[Taj44]

I'm just curious - do Villagers tend to own their own homes outright, or do they make mortgage payments? We paid off our house, not wanting to deal with a mortgage payment, but my spouse thinks a number of the newer Villagers in particular, have mortgage payments.

[getdul981]

I think it would be awfully nice to not have a mortgage payment, but I'm afraid when we finally do get our house sold and get moved to TV, we're gonna have one. I'm hoping it won't be any where near what we have now, bt we will more than likely have one.

[dfn8tly]

You know it's funny how the banks feel about this. If you don't make your mortgage payment they get kind of upset and start something called foreclosure which is like relocation to the bridge over Lake Sumter.

[Taj44]

Funny. I guess I just assumed that retirees would be mortgage-free, but now we're wondering otherwise.

[OpusX1]

Some do some don't. We don't.

[billethkid]

while it may bring comfort and peace of mind, there are tax advantages for certain income levels.
The advantage of course is multiple if one has a low interest mortgage like 5% for example. You get the write off as well as investing funds that would other wise have been used to pay off the mortgage. Most, investors I know, my age, carry a mortgage. The financial advantages far out weigh the bragging rights and comfort (a relative concept) of not having one.

The right strategy of course is the one that makes you happy and feel good about what you have done.

btk

[logdog]

I think I remember reading in the last Villages annual survey results that about half pay cash for their homes versus having a mortgage.

[SteveFromNY]

Originally Posted by billethkid

The right strategy of course is the one that makes you happy and feel good about what you have done.

btk

Perfectly said!

[swrinfla]

Yes, I pay a mortgage. Partly because I have done so almost forever and had no clue why anyone wouldn't being paying one!

While it would, of course, be very. very nice not to fork over the mortgage payment every month, it does give me some comfort that I can take a deduction for the interest paid.

When I pass on, my kds will have to decide what to do with my place - I assume they will sell it, and benefit therefrom, but they will also know that I've been careful with their "investment!"

My brother has had a gazillion homes and has never had a mortgage. He's still solvent, but notoriously "tight" so I don't why!

SWR

[zcaveman]

Originally Posted by billethkid

The financial advantages far out weigh the bragging rights and comfort (a relative concept) of not having one.

I think that is a personal opinion.

I do not brag. I do not have a mortgage. I am financially happy.

[784caroline]

When you are young and prosperous and "TIME" is on your side, having a mortgage is fine. To have a mortgage simply because there are tax advantages, at whatever tax bracket you are in, is crazy. For example if you are in the 33% tax bracket and you pay $1000 in mortgage interest...you do recoup approx $330 from uncle sam..BUT YOU STILL PAID $670 for every $1000 in mortgage interest . HOw is that a bargain!! Billiethekid said to invest the money you woul use to pay down the mortgage..well again when times were prosperous and one could tax the ups and downs of the market that may have been a fine strategy just as the advice was 10-20 years ago to take as large a mortgage as possible. In todays world, NO thank you...I play the market but not with money for the house .......peace of mind..best return you can have!

[Taj44]

Originally Posted by 784caroline

When you are young and prosperous and "TIME" is on your side, having a mortgage is fine. To have a mortgage simply because there are tax advantages, at whatever tax bracket you are in, is crazy. For example if you are in the 33% tax bracket and you pay $1000 in mortgage interest...you do recoup approx $330 from uncle sam..BUT YOU STILL PAID $670 for every $1000 in mortgage interest . HOw is that a bargain!! Billiethekid said to invest the money you woul use to pay down the mortgage..well again when times were prosperous and one could tax the ups and downs of the market that may have been a fine strategy just as the advice was 10-20 years ago to take as large a mortgage as possible. In todays world, NO thank you...I play the market but not with money for the house .......peace of mind..best return you can have!

My thoughts exactly. Mortgage prepayment makes a lot of sense these days considering extremely low fixed income returns, an incredibly volatile stock market and unstable home values. It makes even paying down 5% mortgages seem like a reasonable idea.

[GuyWin]

There's one BIG reason we don't ever want to have another mortgage: You end up paying double the amount mortgaged at the end of the 30 year mortgage at 5.31%. So if your mortgage is $200,000 you will pay $400,000.

[getdul981]

I don't understand why anyone would have a mortgage if they don't need to. The deduction is nice and any deduction is always welcomed. However, the duduction is not like it's a tax credit or anything like that. It's only the INTEREST that you don't have to pay taxes on. Of course it's better than interest on a car loan which is not deductible, but it's still money you've spent and don't have anymore. If you pay $1000 in interest, you're only saving $280 in taxes if you're in the high bracket. Any way you figure it, it's better to have that extra $720 in your pocket. That's just my opinion and it's worth exactly what you paid.

[Taj44]

Originally Posted by GuyWin

There's one BIG reason we don't ever want to have another mortgage: You end up paying double the amount mortgaged at the end of the 30 year mortgage at 5.31%. So if your mortgage is $200,000 you will pay $400,000.

I agree - could just not fathom giving that much money to the bank if there was a way around it. However some people can't afford their house otherwise.