and school taxes are only $2,300 annually. I thought we would have paid off the home equity loan years ago, but things never clicked.
That makes no sense. Sure she was paying more tax but she was paying way less interest. So if she’s in a 28% tax bracket, it cost her $2,800 for every $10,000 in interest she is no longer paying. She is AHEAD $7,200. Someone who itemizes just over the standard deduction rate is even further ahead. If my itemized deductions are $15,000 but $10,000 of that is interest, my standard deduction is still $12,000 (approx for a MFJ return). So I’ve only lost a deduction of $3,000 which costs me $840 in tax but saved me $10,000 in interest.
Makes NO sense to want to pay interest in order to save on your taxes.
I don’t play the market much either, other than mutual funds and index, but the return is better than 4.5%.
All paid off. Age 61(now), H 62. I’m retired, he’s’ contemplating.