Wait…..you wouldn’t go to a financial forum and ask for advice on saddle gear?!?!?!…….
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Is the idea of extra payments to your mortgage a placebo? Please educate me
- Thread starter HuumanCreed
- Start date
huntin_addict
Well-Known Member
Not for nothing, and a touch sideways, but you can get 12 month CDs right now for 5.70%. I've been cycling thru 3 month CDs for 5.25% or higher for the last 6 months, I buy one a month, now I have one maturing every month. They are, as of today at 5.45%, last week at 5.55%.
What is your interest rate? I have a 2.35% mortgage and a 1.94% car loan, I put zero down on both and I’m not paying either one off early. No, I’m going to stretch those till the bitter end. It’s almost like free money. With inflation the way it is, the money I’m paying the loans off with isn’t worth what It was when I took out the loans so I am making money there and making way more in investments. Win win. Also doesn’t tie up all my money and helps me maintain cash flow to enjoy life. Have no desire to sit home while I am still young enough to actually do things. I can sit home and pay off the house when I am too old to go anywhere or do anything. Of course all of the above is predicated on one having the discipline to live within one’s means.
There's 0 reason to take me seriously in a financial thread.
I just want to add that people don't always think holistically when discussing particulars. Finances are particulars. Sure, lots of things don't make financial sense. Paying off a low interest rate mortgage may not be "financially savvy." But why do you care about good financial decisions? Because you think that they'll make you happy. And that's cool. But would it make you happy to not have a mortgage or pay it off early? Would it make you happy to finance a Lamborghini and drive it when you're still young and sexy?
70% of kids lose the family fortune. 90% of grandkids lose it if their parents don't. Money is made up. People will whine about trading $100 in money for $100 worth of groceries, beer, or gasoline. But the money has 0 worth in and of itself. It exists to serve you, not the other way around. Save it, spend it, use it to snort coke off a bathroom seat. As long as you can enjoy it. And treat that old thought-thinker the same. He's on your payroll, not the other way around.
I am not qualified to give financial advice.
I just want to add that people don't always think holistically when discussing particulars. Finances are particulars. Sure, lots of things don't make financial sense. Paying off a low interest rate mortgage may not be "financially savvy." But why do you care about good financial decisions? Because you think that they'll make you happy. And that's cool. But would it make you happy to not have a mortgage or pay it off early? Would it make you happy to finance a Lamborghini and drive it when you're still young and sexy?
70% of kids lose the family fortune. 90% of grandkids lose it if their parents don't. Money is made up. People will whine about trading $100 in money for $100 worth of groceries, beer, or gasoline. But the money has 0 worth in and of itself. It exists to serve you, not the other way around. Save it, spend it, use it to snort coke off a bathroom seat. As long as you can enjoy it. And treat that old thought-thinker the same. He's on your payroll, not the other way around.
I am not qualified to give financial advice.
Can you do both? That’s what my wife and I did. Paid off the mortgage in 15 years and also invested some. A key for me is understanding that just because you invest the money doesn’t mean you are going to make money, and the 8% return is an average over many years. Just an opinion, but if you can do a little of both you are spreading out your risk.
Also, I will caution you that after paying off your mortgage you are in danger of your wife looking round and deciding the whole house needs to be updated and having to get another mortgage
Also, I will caution you that after paying off your mortgage you are in danger of your wife looking round and deciding the whole house needs to be updated and having to get another mortgage
- Joined
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Along kinda~somewhat with what @Nutterbuster said, sans the coke off the toilet seat descriptor, my final advice to you @HuumanCreed is to listen to your wife!! Sounds like she’s got a good head on her shoulders. That’s probably the best investment you can make at so many levels.
huntin_addict
Well-Known Member
True story.
D
deleted_user06
Guest
I’m blown away by some of the rates you guys get, my first mortgage was a VA loan at 3.74% and that was the bees knees to me in 2009. This new mortgage I already knew was going to be higher due to the current market (purchased Oct ‘22) and it’s at 6.92% which is ok for these times. But I’ve never in my life no matter what have gotten any car, normal loan or credit card for under 15%. And I have great credit and always have I’ve never gone down more than 40 points since I was building credit in my late teens. And on top of that I only deal with credit unions no banks which have had better rates overall. I mean I ain’t hurting but some of y’all’s rates I’d kill for lol
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I’m honestly surprised that your last sentence isn’t more commonly understood.
The gift of a mortgage at a rate near average inflation is truly a life changing one. Anyone trying to trade that gift in for pride or some short term emotional or mental stability needs to have their hands slapped.
The typical caveat - this assumes you’ve purchased a home you can afford to ride out based on income and outflows. And if that isn’t true, paying it off in 22 years instead of 30 doesn’t derisk the situation.
This is just right down the middle vanilla stuff.
Id say you're already ahead of the game mentally. I cannot believe how many people pay off a perfectly good vehicle and go out and buy one the next day. Literally vehicle payments their entire lives.
That's not just stupid. It's advanced stupid
That's not just stupid. It's advanced stupid
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- Jun 28, 2019
- Messages
- 9,410
So true, especially because the value of that “asset” depreciates so readily. So you’re paying interest on something that decreases in value. That’s why I never buy a brand new car, I can’t get over how much you lose just driving it out of the showroom. It’s like lighting $5-$8k on fire, and then paying interest on that to boot!?!? At least with a mortgage your asset appreciates in value over time, assuming proper maintenance. A much sweeter pill to swallow for sure. Finally, if you’re considering refinancing your house and have debts, consolidate them in a HELOC and you can at least claim the interest you pay on this on your income taxes.
If you're in the market for a car right now you should probably consider new if you can afford it. Saving $5k to give up 50k-80k miles isn't worth it. The used market is insane lately.
Yep. I bought used cars most of my life, and as someone who puts 30 to 40,000 miles a year on a vehicle Ive bought a lot of them. Unless you’re talking a highly optioned vehicle , I just can’t get a used truck to make sense anymore. With dealer incentives and financing I can get a new truck almost as cheap as a used truck that’s two years old and has 30k miles.
A real world example. My wife just bought a new Subaru outback last year. She test drove a 2019 model to see if she liked the car but the salesman told her if she was willing to wait 60 days she could order a brand new car cheaper. She ordered a 2022, added some additional options that the 2019 model didnt have and the total cost was over 1k cheaper than the used 2019. They sold the 2019 model the next day to someone who couldn’t wait 60 days.
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Empostarr
Well-Known Member
A thing you can do that most people don't know about is you can see if your mortgage company will recast your loan after you've paid down so much extra principle. The company I work for allows it after you've paid off 10k of the principle outside of your regular monthly payment amount. A recast just recalculates your payment based on your new principle amount. It's a re-amoritization schedule. So you can pay it off faster AND reduce your regular monthly payment. I think we only allow a certain number of recasts over the life of the loan
The car you just paid off is going to need replacing some day. Assuming you have no other debt, continue to pay yourself the car payment into a designated car fund and pay cash next time.
Just did that to buy a reliable truck, while earning 4% on that account...
elk yinzer
Well-Known Member
Pay off higher interest loans first, regardless of principle balance. It's not wizardry, it's math.
Aside from your house, don't take on any debt that doesn't generate income or project to appreciate in value. You can use some mental gymnastics there, but pay for toys in cash.
Aside from your house, don't take on any debt that doesn't generate income or project to appreciate in value. You can use some mental gymnastics there, but pay for toys in cash.
BuffaloBill
Well-Known Member
I’d like to pay our mortgage off at some point. But it doesn’t make sense financially if I can earn a higher interest in investments. Especially at 2.25%. Ours is 3.375%. Not as low as yours but not horrible either.
We recently just got rid of the PMI that helped a bit. We have most of our savings with Ally and they are at like 4.25% now. I also just had to start paying on student loans since I decided to go back to school three years ago. Fortunately our vehicles are paid off, until my wife upgrades to something a little bigger than her CRV that can haul the kids and everything else around more comfortably.
At your interest rate I would put extra money elsewhere unless you’ve maxed out 401K, IRA, etc.
We recently just got rid of the PMI that helped a bit. We have most of our savings with Ally and they are at like 4.25% now. I also just had to start paying on student loans since I decided to go back to school three years ago. Fortunately our vehicles are paid off, until my wife upgrades to something a little bigger than her CRV that can haul the kids and everything else around more comfortably.
At your interest rate I would put extra money elsewhere unless you’ve maxed out 401K, IRA, etc.