[nanci2539]

I tend to agree with Muscle. Our financial person more or less said the same thing. Having a small mortgage (if you can afford it of course) gives you more cash and lets face it, for those of us with kids or relatives, they get the house when we pass on anyway. They can pay off the mortgage with the sale of the house.

Having more money in your investments makes sense - you can withdraw from your investments - how do you do that with a mortgage free home. It only works if you sell it and for us, we hope, TV is going to be our last home.

[chuckinca]

Historically, the stock market AVERAGES about 10% increase per year and inflation AVERAGES 3% per year so you net out on AVERAGE 7% per year. An AVERAGE of 1% over the mortgage cost.

I don't want to be stuck on a down turn of the market or up turn of inflation trying to make monthly mortgage payments from the proceeds of the stock market.

I'm paying off the mortgage from my investments when I retire and eliminate the $1,000 or so monthly expense and the worry of what might happen to the market.

If we get in a major cash crunch later, we can think about opening a new mortgage.

[RCT]

so, if you find yourself in a cash crunch, then THAT is the time you want to start making monthly payments?!?!?! That doesn't make sense to me, what am I missing here?!?!?!

[SteveFromNY]

Originally Posted by muscles59

so, if you find yourself in a cash crunch, then THAT is the time you want to start making monthly payments?!?!?! That doesn't make sense to me, what am I missing here?!?!?!

I think what it means is this:
You need $20,000 cash, but don't have it, but have a house with a lot of equity. A 30-yr fixed at around 6% costs around $6 per thousand. So you could have $20,000 in cash and only have to pay around $120 per month. Of course these are rough numbers, but I think that's the point being made.

[RCT]

Exactly, steve, understood, but, you know that of that 120 a month, how much is paying off the actual loan, not much, is mostly going to the interest, wouldn't it be? keeping money in diversified investments, should easily pay your mortgage and much more, in my knowledge. just seems to me you want your money working for you, and not all tied up in yopur house. i understand real estate values rise and all, but with a spred out investment portfolio, you should exceed the real estate market in long run

[chuckinca]

Paying off the mortgage is having the money work for you. You can save the 6% mortgage interest or you can hope to make 7% in the market.

There isn't a market broker anywhere who will tell you to take your money out of the market.

Common investment stratagy is to be financially conservative in your retirement years; conservative investors go into the bond market and make less than mortgage interest.

(and Stevefrom NY correctly answered the later mortgage issue - you use the mortgage funds to alleviate the cash crunch)

[SteveFromNY]

Originally Posted by muscles59

Exactly, steve, understood, but, you know that of that 120 a month, how much is paying off the actual loan, not much, is mostly going to the interest, wouldn't it be? keeping money in diversified investments, should easily pay your mortgage and much more, in my knowledge. just seems to me you want your money working for you, and not all tied up in yopur house. i understand real estate values rise and all, but with a spred out investment portfolio, you should exceed the real estate market in long run

I'd personally rather keep the $20K in the "bank" and use the home equity to fund my cash crunch, whatever it is (as long as I can afford the $120/mo). It's probably more a personal preference than anything else, but I just feel the home equity is an untapped resource, and my cash is my cash and I'd like to leave it whole. :dontknow:

[larrydube]

If you need money after you retire and you have your home all paid for you could always take out a reverse mortgage.

[JohnN]

I think there are valid pro and con points for having or not having a mortgage. If you want the peace of mind of minimal cash outflow, then go mortgage free. If you have the financial discipline to get a higher return than your mortgage costs, go for the mortage. The key point being don't overspend and have a mortgage - and not have enough cash flow.

[coach]

As a four year Villager I think the 3000-3500 per month without a mortgage is about right to be able to do just about anything you want any time you want. I think the area that you can go over budget the fastest is dining out. You will have sooooo many opportunities to eat out with friends, neighbors, golf buddies, etc. that it can quickly add up to a big monthly expense. We eat out about twice a week but if we accepted all invitations it would be 8-10 times.

[RCT]

Good points all, I especially like the "peace of mind" thing, whatever you do, if it gives you that peace of mind, you can't put a price on that, now can we?

[Pete]

There are sure a lot of respones to the original question.

The web page on the Villages was quite interesting.

I think the bottom line is between 3 &4k, no sense living in paradise if you can't afford to do the things you want to do in paradise!

Thanx for all the respones.

[Happy Villager]

Currently our costs average around $700 per month living in TV. This amount only includes amenities, gas & electric, water, sewer, trash, cable, telephone, pest control and lawn service. To this amount you would need to figure your cost if you have a mortgage, car payment, food and entertainment expenses over and above the free activites available here in TV. It doesn't cost anything except your monthly amenity fee to use any pool, tennis courts, horseshoe pits, shuffleboard courts, pool tables, pickleball courts or walking areas. There are also clubs to join and places to play cards or bingo and get togethers with neighbors. Our cost to live in TV is less than what we needed living in Saratoga Springs, NY. Our taxes are lower, our gas cost for our car is usually only around $40 per month because we do mostly everything in our electric golf cart. The movies are less expensive here too and you can go to a show at the Savannah Center for $12.00. We made sure we weren't going to be house poor when we moved here and we know that if either of us passes away the surviving spouse will be able to maintain the same standard of living. You need to have a plan and work your plan. Personally I think everyone should live in TV because it is really a great lifestyle and so pretty here.

[Sandy222]

Of course there are many variables in this question. We are humble people who enjoy life everyday. BUT we live modestly and are very fortunate to live here in TV. The income needed depends so much on the size house you buy.....the bigger the house the larger the fees for water, bugs, lawn and A/C etc.. I would rather play than pay. We believe that mortgages and debt do not mix with retirement. There are so many free activities to enjoy BUT golf and college classes are $$. Eating out does need to be added into the budget. I never thought we would eat out this much.....love it.

Its a lifestyle that is just so great!!!

[Happy Villager]

Originally Posted by Sandy222

Of course there are many variables in this question. We are humble people who enjoy life everyday. BUT we live modestly and are very fortunate to live here in TV. The income needed depends so much on the size house you buy.....the bigger the house the larger the fees for water, bugs, lawn and A/C etc.. I would rather play than pay. We believe that mortgages and debt do not mix with retirement. There are so many free activities to enjoy BUT golf and college classes are $$. Eating out does need to be added into the budget. I never thought we would eat out this much.....love it.

Its a lifestyle that is just so great!!!

I forgot to mention in my prior post but the Executive golf is also part of the monthly amenity cost there is no additional golf cost unless you choose to play on a Championship course.