<p>We sold our old house and bought the new one for all cash. I love not having a mortgage. It means I don’t need such a high-pressure (and high paying) job as I needed before. Much more flexibility.</p>
<p>ETA: It’s not only a financial decision but also an emotional one. Not having a mortgage is, to me, liberating.</p>
<p>I have a very low rate mortgage and plan to let it run its full 30 years.</p>
<p>VeryHappy - would it have been better if you were to keep the money as liquid asset and invested it in something which would give you a better return than 5% over 5-10 years. If you were to lose your job then you could easily draw on the liquid asset to pay for your mortgage, or even paying it off.</p>
<p>I must agree with Oldfort that there is money to be made in the present climate. </p>
<p>BC is correct though - you must have the time and inclination to make the money work. You cannot just throw dollars into a fund or a few stocks, let it sit and then expect to make huge gains. You have to work it these days.</p>
<p>If you have the time to really watch your investments, then it makes sense to take out the mortgage. You’ll profit in the long run.</p>
<p>If you are the type that does not enjoy investing, or does not have the time it takes to follow your investments carefully, then pay off the mortgage.</p>
<p>My dream is to have enough money to do both! :)</p>
<p>The liquid asset can drop in price right when you need the money.</p>
<p>You are borrowing at a fixed cost, albeit low, and your return is variable and maybe volatile. </p>
<p>I agree with those that say paying off a mortgage is a financial and psychogical decision. Usually a 5 percent return in the markets are a no brainer, but we all know 5 percent is not a sure thing.</p>
<p>I don’t think it would be that hard to put it in mutual fund(s).</p>
<p>Mutual funds are not sure things.</p>
<p>I think you can see how YOU have done with your investments over the past years, compared to the market. If you do well, more upside to investing instead of a mortgage. If not well, you may just prefer to pay it off. We love having it paid off–it have us a hugeonthlu increase in disposable income!</p>
<p>I think the bottom line is to avoid perfect-world thinking. </p>
<p>The current climate gave us more than 10% last year, better in 1Q13- and 1.5% in 2Q. Hindsight is 20-20. No one can predict. Didn’t 2008 teach that? 25% losses on investment value and homes that couldn’t sell to cover the mortgage.</p>
<p>In our case, after the mortgage is paid off, will still have high property taxes plus insurance. Still that over our head, each month.</p>
<p>Yes, and for folks living in condos or secure communities often PAH high association dues as well–monthly. An glad our owner occupant property taxes are modest–less than one Monty’s mortgage payment. The insurances add another few mortgage payment equivalents. Owning and maintaining a home is expensive but we’ve tried apartment living for many years and aren’t fans.</p>
<p>I think some depends on your future plans. We paid off the mortgage. Sometime in the near future, we will likely purchase a second home. We will use the equity in our current home to fund that purchase. In the meantime, we will use the old mortgage money to do things like get our driveway replaced, and our word floors refinished.</p>
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<p>You could also lose part of that 80K.</p>
<p>These discussions usually come out when the market is doing well. Discussions about investing social security funds in the stock market often come out too. During a stock market crash? Not so much. The time for these kinds of discussions is when you see a crash where you can stalk the bottom of the crash and then scale in. But of course our emotions tell us to do the exact opposite.</p>
<p>Paying off your mortgage early usually means that you can put what would have been mortgage payments, into savings and investments.</p>
<p>The stock markets are a sea of sharks. Everyone wants to eat your lunch. From CEOs that want you to fund their stock options, salary, bonus, retirement and lavish offices to hedge funds to investment bankers to brokerages to mutual fund manager fees. A lot of people are put off by stocks. I think that it’s a wonderful pond to play in if it works for you.</p>
<p>I agree BC. If my situation was different or my mortgage rate higher I would pay off my mortgage ASAP but I plan to just use a dedicated fund to pay it when I retire.</p>
<p>I am in the pay off camp. I hope to finish paying off our mortgage in two years, then will get myself educated about what to do with that “extra” money. We are extremely lucky to have civil service jobs and pensions: hoping that the city stays solvent for the next 40 years… i am a fan of having few monthly expenses: it is so liberating!!!</p>
<p>I never took my money out when there was a crash, now years later I am still happy with my returns. That’s is another thing to consider, if you have most of your money in your house and if you should ever need a large amount of money then you may need to sell your house in the down market.</p>
<p>I am in the “pay it off” camp. We own our house free & clear, and it is a very good feeling.</p>
<p>In our state, most folks can get home equity line of credit (HELOC) of $250K without any fees or closing costs. If more is desired, you can go through a more time-consuming process that includes an appraisal and may cost the applicant some. </p>
<p>For us, our stockbroker advised us to get a no cost, no fee HELOC, just in case we ever wanted to draw from it. There have never been ANY costs or fees to us for opening or maintaining this HELOC, and it feels good to know we have it, “just in case.” We are happily celebrating one year of having fully paid our mortgage. </p>
<p>We have never drawn on the HELOC, and the bank sends us various offers on interest rates if we ever do decide to draw any amount on the HELOC from 0.99%.</p>
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<p>I like to take my money out before the crash and get back in after the crash. I am very happy with my returns too but I’m a trader with a little training in accounting and finance and more than a little training in technical analysis.</p>
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<p>That’s something that can be planned for ahead of time - when you buy a house, make sure that you have a good financial cushion so that you’re not house rich and cash poor.</p>
<p>EPTR, what is the interest rate on the loan? Would think would be more than what the bank gives her, so pay it off.</p>