Paying off home loan ?

I want to pay off my home 10 yrs early. The more I talk to people, the more confused I become.
Some say do it, and others say that a lien on your property can be useful if some type of lawsuit would happen.
Owing money on a loan, or anything else, seems to me to be foolish.
Those of you that have paid off your home early, are there any regrets?

We paid off our home about 10 years ago and have no regrets. The peace of mind alone is well worth it.

If you are worried about protecting your home from creditors, you should talk to an experienced lawyer. Your state only allows for a $15,000 homestead exemption so it would be a worthwhile discussion. An attorney may advise you to transfer your home to an LLC or take similar measures now, before a creditor comes along.

No creditors after me,

I sleep good at night.

It all depends.

Do you have the cash to pay it off or are you talking about a little extra on each payment
What is your interest rate
Are you able to write off your interest on your taxes
Is your plan for retirement on track
Do you have kids that will be going to college in the future
What other opportunities do you have available for the money

Often times you are money ahead by doing something else with the money and keeping the mortgage. For example If you are paying 3% on the mortgage but need to beef up retirement accounts you are usually better off doing that. Also right now I bonds are paying 9.62%. It would be hard to make the case that paying off the mortgage is a better use of the money than getting that kind of return.

On the other hand I am sure that the piece of mind knowing that your home is paid for can be a great thing for many people.

look at the savings from interest you don't pay. One good Ideal is get you a HELOC . Home equity line of credit. You don't have to use it and it's like a rainy day check book. Also it keeps your credit rating up and active incase you need it . We paid ours of in 15 years . Saved us a little over 45,000 in interest payments.

I have the money to pay it off now. We have been paying extra on the payments for the last few years.

X 10

I would pay it off, it is a great feeling to be debt free.

Pay the mortgage off early. I put every extra cent on principle every month sometimes it was only $50 but watch the total drop. If worried about liability get an umbrella liability policy, probably one month's worth one interest for the premium.

If you only owe 10 years then you’ve already paid your interest. Your just paying the actual loan now.

No better feeling in the world. Pay it off as soon as you can. Hey if you dont like having a paid off home, you can always take out another mortgage on it.

We paid ours off in 2007. Interest rates were not nearly as low then as now, and inflation was much lower. That has all switched. With today's high inflation, the value of the money you are paying to the bank is less and less every month by a considerable margin. Your payment does not change, but it's value does. As I see it, in simple terms, if your rate is 3% and inflation runs 8% over the remaining term of the loan, you are 5% ahead every year by NOT paying off early.

I would not worry too much about legal issues of paying off early. To me the issue is and was do I have places to put that disposable cash that will earn me a better return or more asset gain than paying off a mortgage early. The time value of money shows that the earlier one invests the more growth one gets. Staving off investing or increasing investments for 10 years so one can reduce debt may be more costlly then the gain in being debt free.

In todays tight home real estate market, many of the buyers are bringing cash and lots of cash to buy homes and most did not make that money by prepaying on their home loans. The last 30 years in the market was very good and many are using those funds now in a down market to invest in housing.

Bryce

Mine has been paid off for years. It's a great feeling to have that piece of mind. From a strict financial point of view it may not have been smart but other considerations made it an easy decision. In my younger years I heavily leveraged investment property and stocks but those are different ballgames. In my case it worked out.

Pay off any other higher interest loans first, then pay off the house. Save or invest the same amount each month as your old mortgage payment

Actually, there is still interest , but early on was where the most is paid. I wish I could have paid more toward the principal early on, but that wasn’t in the cards. I am thinking I’ll just pay it off. I am looking to build a 40’ x 60’ shop. I could also do that with cash if I want, or get a small partial loan!

Dana I and EdP hit the nail on the head with their advice. Note that everyone else who said they paid their mortgage off early talked about the "feeling". It's an emotional decision. Which is totally fine. I'd love to pay my house off. I can't afford to spend money that emotionally right now. I need to be pouring money into retirement investments. My mortgage is around 3.5%. Inflation is 8% currently. For the time being I'll let inflation erode away the weight of that debt and invest in things that bring more than 3.5% returns. One day I hope to have enough invested to buy freedom and retire and then I'll pay that mortgage off! I just know that's an emotional decision, not sound financial decision making. And that's okay if you're in the position to do it!

I don't like owing anything and I don't like being owed anything.

Pay it off if you have the ability!

The sooner you pay it off the better-you will have more money in your pocket.
Anyone getting a mortgage should get what is called an accellerated mortgage-pay every 2 weeks instead of once a month.Also an allowance to double up payments from time to time with no penalty.Mortgage insurance is also good to get,in my opinion.it is cheap and your payments are covered if you have to go off work on workers comp or sick benefits.
My home mortgage was a 25 year mortgage and because of it being acellerated I paid it off in 14 years.

Paying off the loan is fine if you have plenty of money. But if you will then have to go get even a partial loan to put up your shop it is a bad idea. The interest rate on a new loan will be higher than you are currently paying unless you have a bad deal on your mortgage. Not to mention the fees that go along with the new loan and the hassle of going through the process of getting the new loan.

I can pay cash for a shop, which is great.

That seems to make more sense to me than paying it off just to go back and borrow the money again.
Unless you could somehow work out a better deal than you currently have. Which in this environment is highly unlikely.

to revisit the comments about creditors... when people are talking about not paying off your home in case of creditors they aren't talking about loans where payments are current. They are talking about getting sued, maybe a horrific car accident, something like that. If the judgment exceeds the insurance they can go after your other assets. Retirement accounts are protected from these sorts of things.

Depending on your interest rate, I’d invest the money and keep paying off the mortgage as others have said. A retirement Roth IRA or 401k is best.

Thus is why my farm is in a trust. The trust owns it I don't look up assets or property search and it won't show my name . When I die my wife become controler of the true and no probate. If she is able deadvat that point the kids become c ontrolers of the trust. May have been better approaches or options but it's what I did after thinking I would have to go bankrupt on medical bills from a car wreck. The guy didn't have enough insurance.

I didn't have to go bankrupt but I learned a lesson. I don't want to be in that spot again. On paper I don't want to own anything worth anything.

Pay it off!

100% of foreclosures happen to homeowners with a mortgage....nothing emotional about that.

Pay your house off. Never, ever talked to a single person that payed their house off early that said they regretted it. Have talked with several that did not pay off early when they had the chance only to unexpectedly lose a job or sustain a serious health problem that forced them out of a job. Those are real risks and that is what the other folks never add into their equations. They like to use straight math, but never figure in risk.

Pay your house off.

What can you invest in that guarantee More than 3.5% ? If he pays it off NO monthly payment is guaranteed plus mortgages aren’t compounded like interest paid to you . Pull up the loan and look at the amortization table it’s sickening what a 90,000 loan at 4% ends up costing over 25-30 years

Based on this going to cost you 134,280 bucks Up or down based on amount borrowed

Pull up the loan and look at the amortization table it’s sickening what a 90,000 loan at 4% ends up costing over 25-30 years

Which is why we chose to invest and be the earner of interest, gains and dividends. Amazing what a couple hundred per month adds up to in assets over 30 years. If lenders can make money at 4%, so can I.
Roughly you can take about half the rate paid over the length of the loan and multiply that by the principal amount. If one uses even 2.25% that is about $2100 per year or roughly 50-62K depending upon the length of the term.
Putting $200 away per month for 30 years is $72K with no return. At even 4% return that would well over 100K . Infact infation probably increases the equity in your home faster than prepaying debt if you invest even with average returns.
Bryce

If you invest in the stock market you likely own some mortgages.
Hope everyone keeps paying once the rates go up soon.

I am in the pay it off group. As mentioned by others, pay off other debts first with high interest rates and save paying the mortgage off last. Once you have absolutely no debt you can really get serious about your other financial goals. Once your final debt is paid don't borrow any more money, ever, for anything.

Financial security is knowing that everything you have is yours and no matter what you will have a place to live.

When I moved in to my house one of my goals was to have it paid off by the time I 50 .It took some determination .It required me to not have or wait for some things I would have liked to have / My thought at 50 I was still young enough to have many years left to treat ourselves to the things we wanted . I ended up being about 6 months short of my goal Sounds good except the company I was working went out of business right before I made my last payment .So after 33 years there I was now unemployed .Good news bad news No house payment to make .But no income .I was able to find another job .But at a lower wage and greater travel time . After about 2 years there things got slow and I was unemployed again That was during the Too Big To Fail Bank Crisis. Jobs where hard to find at he time .So I was unemployed for a long time .Once I got another job after about 6 months there I had a serious medical issue. So if I had not had my house paid off it would have been very difficult to get through the paying the bills and making house payments also . My idea of having money to spend to enjoy some of the nicer things in life did not work like I was planning . But I still am glad I was done with not owning my home free from any mortgage payment

Add me to this group. other than taxes, utility bills, yearly medical copays, haven't had a debt in over 25+ years. I struggled with buying a Kubota tractor, loader backhoe this spring. Couldn't decide, pay cash or zero % interest loan. The tractor cash was making money where it was sitting.

If you think you own your home free and clear, try not paying your property taxes every year.

Pay the home loan off. That way you can focus on other things. I'm not a financial expert.

I could not agree more All you do is rent the property you have paid off from the school district and any other government agency This country was established as a result of no taxation without representation .And it is supposed to be the government of the people for the people by the people .It has evolved into a government for the government of the government by the government

Always a great feeling not to be a slave to debt.

So bbw your saying instead of putting extra towards the principal to pay off early invest it somewhere? That’s crazy ! You want to get a retuning you money how’s this in 1996 we paid 84,000 fir our house interest was 7% ( no the world didn’t end) Paid 150 per month extra until we refinance at 4% anyway paid the house off in 12 years Now our house was appraised for 315,000 How’s that for an investment Plus no longer have a 800 bucks a month house payment Instead of putting money some where you hope is going to get 4 percent return why not pay off a loan that YOU KNOW is costing you interest Any interest you pay is wasted money When the crash hits and it’s coming those people that ran out a mortgage a paid for home and stuck it in a over inflated stock market or Bitcoin are going to be sorry 2008 all over again High fuel was the trigger then Now we have high everything

I have a loan in my first mortgage. Got the loan young and was just happy to get it. It was a 30 year term I'm 20 years into it. It was as 7.% I would have re financed it for a lower rate but my credit went into toilet after all the medical bills from the wreck where the guy ran a red light and killed my son. I was mad at the banks decided not to worry about fixing my credit. If I don't have cash I don't need it. Did that for 10 years.

Looked int refinancing last year since I took a year and rebuilt my credit back up just under 800. I wanted to cut the remaining 10 years to 5. Well they didn't want to go under 15 years adding time not reducing it. They offered other loan options but the fees are up most of the interest savings and it was not worth th hassle. I had the Cas to pay it off 2 time and did not and regret it. Currently my inlawa are renting it and paying the payment. I don't make any money but none is going out. I did put a few hundred a month extra on principle when th loan was. New before it was sold and I could pay at the local bank.
I'm getting ready to start adding extra to it again and when it's paid off it still be an income producing asset with value I can sale after they pass.

I bought th farm cash no regrets. Sure with th low rates and the market preforming like it did the last 10 years I would have been ahead way ahead to hav got a loan and let that cash grow at a much higher rare than the interest I would pay. But my credit was not fixed when I bought the farm so I paid cash.

There is freedom and security in both having Cash making money for you and owning your place free and clear. Both would be nice to have but I could only have one. I chose paying thing off and do not regret it.

I refinanced last year into a 10-year fixed rate of 1.875%. We pay about 50% more than our scheduled payment every month. Plan to move again in about two years. Sure wish I could take this loan with me. Maybe I can rent the current home to keep the low rate. It is the only debt we carry.

Pay it off. Interest is low now but why pay the extra money if you don't have to.

Hear is what I did I payed it of fast then to this day I make the same monthly payment to a separate account
I do the same with trucks iget the monthly payment pay it of at dealership and make that payment to my self to for when I need a new one
It's like this u make payments and get used to it so y not keep making them to yourself that is how I do it and still put money in savings monthly

If your not coming back just sell it before housing crash But do what’s best for you !

I am 56 and have not had a house payment for 10 years. Pay it off if you can. You can ride out a pretty bad storm if everything is paid.
But you have to maintain your credit rating. Lots of things based off your CR such as your insurance.

Exactly Cbat . That's why I suggested a HELOC (home equity line of credit. It shows up on your credit report but you aren't paying anything if you don't use it . Some banks charge 20 bucks a year to keep it active depending on what you have in other accounts.

If you don't like debt, pay it off or save until you have the cash. Investing over the long haul has been a proven way to gain assets. For those that lost their home in 2008 those with the least cash in them came out the best as they could file and start over in life. The system has been created to figure out how to manage money and cash is becoming less a part of that every decade.

Bryce

We paid our home off shortly before the "pandemic." And I lived in a state that didn't go jackboot and force people to stay home...

But for folks still having to make payments and living in a dictatorship... It must have been a nightmare.

Point is, with the current state of affairs it might be a good idea to own your place free and clear.

Mike

Thanks to all of you for the advice. I am going to pay it off, then save save save.

High fuel wasn't the trigger in 08.


How's that for an investment? Not all that good unless you didn't pay any RE taxes, insurance and upkeep. Looking at it from a strictly investment standpoint, you would have been far better off in an IRA in an IRA or incoming producing framland. From a strictly investment viewpoint BBW is correct. It's math pure and simple. No one can guarantee 4 percent but here is something to think about. If you have a loan for 4 percent today and inflation is 8 percent you are making 4 percent profit on that loan as long as inflation is 8 percent. I know it's hard to grasp yet simple math.

harttoflow, what to do is a personal decision. There is something to be said about owning your home free and clear and the sense of stability that comes with it. My recommendation is to take into consideration several factors and do what you think is best for your tolerance to risk.

One thing that was mentioned by Dana is if you pay it off and then have to borrow to build the shop, pay for the shop in cash and keep making the home payments. As he said your old loan will be at a lower interest than the new one will be.

Good luck to you.

I think that is a smart move.

Good decision, you wont be sorry

I just turned 40 Wednesday and I have 5 years left on mortgage, and I can't wait to pay it off. I bought a second home in Ohio 8 years ago with cash that I could have put on the loan but don't regret it. I am self employed and don't have a retirement so my wife has been putting 20% of her pay into a 401k for awhile. If I can just keep her from divorcing me later in life hopefully I should be okay. I say pay it off

Its been a while since I made this post. We payed off our home a while back, and have since decided to sell, and buy a home on more property. We have moved since paying off our home, and will have it on the market in spring. I’d list it sooner, but we need to do some updates before putting it up for sale.
Now we have a small farm, lake, hunting and trapping ground, and two neighbors that are on large properties.
No more bs from hoa’s for us!

I paid mine off in 10 years a 250k note my cpa said I would lose the deduction of interest and my quote to him is 7k interest gets me an extra 1500 bucks back on my tax refund all I see is a 5500 dollar deficit he didn't disagree , do what suits yourself I always had the philosophy it's not what you owe it's what you own that counts just my 2 cents ...Jon

Property taxes have nothing to do with paying off a mortgage . Property taxes are just a rip off and the only parcel of ground you ever own is your cemetery plot

We paid ours off about 10 years early My only regret is that I did not make a better attempt to pay it off even sooner .Job lay offs due to the Too Big to Fail Bank ;Crisis How about the irony of that . And health issue that impacted my ability to work If my mortgage had not been paid before those 2 problems happened I am not certain we would have been able to keep up the payments .If your everyday expenses are much more that your income it does not take long for a nice savings account which took years to save quickly disappears just by going to the gas station and grocery store . .Having my home mortgage paid was a game changer for me.

Yes sir a piece of mind is worth a lot of money

Is it easier for a home without a lien to be stolen?

I've been wondering this myself, I'm guessing not
If you did something illegal in a new vechile with 60 payments left on it, and .gov seizes it...what happens

You made the right decision paying it off. Mine is payed for and my first 320 acres as of last month. It’s a great feeling!

You made a great decision to pay off. All these folks trying to compare interest rates in the market to their mortgage are gamblers. They are gambling that theyll never be in an accident that prevents them from working, they are gambling their company never downsizes and lets them go, theyre gambling the market doesnt crash causing their employer to go under, the list goes on and on. 100% of forclosures happen to people with mortgages . Pay your mortgage off and THEN start investing heavy. Your income is your most powerful wealth building tool, if its not all going into payments, youd be surprised how fast it accumulates. Sounds like you found a great piece of ground...enjoy!!

Pay it off. Trusts won't protect you unless you completely transfer all ownership to another person. Meaning your name is on nothing and you are at the mercy of them letting you live there/give you money/pay off items, etc.

I’m not talking government seizure, I’m referring to fraud/forgery.

I'll never forget the day that we paid off our home. I walked into the Credit union puffed up like a banty rooster !! I fully thought balloons and confetti would fall from the ceiling ! I had been so busy working towards paying it off I hadn't really thought about the fact that it wasn't exactly a win for the bank. We signed all the paperwork and walked out. I said to my wife, " that was rather uneventful, she said, " What did you expect ? I said, " Balloons and confetti ? Later that day she gave me one of those little bitty balloons on a stick that said, Good job! It still brought a lot of pride to have it paid off and I have never regretted it. A sense of Pride that someone who has there debt forgiven will never feel.

I have about 1 year left. Can’t wait to feel that feeling myself!! Guess I will bring my own balloons……

I plan to move again in about three years. My current 10-yr rate is 1.875%. I sure do hate to give that up.

When I got the loan for my place, it was a 15 year loan and I paid it off in seven years. I put extra to the principal ever payment including the first and last. If I got a $40 a month raise in wages I put $30 more on the house and kept $10 as a cost of living expense. It isn't hard with a little discipline.

We paid Cash for our Fatm back in 2005. It has been the best knowing it is ours and not the Banks!!!

If you can be disciplined enough to not spend it, instead of paying extra on the mortgage each month save that money up until you have enough to pay it off all at once like the original poster. You’ll end up paying a little extra in interest, but it would be awful to pay extra every month for years and then lose a job and get foreclosed on.

Paid mine off. Invested on other things ever since with the savings. Getting along just fine these days.
I Also have the Heloc set up, unused. Makes the bank frustrated at times I think.

Osky

Better to make interest than pay it.

I'm going to pay mine off when I retire and I'm going to tell home insurance to take a hike also.

In preparing to retire we paid off our mortgage about 5 years ago. Cost us $40,000 but in the years we had left to left to pay it off we saved about $80,000 in interest. We have no regrets.

Dropping you homeowner insurance is a bad idea. If your house burns down, what do you do?? When we paid off our mortgage, we went to a different insurance co to insure our house for replacement value. It only cost us about $1100.00 a year. An acceptable price to pay. IMO

For sure.

I see a lot of people in lake Charles Louisiana where my brother lives dropped their insurance when their home was paid off. Their the ones that are living in a few rooms of the house that didn't get destroyed.

I buckled down and paid off a 30 year mortgage in 10 years when in my early 40’s and have been pretty disciplined to continue to invest and save, but it also gave me the financial freedom to enjoy myself while I still have my health as well.

Please don’t drop your homeowners insurance. I have had two coworkers bit by that over the years. One with major flood damage and the other lost their uninsured home to fire in which his wife was burned badly and latter died.

I will always have homeowners insurance. Heck, I don’t like to pay for insurance, but I don’t want to be without it.

No debt is good debt. Being debt free is a great way to live. Then you can pile in the savings and retirement funds!

Do as you wish but with that way of thinking you should ditch all insurance because it is a useless commodity until you need it , myself I am probably over insured but a piece of mind is worth the premium... Jon