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Yay! Paid off my mortgage today!
Posted by: Rick-o
Date: April 13, 2007 12:27PM
Well, made it to the end. I got the paperwork today with a check for $590.00 and a hearty congrats from the mortgage company.

A 15 year mortgage paid off in just over 7 years. I guess I'll now have some extra cash for my Mac addiction.

Or maybe I should start looking for an upgrade? Isn't that real estate bubble about to burst and there will soon be all kinds of fantastic bargains? (I'm just giddy, no plans to upgrade, but, if the right deal comes along...)

Friday the 13th be damned. I'm celebratin' tonight!



Mr. Lahey: A lot of people, don’t know how to drink. They drink against the grain of the liquor. And when you drink against the grain of the liquor? You lose.

Randy: What the @#$%& are you talking about?



Edited 3 time(s). Last edit at 04/13/2007 12:29PM by Rick-o.
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Re: Yay! Paid off my mortgage today!
Posted by: jimbrady
Date: April 13, 2007 12:28PM
Awesome. 7 years could be a record.



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Re: Yay! Paid off my mortgage today!
Posted by: graylocks
Date: April 13, 2007 12:29PM
landed gentry LEADER!

congrats!
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 12:32PM
Quote
Rick-o
Or maybe I should start looking for an upgrade? Isn't that real estate bubble about to burst and there will soon be all kinds of fantastic bargains? (I'm just giddy, no plans to upgrade, but, if the right deal comes along...)

Depends on where you're at, but people have been saying that for ~40+ years and it hasn't happened.

Sorry to say, but paying off your mortgage is one of the worst investments out there.




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Re: Yay! Paid off my mortgage today!
Posted by: papercup
Date: April 13, 2007 12:34PM
Quote
M A V I C

Sorry to say, but paying off your mortgage is one of the worst investments out there.

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Re: Yay! Paid off my mortgage today!
Posted by: blusubaru
Date: April 13, 2007 12:37PM
Now sell it!
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Re: Yay! Paid off my mortgage today!
Posted by: mattkime
Date: April 13, 2007 12:40PM
if you paid off your mortgage so quickly then you must be doing something wrong.

your house must be small and your car must be rusted.

you, sir, are not what we want out of american consumers.



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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 12:40PM
Quote
papercup
Quote
M A V I C

Sorry to say, but paying off your mortgage is one of the worst investments out there.


ok, ok...

Congrats Rick-o! The fact that 1.) you actually bought a house all those years ago and 2.) were financially responsible enough to pay it off rather than refinance it every few years and buy toys with the cash is a REALLY GOOD THING.




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Re: Yay! Paid off my mortgage today!
Posted by: Fritz
Date: April 13, 2007 12:48PM
quick, go buy a pair of sox



!#$@@$#!

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Re: Yay! Paid off my mortgage today!
Posted by: Grateful11
Date: April 13, 2007 12:52PM
Quote
M A V I C
Sorry to say, but paying off your mortgage is one of the worst investments out there.

I'm in the position now where I'm not paying enough interest to itemize anymore so paying it
off sure couldn't hurt me tax wise. All I can do is take the std. deduction on Federal.



Grateful11
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Re: Yay! Paid off my mortgage today!
Posted by: AlphaDog
Date: April 13, 2007 12:58PM
M A V I C, I really do agree that paying off a mortgage isn't always the best way to leverage money, but you are looking at that mainly from only one perspective. You are much younger and still in your "growth" years. Carrying high debt is fine at your stage of life. There are, however, many very good reasons why others want and/or need to get out from under a monthly mortgage payment.

Congratulations, Rick O!!!!! smiling smiley

Don't buy too many toys, though. I do agree with M A V I C to the extent that as much of that mortgage money as possible should be socked away for your future.
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 12:59PM
Quote
Grateful11
Quote
M A V I C
Sorry to say, but paying off your mortgage is one of the worst investments out there.

I'm in the position now where I'm not paying enough interest to itemize anymore so paying it
off sure couldn't hurt me tax wise. All I can do is take the std. deduction on Federal.

Well, that's only a small portion of it. One can use the cash in their house at ~6% interest to buy another property which will appreciate at 10-35% depending on the market. And it appreciates at the value of the property, not at how much cash you put in.

So take out 100k @ 6%, buy a 300k house at 6%... so you're going to net ~5-30%. Add in renting the house out and the profit increases.

Maybe Rick-o has already done a bunch of that. I know one guy who used the equity in his house to buy rentals for a decade or so. He was pretty slow and extremely conservative about it. After a decade or so the passive on his rentals then paid off his main house. So not only had he paid off his house, but he also had a few million worth of rentals.

There's a lot of other creative ways to do it as well. I know a couple that several years ago was bankrupt and just doing real estate they now have a net worth of around $8M.

Their goal this year is to give away $1M to orphanages.




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Re: Yay! Paid off my mortgage today!
Posted by: Jp!
Date: April 13, 2007 01:03PM
Quote
Rick-o
Well, made it to the end. I got the paperwork today with a check for $590.00 and a hearty congrats from the mortgage company.

A 15 year mortgage paid off in just over 7 years. I guess I'll now have some extra cash for my Mac addiction.

Or maybe I should start looking for an upgrade? Isn't that real estate bubble about to burst and there will soon be all kinds of fantastic bargains? (I'm just giddy, no plans to upgrade, but, if the right deal comes along...)

Friday the 13th be damned. I'm celebratin' tonight!

Now you have all that equity in your home not doing anything for you.
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 01:04PM
Quote
AlphaDog
M A V I C, I really do agree that paying off a mortgage isn't always the best way to leverage money, but you are looking at that mainly from only one perspective. You are much younger and still in your "growth" years. Carrying high debt is fine at your stage of life. There are, however, many very good reasons why others want and/or need to get out from under a monthly mortgage payment.

It's not really about the amount of debt one carries, but how they leverage their assets. If I was in my ~60's I'd want my home equity divided up into seven or eight properties, at least. If it's all in one and something happens... and that's just from a protection perspective.




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Re: Yay! Paid off my mortgage today!
Posted by: Jp!
Date: April 13, 2007 01:05PM
Quote
AlphaDog
M A V I C, I really do agree that paying off a mortgage isn't always the best way to leverage money, but you are looking at that mainly from only one perspective. You are much younger and still in your "growth" years. Carrying high debt is fine at your stage of life. There are, however, many very good reasons why others want and/or need to get out from under a monthly mortgage payment.

Congratulations, Rick O!!!!! smiling smiley

Don't buy too many toys, though. I do agree with M A V I C to the extent that as much of that mortgage money as possible should be socked away for your future.

It ABSOLUTELY is not always or ever the prudent thing to do.

first hit I saw on the subject.

[www.usatoday.com]



Edited 1 time(s). Last edit at 04/13/2007 01:07PM by Jp!.
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Re: Yay! Paid off my mortgage today!
Posted by: Robert M
Date: April 13, 2007 01:07PM
M A V I C,

You said "Sorry to say, but paying off your mortgage is one of the worst investments out there.".

Care to go into more detail? I plan to pay off my mortgage as quickly as reasonably possible for many reason. However, if paying it off and no longer having it as debt is a bad thing, then I definitely want to know why.

I realize a mortgage for some people is an inexpensive way to get money. For example, it's less expensive than carrying significant amounts of debt and paying horrible interest on a credit card. No doubt of that. But, I like to think not having the debt altogether and paying less in interest over the long-term is a good thing.

Robert
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Re: Yay! Paid off my mortgage today!
Posted by: AlphaDog
Date: April 13, 2007 01:12PM
Quote
M A V I C
Quote
AlphaDog
M A V I C, I really do agree that paying off a mortgage isn't always the best way to leverage money, but you are looking at that mainly from only one perspective. You are much younger and still in your "growth" years. Carrying high debt is fine at your stage of life. There are, however, many very good reasons why others want and/or need to get out from under a monthly mortgage payment.

It's not really about the amount of debt one carries, but how they leverage their assets. If I was in my ~60's I'd want my home equity divided up into seven or eight properties, at least. If it's all in one and something happens... and that's just from a protection perspective.

You know, it's not that I disagree with what you say, but I find it somewhat annoying that you are often so judgmental about the path other people choose to follow. It's obvious that you have very clear goals and objectives and a plan to meet them. I applaud that. However, one model just doesn't fit everybody. Thank goodness.
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Re: Yay! Paid off my mortgage today!
Posted by: Seacrest
Date: April 13, 2007 01:22PM
You could always be this guy:
[www.iamfacingforeclosure.com]

I say congrats on paying off the MTG.
Sorry, but I am old-fashioned like Ben Franklin: "neither a lender nor borrower be."
I try to pay off everything early, if I borrow at all.
And in this mkt (NorCal), I am still renting cheaply, while everybody else around me pays thru the nose for the "privilege" of living in the bank-owned, over-priced, million dollar dump. (well, except the folks who bought 15 years ago, when there were RE "bargains" after the 80's bubble burst.)
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Re: Yay! Paid off my mortgage today!
Posted by: TLB
Date: April 13, 2007 01:30PM
I really don't consider my house an investment at all. I no longer live on the coast and no longer live in an area of go-go real estate markets. In fact, my house value has dropped about 20% in the last year and in good times appreciated below inflation, about 2% a year. I live in one of the highest foreclosure areas in the country. A real estate investor's dream! Not really. You can pick up houses cheap to do a flip and it is worth 5% less than you bought it for.

If I decided to pay off my house early it would be for simple piece of mind and would yield just as much satisfaction as a great investment.

Congrats Rick-O!
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Re: Yay! Paid off my mortgage today!
Posted by: Robert M
Date: April 13, 2007 01:34PM
Sea,

I hear ya! Like you, I'd rather pay off everything each month (credit cards, etc) and continue paying off my mortgage early. Right now, I own an apartment.. At this point, I've sublet it and am letting my tenant pay my mortgage for me. In the meantime, I'm living in a reasonably priced rental. So far, the situation works very well for me. I look forward to when I no longer have the mortgage hanging over my head. That way, I can put the rental income to other use, i.e. buy another property, investments, etc.

Robert



Edited 1 time(s). Last edit at 04/13/2007 01:36PM by Robert M.
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Re: Yay! Paid off my mortgage today!
Posted by: Paul F.
Date: April 13, 2007 01:46PM
If your home in an "investment" then don't pay it off early.

If your home is a HOME, a place to LIVE... then pay it off and don't look back.


Now... that money you've been paying on a mortgage?
Start making those SAME payments to YOURSELF in the form of savings or other investments!
Small toys now are nice.. BIG toys later are better! grinning smiley



Paul F.
-----
A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
----
Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.

--

--

--
Eureka, CA
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Re: Yay! Paid off my mortgage today!
Posted by: Racer X
Date: April 13, 2007 01:47PM
Quote
Robert M
M A V I C,

You said "Sorry to say, but paying off your mortgage is one of the worst investments out there.".

Care to go into more detail? I plan to pay off my mortgage as quickly as reasonably possible for many reason. However, if paying it off and no longer having it as debt is a bad thing, then I definitely want to know why.

I realize a mortgage for some people is an inexpensive way to get money. For example, it's less expensive than carrying significant amounts of debt and paying horrible interest on a credit card. No doubt of that. But, I like to think not having the debt altogether and paying less in interest over the long-term is a good thing.

Robert

If your mortgage is at 6% and a property increases 10-15% a year, don't pay off the mortgage early on the first property, get another and make that 4-9%.

heck, even an interest only mortgage on a decent property isn't a bad deal if you hang onto it for a few years.
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Re: Yay! Paid off my mortgage today!
Posted by: Robert M
Date: April 13, 2007 01:51PM
Racer,

I like the idea except for one huge snafu... Coverying the expense of both mortgages in the event I don't have a tenant in one or both properties. That's a problem, one that I'd rather not face. It's one of the reasons I haven't purchased another proprety right now and am living in a rental.

Robert
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Re: Yay! Paid off my mortgage today!
Posted by: AllGold
Date: April 13, 2007 02:47PM
IIRC, he's in Michigan. I don't think a single house has sold the last couple years in the entire state. Obviously, that's exaggeration, but the housing market--sellers' market--is unbelievably grim in the state. Real estate "investment" in Michigan is an oxymoron right now.
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Re: Yay! Paid off my mortgage today!
Posted by: Rick-o
Date: April 13, 2007 03:10PM
Wow! Just got back and seen all of these nice (and funny) comments. Thanks!

To address some of your concerns, I have very little debt right now. Absolutely no CC debt other than what I pay off at the end of the month. My house is NOT an investment. I plan on living here for quite some time. I am retiring from my day job this Sept. with a pretty decent pension and bennies. I should call this semi-retirement, as I have mini-storage business that's doing well. (also paid off BTW). I need to expand, and I'm looking to add a 40' x 112' barn soon. I also have an adjacent property next to the storage (huge old stone schoolhouse) that I'm planning on developing. Plenty of irons in the fire and I'm really kind of burned out 'cuz it's like working two jobs. I need to step back and smell the coffee and all of that.

Oh, and let me say, I'm by no means a financial wizard. I have been plucking along for the last 20 years or so by basically winging it. Buying a bunch of AAPL pre split at $14. and some change really helped out the 'ol portfolio. That, plus a few other investments have eased my mind.

Next step after pouring some dough into the business is to look for a vac/retirement home in the Upper Peninsula of MI. Something on the water would be nice.

I've thought about the property flipping game, but I'm not really looking to become a multi millionare, I just want to be comfortable.



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Randy: What the @#$%& are you talking about?
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Re: Yay! Paid off my mortgage today!
Posted by: Seacrest
Date: April 13, 2007 03:15PM
Real Estate is not the slam dunk you all think it is.
[www.washingtonpost.com]

[www.youtube.com]

[www.speculativebubble.com]

Just sayin' is all.
//Bitter renter, yes.
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Re: Yay! Paid off my mortgage today!
Posted by: mrbigstuff
Date: April 13, 2007 03:37PM
buying RE in a slumped market is a *great* investment. people who bought homes in the $100k range around me (Boston) in the mid-90s got unbelievable deals, if you look at it in terms of flipping property. but, that was a golden time and even though their property has quintupled (or more) in value, they are still living in that location for the long term. only one of those friends has sold out. Now, if they had bought more than *one*, they would reap the benefit. the market always comes to a nadir when no one has money, now doesn't it?
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 03:55PM
Quote
AlphaDog
You know, it's not that I disagree with what you say, but I find it somewhat annoying that you are often so judgmental about the path other people choose to follow. It's obvious that you have very clear goals and objectives and a plan to meet them. I applaud that. However, one model just doesn't fit everybody. Thank goodness.

I don't think any of my comments have been overly critical.

Quote
AllGold
IIRC, he's in Michigan. I don't think a single house has sold the last couple years in the entire state. Obviously, that's exaggeration, but the housing market--sellers' market--is unbelievably grim in the state. Real estate "investment" in Michigan is an oxymoron right now.

All the more reason to take at least some of the equity and invest in a better market.

Quote
Robert M
M A V I C,

You said "Sorry to say, but paying off your mortgage is one of the worst investments out there.".

Care to go into more detail? I plan to pay off my mortgage as quickly as reasonably possible for many reason. However, if paying it off and no longer having it as debt is a bad thing, then I definitely want to know why.

I realize a mortgage for some people is an inexpensive way to get money. For example, it's less expensive than carrying significant amounts of debt and paying horrible interest on a credit card. No doubt of that. But, I like to think not having the debt altogether and paying less in interest over the long-term is a good thing.

Robert

Depends on the debt. If it's secured, unsecured, in an asset... debt in credit cards, cars... typically is not a good thing. And paying interest is only a bad then when you're not making more off of it than it costs you. Like the example I gave above, if you're paying 6% interest but that has a return of 35%, you're still coming out 29% ahead. If you don't have a lot of capital, then it's about finding the cheapest money you can and then using it to get a reasonable return.



Quote
Rick-o
My house is NOT an investment. I plan on living here for quite some time. I am retiring from my day job this Sept. with a pretty decent pension and bennies. I should call this semi-retirement, as I have mini-storage business that's doing well. (also paid off BTW). I need to expand, and I'm looking to add a 40' x 112' barn soon. I also have an adjacent property next to the storage (huge old stone schoolhouse) that I'm planning on developing. Plenty of irons in the fire and I'm really kind of burned out 'cuz it's like working two jobs. I need to step back and smell the coffee and all of that.
[...]
Next step after pouring some dough into the business is to look for a vac/retirement home in the Upper Peninsula of MI. Something on the water would be nice.
[...]
I've thought about the property flipping game[...]

Very Nice! I'm glad to hear your eggs aren't all in one basket. In your case, it seems like you're already pretty good at leveraging your resources and aren't counting on your home for a lot. I know some people who have mortgaged their home for all its worth, but created no return with the cash.

Plus the value of your home may be peanuts compared to the value of your other assets.

Btw, don't flip properties. If you know an area well enough to be successful at it, you shouldn't be spending your time flipping. There are better ways to get a return on that knowledge.




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Re: Yay! Paid off my mortgage today!
Posted by: spacescape
Date: April 13, 2007 03:56PM
I live in Michigan and we are ready to move however the market is keeping us in 1100 Square Feet for now until the Market improves. If I had more equity and more saved up I would keep my house and rent it for the next 5-10 years then buy a larger house for my family.

I was pretty depressed when I saw my property value drop but my taxes increase this year. I'm trying to remember that since I moved in in 1999 my house is still worth about $30,000 more than what I paid...

I have about $2000 in credit card debt that should be paid off by the end of summer or sooner, $22,000+ in investments (CD's, ING Savings account, etc.) and we've been talking about sending the mortgage company another $100-$200 per month against our principle. However, I'm starting to think putting $100-$200 more in our savings could be a better investment.

It's a tough market here in Michigan and I'm not sure how much longer I can stay here. The weather is cold and snowy 50% of the year the other 50% of the year involves orange barrels and cones.

I would say that if your getting ready to semi retire then good for you. I think being debt free might be the best way to go now.

Bill
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Re: Yay! Paid off my mortgage today!
Posted by: macaroo
Date: April 13, 2007 04:13PM
Living in the NE area of the County, the cost of housing is modest. My goal when I was working for a large company was to pay off my house and live in it for taxes and utilities.
My personal feelings are that in certain sections of the country the rubber band of housing costs has been stretched about as far as it can go. It has only one direction and that is downward. I feel for people caught up in situations beyond their control as in the following: [sfgate.com]
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Re: Yay! Paid off my mortgage today!
Posted by: Seacrest
Date: April 13, 2007 04:33PM
Quote
macaroo
I feel for people caught up in situations beyond their control as in the following: [sfgate.com]

I read that this morning.
I feel for those people, too, but they're part of the reason RE is beyond insane here.
Yes they'll lose their house.
They'll also learn a valuable lesson.
And $3000/mo goes pretty far in the Salinas valley rental market.

But I hope there is a special place in hell for the so-called professionals who "helped" get them into that mess.
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 04:49PM
Quote
macaroo
I feel for people caught up in situations beyond their control as in the following: [sfgate.com]

I'm not sure why you think the people in that story are caught up in a situation beyond their control. Let me preface the following by saying that the people they did business with in no way garner anything but disgust from me. Still, they signed the paperwork. Yes, they couldn't read English so they hadn't a clue what trouble they were signing up for. Ignorance isn't an excuse. Do I think what happened should be illegal? Sure. Still, if you sign a contract in a foreign language and have to rely on someone to translate for you, you had better do your research on if that person is trustworthy or not.




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Re: Yay! Paid off my mortgage today!
Posted by: Greg the dogsitter
Date: April 13, 2007 04:53PM
Quote
M A V I C
I'm not sure why you think the people in that story are caught up in a situation beyond their control. Let me preface the following by saying that the people they did business with in no way garner anything but disgust from me.

Just disgust? Not even a little weency bit of sympathy?

Edit: I'm an ass; apology below.



Edited 1 time(s). Last edit at 04/13/2007 05:02PM by Greg the dogsitter.
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Re: Yay! Paid off my mortgage today!
Posted by: Seacrest
Date: April 13, 2007 05:00PM
MAVIC is absolutely correct. (But what is this "you people" crap. I already agreed with you smiling smiley

I am no RE expert, but don't buyers' agents have a fiduciary responsibility to represent their clients' interests?

The family bears ultimate responsibility, though. When you sign your name on a piece of paper for THREE QUARTERS OF A MILLION DOLLARS, you'd better damn well know what you're getting into.
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Re: Yay! Paid off my mortgage today!
Posted by: Greg the dogsitter
Date: April 13, 2007 05:02PM
Oh, crap. My sincerest apologies; I misread what M A V I C wrote. Sorry, sorry.
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 05:22PM
Quote
Seacrest
I am no RE expert, but don't buyers' agents have a fiduciary responsibility to represent their clients' interests?

Depends on the state, I'm sure. I don't remember the exact numbers, but 90% of agents don't last more than year. That means you pretty much have a 1 in 10 chance of getting an agent that has a clue, someone who might be able to help you.

Otherwise you've got a 9 in 10 chance of getting someone about as clueless as you. As far as we know, the agent thought they were doing good.

The real issue is, the mortgage company that setup such non-standard lending... and not only that but also didn't do their due diligence in making sure the house was worth what they paid for it.




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Re: Yay! Paid off my mortgage today!
Posted by: Seacrest
Date: April 13, 2007 06:12PM
Apparently, the agent's been in the business ten years now.
My espanol is not great, and it's an image so I don't feel like running it through a translator.
[www.ranchogrande.com]

I think this is fraud, pure and simple, and certain people deserve to be prosecuted.
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Re: Yay! Paid off my mortgage today!
Posted by: Greg the dogsitter
Date: April 13, 2007 06:13PM
Yuck. Drop shadows on all text!?
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 13, 2007 06:48PM
Quote
Greg the dogsitter
Yuck. Drop shadows on all text!?

Except the parts which are HTML.

But you're not their market. The Mexican/Hispanic market likes that sort of stuff. I know a guy who does Ford ads for Mexicans... it's amazing how different their tastes are.




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Re: Yay! Paid off my mortgage today!
Posted by: Ammo
Date: April 13, 2007 08:50PM
Please forgive my complete lack of financial knowledge, but I'm not sure why home ownership is seen as a good investment. To me, an investment is a way to get more money back than what you put in.

The value of my home has doubled in the last 15 years, but unless I move to a less desirable area, the next home I buy will also have increased in price by a similar percentage. So what have I gained by owning a home?
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Re: Yay! Paid off my mortgage today!
Posted by: Webster J. Duck
Date: April 13, 2007 10:18PM
Congrats! A major milestone many of us wish we could make.

A big day indeed.
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Re: Yay! Paid off my mortgage today!
Posted by: spacescape
Date: April 13, 2007 10:32PM
Quote
Ammo
Please forgive my complete lack of financial knowledge, but I'm not sure why home ownership is seen as a good investment. To me, an investment is a way to get more money back than what you put in.

The value of my home has doubled in the last 15 years, but unless I move to a less desirable area, the next home I buy will also have increased in price by a similar percentage. So what have I gained by owning a home?

I'll second that.

However, if everything was going at the momentum that it was going. My home would be worth about $50,000-$60,000 more than what I paid. However, the economy went to hell and I probably will be lucky to get $30,000-$35,000 more than what I bought it for. But the homes I would be looking at are about going for LESS than what they would of cost me. So yes, I'm selling my home for less than expected. But the homes that we want to buy are sell for allot less than what they were. So, if we had an extra chunk of $$$$ to put down on a new home we would be making out pretty good.

Let's not forget that I live in Michigan so my new "GOOD" investment might look pretty bad if things get much worst and I am forced to leave the state.

Bill
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 14, 2007 12:22AM
Quote
Ammo
Please forgive my complete lack of financial knowledge, but I'm not sure why home ownership is seen as a good investment. To me, an investment is a way to get more money back than what you put in.

The value of my home has doubled in the last 15 years, but unless I move to a less desirable area, the next home I buy will also have increased in price by a similar percentage. So what have I gained by owning a home?

With the alternative being rent, there's no much comparison. Renting is a guaranteed loss. You also can't leverage the value of your residence if you're renting. With that leverage you can buy more properties. Some people do this, then rent those properties out, which results in passive income, and then they're not having to pay for their residence at all.

Think of it this way. Let's say you rent a house for 30 years. (To keep the math simple I'm not going to add in rent increase into this.) If you pay $1,000/mo in rent, that's $360,000. At the end you have $0.00 worth of property. Let's say you buy a $167,000 home and pay $1000/mo for a mortgage. With spacescape's example and very low appreciation, you'll own about $700,000 worth of property.

At the end of those thirty years, you can choose to rent if you like, but at least then you weren't blowing your money on rent.




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Re: Yay! Paid off my mortgage today!
Posted by: Racer X
Date: April 14, 2007 02:18AM
I know a woman that I was in Sea Scouts with. She took all her earnings from working as a Master Mariner unlimited tonnage pilots license, and invested it all in houses here in Seattle. She retires next year at 45 and will be living off of just her rental income in her own house, which is already paid off.
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Re: Yay! Paid off my mortgage today!
Posted by: macaroo
Date: April 14, 2007 08:40AM
It does not cost anything to live under a bridge. A ready supply of running water and fresh fish to eat.
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Re: Yay! Paid off my mortgage today!
Posted by: M A V I C
Date: April 14, 2007 12:38PM
Quote
macaroo
It does not cost anything to live under a bridge. A ready supply of running water and fresh fish to eat.

It costs time, which is more valuable than money.




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