[CFrance]

Originally Posted by JoMar

Also depends on life expectancy, cash flow requirements, returns on investment. For instance, I took this mortgage for 30 years when I was 70....I doubt that I will live till 100 and if I do it is doubtful that I will be in this house. My wife is in the same position. The math worked in our favor to take the longest mortgage possible....both my accountant and investment guys were on that page too. Everyones personal financial positions should dictate the course.

Ja. Our financial advisor/broker was going to throttle us if we paid cash for our house. Much better return on investments than the interest rate on our mortgage.

[Wiotte]

I will get a cash out mortgage when I hit 95. World watch out !


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[manaboutown]

Outright or left out, that is the question.

[Wiotte]

Originally Posted by manaboutown

Outright or left out, that is the question.

Huh ? [emoji848]


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[Topspinmo]

Originally Posted by JoMar

Also depends on life expectancy, cash flow requirements, returns on investment. For instance, I took this mortgage for 30 years when I was 70....I doubt that I will live till 100 and if I do it is doubtful that I will be in this house. My wife is in the same position. The math worked in our favor to take the longest mortgage possible....both my accountant and investment guys were on that page too. Everyones personal financial positions should dictate the course.

Not really, you will be paying interest, taxes, and insurance for about 10 years and about 30 bucks month against the loan if your lucky? Your investment guy want his hands on your money, so he can invest it and milk the fees off it. Leaches everywhere including assisted living that's popping up like mushrooms around here.

[patfla06]

Originally Posted by rustyp

no bills - no payments - no in indebtedness = a very comfortable nightly sleep. Put your own value on that. Your finance guy won't.

Exactly how we feel!

[rustyp]

Well I slept on it and I can't believe it. I lived my life well within my means (one house, one wife) and saved 15%-20% of my income for 30 plus years for retirement. Now I discover the banks were giving out mortgages to people who worked at McDonald's and to seventy year olds on vacation homes no less without being backed by life insurance. Then the market crashes - I loose - my finance guy says don't pull out. Yes it did - it will come back. Took a while - quite a while. The aforementioned groups get financial assistance or better yet get to walk away from paying on their obligations. Boy was I a jackass. Shame on me.

[Bay Kid]

I do not believe in owing money. If I can't pay for it then I wait until I can. Just the way I was raised.

[CFrance]

Originally Posted by Bay Kid

I do not believe in owing money. If I can't pay for it then I wait until I can. Just the way I was raised.

Ours was a purely financial decision. We could pay it off tomorrow if we wanted. It has more to do with where to put our money where we feel we would get the best return. We don't feel that real estate is such a secure investment these days, especially in a location that keeps growing and growing. There will always be new housing that old housing has to compete with.

But I understand that some would feel more secure owning their home outright. Different strokes for different folks.

[tuccillo]

I generally believe in the same but real estate has traditionally been a bit different. The laws are stacked in favor of home ownership. For many young people, without a mortgage they would never be able to "get into the game" and would be left behind paying rent for the rest of their lives. While home ownership via a mortgage has been problematic at certain times, overall it has provided the financial leverage for many people to start accumulating wealth and increase their standard of living. As with any financial vehicle, the individual circumstances need to be considered.

Originally Posted by Bay Kid

I do not believe in owing money. If I can't pay for it then I wait until I can. Just the way I was raised.

[dewilson58]

Originally Posted by tuccillo

I generally believe in the same but real estate has traditionally been a bit different. The laws are stacked in favor of home ownership. For many young people, without a mortgage they would never be able to "get into the game" and would be left behind paying rent for the rest of their lives. While home ownership via a mortgage has been problematic at certain times, overall it has provided the financial leverage for many people to start accumulating wealth and increase their standard of living. As with any financial vehicle, the individual circumstances need to be considered.

Agree....................I hate debt. "In my young'r days", I did have mortgage and got into the game. Enjoyed paying that off. Never borrowed for an auto.........hated to see my children jump into car loans.

[tuccillo]

Yes, auto loans, IMHO, are only be used as a last resort. Borrowing money to buy a depreciating asset is something to be avoided if at all possible.

Originally Posted by dewilson58

Agree....................I hate debt. "In my young'r days", I did have mortgage and got into the game. Enjoyed paying that off. Never borrowed for an auto.........hated to see my children jump into car loans.

[valuemkt]

Tomcat, not sure what you were trying to get from your "simple" question regarding "To Mortgage or Not To Mortgage", but so far you've received (IMO) a somewhat representative sampling from Village people that come from all walks of life, experiences and economic backgrounds. Made me think of the Bell Curve, which I will use to provide my input / response. For those of you not familiar with the Bell Curve, see Bell Curve
for a pictorial view of what I'll be talking about.

I choose to break my answer into three segments of the curve, the left tail, the right tail, and the populous middle. In a perfect distribution of people, the left and right tails have an equal representation. I'm not here to argue that the Villages maybe represent a skewed to the right curve .. the answers are still the same.

The left tail regarding buying a home with or without a mortgage doesnt have a choice. Based on their economic situation, they have a mortgage out of necessity, for many reasons that are beyond this scope. Their answer to your question is very simple: we wouldn't be here if we didnt have a mortgage. The right tail is the direct opposite: they have now, or more likely have had for most of their lives, the means to buy whatever they want whenever they want and perhaps view a mortgage as something "lower class" people do because they can't pay cash like us. While most of this tail aren't quite as arrogant as that, and "hide their wealth", not all of them are. They also aren't qualified to answer your question without bias. By the way, the curve can be drawn with tails of 1, 2 or five per cent on each side, depending on how you;d like to classify the data.

So that leaves the middle centered around the mean, whatever that might mean in this discussion. Obviously, we don;t know what population your tax consultant considered, and whether this population reflected your economic situation. That's important for you. We also don't know if your tax consultant also has financial planning skills, as the two arent necessarily interchangeable.

So now we finally have the base to ask the question. I'm of a certain age, financially in the middle of the bell curve, and I have the means to pay cash for my house, but I'm not sure I want to do that vs take out a monthly mortgage at X% for 10, 15 or up to 30 years (even though my life expectancy is less than the length of my mortgage). (BTW, I am intentionally going to ignore any discussion of reverse mortgages).

So, Choice ONE - What are your thoughts on DEBT ? If you are of the school that both DEBT and DEVIL start with the same letter for a reason, your choice is simple - PAY CASH and be DEBT FREE. If you would like to feel good about that decision, become a disciple of Dave Ramsey and read or re read TOTAL MONEY MAKEOVER - Dave, also starting with a D has made a living helping people get out of debt .. and others never getting into it .. Regardless of the answer to the question above, that book is a good read - for you and your children.

If you are open to debt, then the choice becomes much more complex: Is this your last house ? Are you planning to leave a nest egg to your heirs or spend your last dollar coincident with your last breath ? What is your comfort level regarding CASH on hand vs debt ? After all, SWAN is very important to all of us .. and each of us have different comfort levels of CASH and DEBT to allow us to SLEEP WELL AT NIGHT.

Some folks in this middle of the bell curve are (or consider themselves to be) very skilled at applying financial concepts. Some rely on financial planners, others consider themselves bandits and do their own planning, or ask well intentioned but perhaps lesser skilled children, friends or relatives to do it.

Many in the middle will make this an ROI (return on investment) discussion. For example, if I can get a 15 year mortgage at 3% and make 5% on my money (guaranteed ?) then it's a no brainer to take the mortgage. (If I die and still owe 90% of the homes value (LTV) do I care or not care - does that affect what I leave my heirs ?), OR if I pay cash will I feel good about NO DEBT, but be shackled from a cash availability basis and NOT be able to take those lifetime dream trips, visit the kids many times a year etc etc ..

If you are in the middle, you most likely have a an IRA or 401K that will give you a "pleasant" problem to have after AGE 70 - RMDs .. Required Minimum Distributions .. some in the middle might not need that income, but decide thats an easy way to pay that mortgage .. Others might have moved all that money to ROTHs, where RMDs dont apply ..

My attempt here is to acknowledge the diversity of the population, and certainly to refrain from what is very common on nearly every topic on these blogs .. and that is ..

SIT BACK AND LISTEN FOLKS - THE SMARTEST PERSON IN THE VILLAGES HAS JUST ANSWERED YOUR QUESTION - NOT SURE WHY THE REST OF YOU EVEN BOTHERED ..

Sorry for the length of the response .. I hope you found it just a bit informative and thought provoking .

[TOMCAT]

My husband and I do not have the means to buy a house out right and need to take a mortgage. My brother, who is a CPA, and does my taxes said it would be better to buy my house with cash because of the tax situation. My husband is not worried about taking a mortgage as he thinks expenses will be lower there then where we are now in Long Island. I just want to get like a poll of who had a mortgage or not.

[Nucky]

Thurston Howell III here, Lovey and myself hate debt. We usually go the no debt route whenever possible. Simple old school rules run our finances. Our children talked us into electronic bill pay but other than that I like interest paid to me.

Our young ones love to be in debt and spend their money on fancy cars. A nice Ford, a beautiful Golf Cart, No Mortgage, it's a Beautiful Thing.