Grannyrod

Yeah, but after the initial nightmare is over, you'll be glad you did, especially at tax time. Ownership is better than loanership any day. The earlier the better.

Dana R

I'm 46, and my wife and I moved to our current house 14 years ago. We took out a 15 year loan and paid it off aggressively. Even though we refinanced a few times, we still paid it off at the "aggressive" earlier figure, and dumped money into the principal whenever we could. We've been mortgage-free for the past year, and I like the feeling of being debt-free. In 4 years, it's likely we'll have to tap some of the house to pay for our first-born's college fees, but as of now any extra money is going into investments, and hopefully they'll take care of education.

Though I'm a musician now, I was an economics major in college, and I can clearly see why many would rather take out a mortgage at a cheap cost and invest that money in the market. I tend to be risk averse, and would rather view my house as a necessity instead of an asset. My hat's off to those who take the risk of morgaging their home to invest and do really well in the market. I just don't have the balls to do it. The housing market in Boston is so whacked, that I fear a big correction that could turn this area upside down.

Legal Bill

Some of the posts raise some interesting issues that could be discussed further. I always get a no points, no closing cost re-fi. The only thing I have to come up with is the escrow for taxes (which I get back when they close the escrow tax account on my old loan) and the number of days of interest i have to pay until the next cycle, but I would have paid that interest anyway. I think you have to have a mortgge of a certain size to get the no points no closing costs.

G-Rod, 6K is outrageous to close a re-fi. What's up with that?

If our interest rate is in the 5s now, and the market is expected to grow at 6% per year, and we get between 20 and 30% of our interest paid by the government in the form of reduced taxes, then it seems there is still a 2% + differential that argues in favor of not paying down the mortgage and investing the money instead. Is my math and my assumption right? If so, why have the advisers changed the approach? Is it that 2% is too small a differential to keep following the traditional formula?

Dave, sounds like you are literally playing the market with your mortgage. If I read you right, your available investments could be used to pay the mortgage off right now. How is that working for you in this economy? While my investments exceed the mortgage, most of them are tied up in the 401k and IRA and I can't get at them.

Triple-H

Well as a Vintager I'm way behind the eight ball. I just bought my first house last July. My life has had issues and there was no home buying in the cards till just recently.

I'm happy to say I locked in a 30 year at a fixed rate of 4.75%. Based upon that rate and the fact that every penny I have right now is going into home improvements, I must admit I have not made extra principle payments. And although I would like to, my focus for now still seems to be on improvements.

I bought a 500 sq. ft. two car garage with a small 1,500 sq. ft. Cape Cod attached. And I was able to make the purchase because the house needs some work, but most of the work I can do myself. I'm not married and have no kids and this is just what I was looking for, in fact I looked for three years before I bought. I just could not live without a big garage.

Legal Bill

[QUOTE]Originally posted by Triple-H
Well as a Vintager I'm way behind the eight ball. I just bought my first house last July. My life has had issues and there was no home buying in the cards till just recently.

I'm happy to say I locked in a 30 year at a fixed rate of 4.75%. Based upon that rate and the fact that every penny I have right now is going into home improvements, I must admit I have not made extra principle payments. And although I would like to, my focus for now still seems to be on improvements.

Triple-H

Very true. In random order here are the big things I see in the next 5 years.

Kitchen makeover- refrigerator moved and short wall added, cabinets added to revised wall, new counter tops on new and old cabinets, new flooring

Breezeway makeover- front and back walls removed and brought in to form small overhang in front and small porch in back, new doors and windows on both walls

Dining room conversion- remove closet from little 3rd bedroom next to kitchen and transform it into a dining room, remove small door that goes out onto sun porch and replace with sliding glass door

Deck- got to have a big one off the sun porch and it will wrap around to newly created back porch

Things I see in the next 10 years

Roof- replaced and 2 dormers added, one in front one in back

Masterbath- with the extra space from the dormer the upstairs powder room can have a shower stall added, all new fixtures, windows, flooring

Garage makeover- need space for another car, personal improvement you bet.

The house is in a great location and these improvements will bring it more in line with some of the nicer homes next to me. The former owners were elderly and the place was allowed to slip into a mild form of neglect, however the construction of the house is very solid with good craftsmanship and materials. The place was filthy when I bought it and I have made lots of improvements already along the lines of refinishing oak floors, new paint, appliances, small stuff like that. As someone who has almost always spent every free penny on my cars and the track, this change in lifestyle is something I'm really enjoying.

ralper

[QUOTE]Originally posted by Legal Bill

MsPerky

I've got a low mortgage with a low interest rate - refinanced twice in the past two years. I don't make any additional payments because my condo is my biggest interest deduction against some pretty steep taxes. And about to get worse with my change to single status.

Grannyrod

It's sad how the system taxes us single folk. As if we don't have it hard enough already.

mns2k

Its interesting to see all the comments on housing. I, for one, have never looked at my home as an investment. With the number of times that I have moved and given the vagaries of the real estate market I have made as much as I have lost. I feel that a house is a good tax write off and nothing more, from an investment perspective. I would define an investment as a good preferred stock, e.g., XL-B. Trades on the stock exchange (liquid), pay 7.625%, and at the end of 5 years you get your initial investment back.
Do you look at your home as an investment due to the length of time you have owned it and hopefully gradual appreciation in value?