Payoff the Mortgage or Invest?

[GeauxLSU]

Ok I'll substitute "have faith" for "trust". Do you have faith in the market and if not why? Have you gotten burned by the market and are you worse off today because you invested in the market at some point in the past?

Congrats on paying off the mortgage by the way.

That's still subjective. Of course I "got burned" by my definition in 2008 along with everyone else. But in the LONG run the market has obviously proven to be a good investment (assuming you don't invest like a complete idiot.). Cant' remember the shortest frame but I don't think there is a 10 year span in it's history where you wouldn't have been better off at the end. The risk is the next 2008 or heaven forbid 1929 comes along right at the time you need the money. The other risk is that congress decides stock investments are for the 'wealthy' and decide to further penalize you for being too rich.
I don't plan on the market making me 'rich'. I just don't want to have to be a Wal-Mart greeter to pay my light bill.

 

[roundhouse]

Look at the charts
There are several spans of 25-30 years where the market had no gain at all

 

[roundhouse]

Ok folks give me an honest answer. For those of you that feel strongly about paying off the mortgage is it because you don't trust the stock market?

Mostly for Peace of mind

I got burned in real estate too
Got a rental house in Hiawassee that eats my lunch every month

And when I finally sell it I might get what I paid for it
Sure ain’t gonna get any of the interest and renovations

But it’s paid for , so if my financial world collapses I can move the renters out and live in it
Taxes , water and electric combined are less than $100 a month

But I don’t trust any of the scoundrels that run the stock market either

Who got paid when GM went bankrupt ?
The politicians and the unions

Who got screwed out of every dime ?
The stockholders

Right now I think one of the best investments is select classic vehicles

Early Broncos are going thru the roof

K-5 blazers are right behind

And it’s not a electronic receipt that maybe one day you’ll get part of your money back if we don’t cook the books or file BK

Classic cars are real tangible items that you can see , touch and drive while they increase in value as reliable as the stock market

 

[roundhouse]

Ok so I've got to ask...you still have a mortgage but yet if you made the decision to accelerate your mortgage payments 15 or 20 years ago you may not have a mortgage today. Are you saying you would have done things differently back then based on what you know now?

I'm at that midpoint where I have as many years until retirement as I have been working. I've been working about 20 years and have 15 to 20 more to go.

Oh yeah there’s a lot LOT of stuff I would do different

I’ve made several blunders over the years and you don’t realize it till years later

We bought our current house in 99 with a 30 yr mortgage , at 8% .
That was the going rate then

We refinanced a few years later , doing another 30 and pulled some cash out , to do a few renovations and finish our cabin in the mountains and never paid any extra against the principal

Fast forward to now :

If we had gotten a 15 yr mortgage when we first bought it , our house would have been paid for , (removes shoes to do the math ). Thee years ago

Instead , we got another eight or ten years left if we don’t pay any extra
And I’m not sure without digging up the amortization schedule , but I think we might still owe more than we originally paid for the house in 99


It’s embarrassing to divulge my financial mistakes but if it helps one of y’all avoid making the same mistake , that’s a good thing .

Get a 15 yr mortgage
And don’t refinance it , unless you can drop the interest rate by more than 1.5-2 percent

And if you do re fi to lower it , get a loan that’s the same length as what’s left on your original one
Don’t restart the clock all over again

 

[czub]

And don’t refinance it , unless you can drop the interest rate by more than 1.5-2 percent

And if you do re fi to lower it , get a loan that’s the same length as what’s left on your original one
Don’t restart the clock all over again

This is bad advice. If I could refi at .25% -.50% lower and no out of pocket cost, I would.
There's not much of a market for 17 or 26 year mortgages which means it will cost you more. What you want do is refinance at a lower rate with the term closest to the remaining term of your original loan but keep making payments that are at least the same as before.

 

[Vincent Vega]

Look at the charts
There are several spans of 25-30 years where the market had no gain at all

With all due respect I don't think that's true.

 

[roundhouse]

With all due respect I don't think that's true.

heres a chart that’s adjusted for inflation

It peaked at 5500 in 29
It didn’t go significantly above that and stay above that until 1995 ish

That’s 60 years of almost zero gains

 

[GeauxLSU]

heres a chart that’s adjusted for inflation

It peaked at 5500 in 29
It didn’t go significantly above that and stay above that until 1995 ish

That’s 60 years of almost zero gains

The problem with that is, nobody puts all their money in the market on one day and then just waits 30 years to see what happens. You invest over time and dollar cost averaging almost always wins.

 

[roundhouse]

This is bad advice. If I could refi at .25% -.50% lower and no out of pocket cost, I would.
There's not much of a market for 17 or 26 year mortgages which means it will cost you more. What you want do is refinance at a lower rate with the term closest to the remaining term of your original loan but keep making payments that are at least the same as before.

I’ve never been able to refi without closing costs ,
Which is also a scam
$6 grand to xerox some papers ???

 

[czub]

I’ve never been able to refi without closing costs ,
Which is also a scam
$6 grand to xerox some papers ???

Appraisal, title work, document and filing fees.
When I refinanced my 30-year loan, options were 3.00 with me paying the costs and 3.25 with the bank picking up the tab. I did the math and breakeven was beyond the expected life of the loan due to the likelihood of making prepayments, future refi or sale of the house so I went with the second option.