"Debt free except for mortgage"...

[CalDisneyMomof2]

Well, yes and no. We moved here by chance just before our oldest son was born. We have 2 kids. They are both autistic. We found out back then that Irvine is THE place to be in So Cal with autistic kids because of the amazing special education programs they have in the district here. Nothing even remotely compares anywhere nearby. So, we are staying put until they are both aged out of the district programming. We are military so had to leave for 4 years and live in Northern VA, which was awful in terms of schools. We were lucky to come back a few years ago and my husband will retire out of here in about 2 years. The military thing is also why we have never felt comfortable buying a home. We haven't moved too many times (we got lucky there), but it was always a possibility and we didn't want to deal with buying and selling or being landlords. We could have bought a home in a cheaper area closer to base (Pendleton), but the schools and the special education services are our top priority. Plus, we love Irvine. It's the best place I've ever lived (I've lived in 5 states and 8 cities in my life and nowhere comes close). We are happy to rent forever if it means we can keep living here.

It doesn't hurt that we get a tax free housing allowance of almost $3800/month either. It pays for our rent AND all our utilities, so I can't complain.

Ahhhh. That makes sense. I can't entirely relate because my children don't have special needs but I completely understand finding a place that fits all yours and your children's needs.

My 9 year old started crying yesterday when I was talking to the realtor because he didn't realize until our conversation was over that we'd be renting in the same city. He's a very emotional guy and the thought of moving (we've thought about it) creates a lot of emotional stress for him. Our district is so small and amazing and I can't imagine moving, now. Again, I can't comment on special ed dept. but overall it's amazing so I too would have a hard time leaving!

 

[Nebraska_Disney]

Your point is taken, but the big difference (to me) is that I could move around semi-liquid assets and savings and pay off my house today if I needed to. Net worth is an entire different subject though. In most instances, renting or owning, you are going to have monthly expenses related to your housing. Even after it is paid for, your house is going to need monthly attention in your family budget for taxes/insurance/maintenance. With that in mind, it is more like an expense that if you rent, it never goes away and if you own, it will be reduced sharply after 15-30 years (or less).

 

[afan]

The thing is, most people want a place to live which means they have to pay something whether it's rent or mortgage. Housing, unless you've paid your mortgage off, is something most people have to pay. Most people can't buy all cash for a house or don't because they want the deduction benefits. Yes the house could lose value, the housing market could crash etc, but you either have a mortgage or rent and at least the mortgage gives some benefits that rent doesn't with deductions. A lot of areas you can buy for less than you can rent. There are additional costs with maintenance etc that you don't have when renting but if your mortgage is less than rent I think it all evens out.

 

[DLgal]

CNBC: It's better to rent than to buy in today's housing market.
https://www.cnbc.com/2018/09/05/its-better-to-rent-than-to-buy-in-todays-housing-market.html

Timely.

 

[TwoMisfits]

CNBC: It's better to rent than to buy in today's housing market.
https://www.cnbc.com/2018/09/05/its-better-to-rent-than-to-buy-in-todays-housing-market.html

Timely.

"In 16 of the 23 major metropolitan markets covered in the research, renting is a better investment than buying. These cities include Atlanta, Dallas, Denver, Houston, Los Angeles, Miami, San Francisco and Seattle. It is still, however, better to buy than rent in much of the Midwest and Northeast, with Chicago and Cleveland showing the best ownership scores."

And note, this studied only major metros...

 

[jen7233]

My perception has been when I hear the term "debt free except the mortgage" on here or on the guy with the talk show is that the person wants to identify to others that they aren't careless with credit cards and loan debt or have scraped their way out, or that they don't believe in using credit except for a mortgage. That's been my thought when I read it, especially on a place like the budget board. It has become a term I see so much more frequently on here.

We rent right now but we have owned two homes in the past. One thing I love about renting is when something goes wrong, I'm not the one with the bill. Like right now the deck will be redone to the home we are renting because it's a safety hazard and I'm sure that is going to cost the owner a bit. On the other hand, when we owned I felt like we got things done quicker! I'm happy renting right now though, and we live in a very high cost of living area outside a major metropolitan.

 

[GlamMistress]

I have a mortgage. I have no other debts.

About 4 months ago, DH and I decided to kick it into high gear and kill the mortgage early. It will take us probably 10 years from today to pay it off, meaning we'll own our home outright in 14 years versus the standard 30. (We do have a 30 year note). For the past year, I went back and forth with all the calculators and the debates in the FIRE (early retirement) groups I'm in, debating paying off the mortgage early. Most folks say to carry the mortgage because it's cheap money. At the end of the day, I just don't like debt and I don't want to owe anyone, anything. So I can't wait until I'm part of the true no debt club! When the house is paid off, I'm retiring - way early!

 

[Shanti]

...is like saying "I'm Gluten Free except for my daily loaf of bread."

Sorry, just a pet peeve of mine from this board. How can you leave the single largest debt most people have out of the equation like that?

Mortgage is a debt that you can get some tax relief from, and it is a relatively low, fixed rate for most people. It's nothing like revolving credit accounts. There's a big difference between having a mortgage and owing a lot of money for credit cards or personal loans. Everyone needs a place to live, so you can be quite frugal and financially careful, yet still have a mortgage.

A mortgage is more fiscally prudent than renting, because within 15-30 years of the purchase, you'll be done paying for housing, whereas if you rent, you'll always have to pay rent.

 

[DLgal]

A mortgage is more fiscally prudent than renting, because within 15-30 years of the purchase, you'll be done paying for housing, whereas if you rent, you'll always have to pay rent.

You'll never be done paying for housing when you pay off a mortgage because of property tax and maintenance costs. I will be curious to see the condition of those homes that went up in 4 months during the housing boom of the early 2000's in another 15-20 years.. Those houses won't hold up much beyond 30 years, if they even last that long. Shoddy construction and cheap materials don't create houses that last forever. The repair costs will always be an issue.

 

[DLgal]

My perception has been when I hear the term "debt free except the mortgage" on here or on the guy with the talk show is that the person wants to identify to others that they aren't careless with credit cards and loan debt or have scraped their way out, or that they don't believe in using credit except for a mortgage. That's been my thought when I read it, especially on a place like the budget board. It has become a term I see so much more frequently on here.

We rent right now but we have owned two homes in the past. One thing I love about renting is when something goes wrong, I'm not the one with the bill. Like right now the deck will be redone to the home we are renting because it's a safety hazard and I'm sure that is going to cost the owner a bit. On the other hand, when we owned I felt like we got things done quicker! I'm happy renting right now though, and we live in a very high cost of living area outside a major metropolitan.

I'd prefer people say "consumer debt free." That makes more sense.

 

[DLgal]

"In 16 of the 23 major metropolitan markets covered in the research, renting is a better investment than buying. These cities include Atlanta, Dallas, Denver, Houston, Los Angeles, Miami, San Francisco and Seattle. It is still, however, better to buy than rent in much of the Midwest and Northeast, with Chicago and Cleveland showing the best ownership scores."

And note, this studied only major metros...

Well, most housing studies only look at major metropolitan areas. Those are the population centers of our country, where the vast majority resides.

 

[Shanti]

You'll never be done paying for housing when you pay off a mortgage because of property tax and maintenance costs. I will be curious to see the condition of those homes that went up in 4 months during the housing boom of the early 2000's in another 15-20 years.. Those houses won't hold up much beyond 30 years, if they even last that long. Shoddy construction and cheap materials don't create houses that last forever. The repair costs will always be an issue.

Renters have to pay taxes and maintenance, too. It's bundled into their rent that is charged, whether the owner declares it or not. The obvious point is that the basic cost of housing will be paid for- that's a huge monthly payment that will go away for home-owners, but that will keep going up and up for renters.

All property in my city has values that have steadily risen over the past half-century. Even if the house magically disintegrated, the land our homes are on would be extremely valuable in 15-30 years.

 

[marthachick]

For the past year, I went back and forth with all the calculators

We pay bi-weekly and pay extra then and extra amounts every month. I can’t find a calculator that will tell how quickly we will have it paid off. Do you have a good calculator to help me?

 

[bababear_50]

I am Debt Free with NO Mortgage. I own my home.
If owning allow for "Murphy" to visit and regular home maintenance costs.

JMHO (Just My Honest Opinion),, I need to state that I am a member of the Budget Board Debt Dumpers 2018 and debt can occur at anytime of your life and preparing for it is important. I restarted at age 40 without a penny and three teens to support.

When my eventual retirement comes about I will have less income than when I was working, even with savings ,,work pension and government pensions therefore I felt it best to not have a mortgage payment.

Whether renting or mortgage,,, either way you need a strong financial plan.I can't emphasize how important this is for women.
If renting allow for cost of living /inflation costs and availability.
Far too many people have no *plan* at all.

Our next generation unfortunately face a lot of challenges in the rising costs of housing,,many just can not afford to buy in and that spells bad news for current owners (equity) and for communities/government who soon may have to help with the cost of housing for seniors.
Every report I have read states that the amount of seniors needing housing accommodation assistance in the near future is going to be astronomical.
So either way PLAN.
Hugs Mel

https://www.cnbc.com/2018/05/15/how-much-americans-have-saved-for-retirement.html
https://www.bnnbloomberg.ca/32-of-canadians-are-nearing-retirement-without-any-savings-poll-1.991680
https://business.financialpost.com/...ings-is-756000-according-to-poll-of-canadians
https://www.cnbc.com/2018/05/11/how-many-americans-have-no-retirement-savings.html

Old article but really had me thinking when I found out my grandmother's monthly room at a retirement home-with 1 meal a day was costing $5,500 a month.
https://seniorhousingnews.com/2015/04/27/why-senior-living-must-change-dramatically-by-2050/

 

[Shanti]

CNBC: It's better to rent than to buy in today's housing market.
https://www.cnbc.com/2018/09/05/its-better-to-rent-than-to-buy-in-todays-housing-market.html

Timely.

The article you quoted was only referring to purchasing and owning a home. Not continuing to own a home already purchased. It's obvious that there are better and worse times to buy, but if you already own a valuable home with good rates, you're much better staying where you are than beginning to rent.

I could easily rent my house out for more than what I pay for it in mortgage & taxes. Houses in my area rent for quite a bit more than what I pay for it, because property values have risen so much in the 10 years since I purchased my home. So my mortgage is quite a good investment.

 

[GlamMistress]

We pay bi-weekly and pay extra then and extra amounts every month. I can’t find a calculator that will tell how quickly we will have it paid off. Do you have a good calculator to help me?

I pay extra every Friday and that's where it gets tricky. There aren't a lot of good calculators for this type of payment frequency. Here's a couple:

https://www.daveramsey.com/mortgage-payoff-calculator

https://www.mortgagecalculator.biz/c/additional-payments.php

https://www.calculator.net/mortgage-payoff-calculator.html

 

[marthachick]

I pay extra every Friday and that's where it gets tricky. There aren't a lot of good calculators for this type of payment frequency. Here's a couple:

https://www.daveramsey.com/mortgage-payoff-calculator

https://www.mortgagecalculator.biz/c/additional-payments.php

https://www.calculator.net/mortgage-payoff-calculator.html

I’ll check them out! Thanks!

 

[Nebraska_Disney]

You'll never be done paying for housing when you pay off a mortgage because of property tax and maintenance costs. I will be curious to see the condition of those homes that went up in 4 months during the housing boom of the early 2000's in another 15-20 years.. Those houses won't hold up much beyond 30 years, if they even last that long. Shoddy construction and cheap materials don't create houses that last forever. The repair costs will always be an issue.

If they were built to code, not much to worry about

 

[Nebraska_Disney]

Whether renting or mortgage,,, either way you need a strong financial plan.I can't emphasize how important this is for women.
If renting allow for cost of living /inflation costs and availability.
Far too many people have no *plan* at all./

I’d argue that having a plan is great regardless if you are a woman or man as being financially smart benefits either sex. IMO

 

[dhardawa]

I live in an area with a low cost of living. I bought my home 13 years ago for $148,000. I owe $40,000. To buy this house today would cost me about $220,000. Right now, my payment is $976 a month including insurance and taxes. Once it is paid off, my insurance and taxes will run me about $200 a month.

To rent a similar home is anywhere from $1,200 - $1,400 a month. Even a cheap one bedroom apartment runs in the $700 range. So, that $200 a month is a very cheap monthly cost for a place to live.