reduced cash flow, more of your net worth locked in illiquid asset, foregoing tax write offs, foregoing leveraged returns, lost passive income, opportunity cost of capital, loss of access to a bank account with higher interest than a savings account, increased risk if you were to lose your job/income
My wife and I paid off our mortgage in the first four years of our marriage. It allowed my wife to stay home with the kids and has been a huge source of peace in our lives. We also invested 25% of our income into retirement at the time. We still enjoyed our lives over that four year period, we just had to be more creative to have fun on the cheap. Lots of my friends thought we were nuts at the time, but now (15 years later) they see the benefits. In hindsight I am so glad we made the sacrifices early.
My wife and I are a few months away (July or August) from paying off a 455K mortgate in California. It feels like time is slowing down right now and we can't wait to get to the finish line!!
@In Your Empty Skull paid 528k, now worth 600k. Neighbor sold his house for 650k in 7 days. In Denver :) $250k per year and no bills, think i'll sleep better at night w/ no mortgage. Not selling anytime soon.
@@Corpsecreate Don't get me wrong... Having a lot of money can buy you freedom and happiness. Also, reducing your amount of responsibilities and obligations can have a similar effect. That's why I love mortgage freedom.
@@MarriageKidsandMoney Hi. I dont understand what you mean at all. If you have more money, you are still better off in every aspect. In what way is having 0 debt and 100k in investments better than being 400k in debt and 900k in investments? The mortgage repayments would be almost entirely covered by dividend returns, and if you felt like it, you could always pay off the 400k debt any time you want and still have 500k in investments, which is better than the alternative. More $ is always more freedom...no?
@@Corpsecreate Not in my opinion personally. I find more freedom in fewer obligations and commitments. I'm not saying you're wrong. It just means your mindset isn't my mindset. But I believe the real issue at hand here is the "pay off your mortgage OR invest" debate. I don't think it should be an "OR" ... I think it should be both "invest AND pay off your mortgage" to the best of your ability. Our family paid off our mortgage and invested for our comfortable retirement. We'll now have both.
I am 42 years old married with two kids I paid off already two houses. And I am in my third house . Hopefully by next year might pay it off. It's the best thing ever paying off your mortgage . (Dump money on principal Beet the Bank )
Enjoy your content and insights. Battling now whether to pay off mortgage fast or continue to invest. Thinking more along the line of blending the two. We have achieved COAST FIRE to retire in early 50’s (now 40) Your content encourages us to lean more towards knocking the mortgage out fast.
Wow! You are doing an incredible job for your family’s future. Mortgage freedom opens up options even further but you can’t go wrong with investing either. You are winning either way
Couldn't agree more. The cons, so to speak of a paid off mortgage are not really cons at all depending on where you are in your personal financial journey. Peace of mind is a wonderful thing that has no monetary value yet worth almost anything. Now add to that, supercharging what your salary can do minus the mortgage. Awesome content.
We have $45000 /12 years at 5.5 % left on our fha mortgage.Looking to pay off in 2027 rather than 2033. Paying an extra $50 a month to principle. Planning to use my bonus to help pay on the principle along with some tax money. We don't make much a year but we are debt free but our house.
I'm torn between overpaying and investing. The fear is the investment will go negative while the mortgage is guaranteed to go. However if I lose my job the bank won't care I over paid. So it's still risky
Maybe a bit of both then? It worked for us! We're mortgage-free millionaires after doing that plan for 10 years: ua-cam.com/video/agZKjNKq1zs/v-deo.htmlsi=G3cDJGr9KVqxITWu
Last year, I told my financial advisor that we were going to accelerate paying off our $900K mortgage in 5 years. He told me that wasn't smart said, "I wish you could get a 50 year mortgage!" I fired him a few days later. Today, the balance is $735K. But, I'll admit, I sometimes second guess myself.
It’s a tough decision. I truly believe there is no right answer. I’m glad you’re not working with someone who doesn’t align with your values. They need to “get you”
Should I pay off a mortgage of a house that has HOA payments?? Is it worth it? What give me peace is that the HOA is $250 a month and our roof was just replaced by the HOA brand new. We’ve been living here for 2 years. I guess I can see that fee as a maintenance fee. Thoughts?
I would total up your mortgage interest and principal payments each month. Depending on where you live this could $1,000-$2,000 each month. Ask yourself, “what would I do with an extra $12,000-$24,000 per year in my life?” If the answer gets you excited, it might be worth it!
I wonder if there is a compromise to both sides here: use a sinking fund in a high yield savings account and once you have saved enough, lump sum pay off mortgage. This way you are earning higher interest and you have the liquidity in case of an emergency. Win win?
I think you should do a blend of savings/investments with cutting the mortgage down by many years or monthly amounts by a profitable refinance that saves money overall taking into account what you paid already and of course prepaying it. In much time the mortgage will seem very small. I don’t think you should pay it off without saving.
Completely agree... I like these steps before paying off your mortgage. 1. Eliminate high-interest debt 2. Take advantage of workplace matches 3. Save 3-12 months of expenses (you decide the number that feels right for your situation) 4. Invest in your Roth IRA and HSA 5. Achieve Coast FIRE 6. Then pay down the mortgage
@@MarriageKidsandMoney what is Coast FIRE? Unfortunately I purchased a new home around $475k in 2019 at about 3.9% interest. I also have a son that I pay most of his college tuition and he is in his freshman year. I feel once I save enough money to pay the rest of his years in college, I want to pay extra towards my mortgage to at least not pay PMI and then work slowly to pay off my mortgage in the next 10 years, and I will be 65 year old a this time. This is all OK as long as I have a job, what do you suggest?
I'm 32 and we've paid half our mortgage. We have a fixed interest rate until 2025 so there's no advantage to paying it down extra. With the current market I can get more money from a regular savings account. That's because we have a fixed rate though. In 2025 interest rates may be high enough to warrant paying down the rest of it. While I'm not in as much of a hurry to be debt free as some people it is still important to keep your debt levels low as well as restricting debt to only really inexpensive kinds of debt.
One disadvantage: By taking and paying off a mortgage you can buy much more then by paying with what you would have saved up. Therefore prices of housing go up. Therefore mortgages become necessary. Therefore your kids are stuck with them, and their prices will be higher than yours. Therefore you are contributing to a wage slavery. You are hurting your children and their children, you are building a class of untouchables in the boards of banks, you are empowering banks, as a private business, do decide who is worthy of having kids and who is not. I am not saying I know a way out of this mess now that houses are unaffordable otherwise. I am guilty too, having paid off my last payment today.
House prices will continue to rise. That’s why we’re investing now for our kids to buy their first home in 20 years. It’s incumbent on us to invest because home prices are only going up over the coming decades.
Q. How much does your home equity earn per year? A. 0%. Mortgage or no mortgage, you still need cash flow in Retirement. Home equity provides no cash flow. Investments provide cash flow.
@@midkort Except, the money used to pay off a mortgage will never earn a dime. It will never generate cash flow. Fewer bills is great. But with less money invested, you'll have less cash flow.
That I can get behind, depending on how long it's going to take to pay off your mortgage. For a 24 year old planning to be mortgage free in 4 years, I would probably still pay off the mortgage first.
What do you see as the disadvantages of paying off your mortgage?
reduced cash flow, more of your net worth locked in illiquid asset, foregoing tax write offs, foregoing leveraged returns, lost passive income, opportunity cost of capital, loss of access to a bank account with higher interest than a savings account, increased risk if you were to lose your job/income
@@Corpsecreate Definitely good things to consider Sam! It definitely limits your use of that "cash" for other uses.
Just paid off my mortgage yesterday. No feeling like it!!!
That’s incredible Todd!! Congratulations!
That is awesome!! Congratulations!!
My wife and I paid off our mortgage in the first four years of our marriage. It allowed my wife to stay home with the kids and has been a huge source of peace in our lives. We also invested 25% of our income into retirement at the time. We still enjoyed our lives over that four year period, we just had to be more creative to have fun on the cheap. Lots of my friends thought we were nuts at the time, but now (15 years later) they see the benefits. In hindsight I am so glad we made the sacrifices early.
That's incredible! Short-term sacrifice for long-term enjoyment. It pays!
Paid off my house yesterday.
Incredible Michael! Way to go!!
I got my mortgage paid off in January. I am so happy it is paid off!! Great video :)
Way to go Robert! You must be feeling that “Pro #1”!
My wife and I are a few months away (July or August) from paying off a 455K mortgate in California. It feels like time is slowing down right now and we can't wait to get to the finish line!!
Incredible!! That’s a HUGE mortgage to clobber. Way to go!!
i paid off my personal house and its great. My 2nd house i owe $12,000 and it cant get paid off soon enough
@@caroleades6918 Two homes free and clear?! Those are some life goals right there
@@MarriageKidsandMoney I own 4 houses and owe $ 12,000 but all 4 of mine cost $ 400,000 total and I'm 45 years old
@@caroleades6918 WOW! Great work Carol! That peace of mind must feel wonderful.
totally agree. Max out 2x 401ks and 2x IRAs, while paying mortgage off. Only 65K left and house worth $650K, 44 y/o. 1.1M in retirement
Wow! You are set for retirement.
At what point will you slow down on retirement investments or does a bigger nest egg feel awesome to you?
@@MarriageKidsandMoney won't slow down. Rather have too much and leave my 2 kids than not enough. Want to retire at either 59 or 62
@In Your Empty Skull paid 528k, now worth 600k. Neighbor sold his house for 650k in 7 days. In Denver :) $250k per year and no bills, think i'll sleep better at night w/ no mortgage. Not selling anytime soon.
@@teddyruxpin7876 Congrats on a job well done and you make great money!!
Financial freedom is more important for me than having tons of money.
I’m with you Maria.
Having more money is financial freedom...isn't it? I don't understand why people act like they are different things.
@@Corpsecreate Don't get me wrong... Having a lot of money can buy you freedom and happiness. Also, reducing your amount of responsibilities and obligations can have a similar effect.
That's why I love mortgage freedom.
@@MarriageKidsandMoney Hi. I dont understand what you mean at all. If you have more money, you are still better off in every aspect.
In what way is having 0 debt and 100k in investments better than being 400k in debt and 900k in investments? The mortgage repayments would be almost entirely covered by dividend returns, and if you felt like it, you could always pay off the 400k debt any time you want and still have 500k in investments, which is better than the alternative. More $ is always more freedom...no?
@@Corpsecreate Not in my opinion personally. I find more freedom in fewer obligations and commitments.
I'm not saying you're wrong. It just means your mindset isn't my mindset.
But I believe the real issue at hand here is the "pay off your mortgage OR invest" debate.
I don't think it should be an "OR" ... I think it should be both "invest AND pay off your mortgage" to the best of your ability.
Our family paid off our mortgage and invested for our comfortable retirement. We'll now have both.
I am 42 years old married with two kids I paid off already two houses. And I am in my third house . Hopefully by next year might pay it off. It's the best thing ever paying off your mortgage . (Dump money on principal
Beet the Bank )
That’s incredible Jose!
Are these rental properties or extra homes for travel?
We paid off our mortgage and we love it. We invested early and regularly. So we love the freedom.
It’s a wonderful feeling!
Enjoy your content and insights. Battling now whether to pay off mortgage fast or continue to invest. Thinking more along the line of blending the two. We have achieved COAST FIRE to retire in early 50’s (now 40)
Your content encourages us to lean more towards knocking the mortgage out fast.
Wow! You are doing an incredible job for your family’s future.
Mortgage freedom opens up options even further but you can’t go wrong with investing either.
You are winning either way
Couldn't agree more. The cons, so to speak of a paid off mortgage are not really cons at all depending on where you are in your personal financial journey. Peace of mind is a wonderful thing that has no monetary value yet worth almost anything. Now add to that, supercharging what your salary can do minus the mortgage. Awesome content.
Peace of mind is hard to measure so it can get ignored, but I’ve found it to be the best thing money can buy.
Currently down to 459k of a 655k mortgage. Only been here a year!
Incredible!! You’re on fire!!
What’s your goal timeline?
We have $45000 /12 years at 5.5 % left on our fha mortgage.Looking to pay off in 2027 rather than 2033. Paying an extra $50 a month to principle. Planning to use my bonus to help pay on the principle along with some tax money. We don't make much a year but we are debt free but our house.
Sounds like a great plan Amanda! Slow and steady wins the race. Good luck!
Made my final mortgage payment this month! I paid it off by using the stock market.
Incredible!
Happy mortgage freedom to you B P!
I'm torn between overpaying and investing. The fear is the investment will go negative while the mortgage is guaranteed to go. However if I lose my job the bank won't care I over paid. So it's still risky
Maybe a bit of both then? It worked for us!
We're mortgage-free millionaires after doing that plan for 10 years: ua-cam.com/video/agZKjNKq1zs/v-deo.htmlsi=G3cDJGr9KVqxITWu
Last year, I told my financial advisor that we were going to accelerate paying off our $900K mortgage in 5 years. He told me that wasn't smart said, "I wish you could get a 50 year mortgage!" I fired him a few days later. Today, the balance is $735K. But, I'll admit, I sometimes second guess myself.
It’s a tough decision. I truly believe there is no right answer.
I’m glad you’re not working with someone who doesn’t align with your values. They need to “get you”
Thank you for your video. You have a new subscriber. I'm all about being comfortable. God bless you 🙏🏾
Thank you so much for subscribing!
Should I pay off a mortgage of a house that has HOA payments?? Is it worth it? What give me peace is that the HOA is $250 a month and our roof was just replaced by the HOA brand new. We’ve been living here for 2 years. I guess I can see that fee as a maintenance fee. Thoughts?
I would total up your mortgage interest and principal payments each month. Depending on where you live this could $1,000-$2,000 each month.
Ask yourself, “what would I do with an extra $12,000-$24,000 per year in my life?”
If the answer gets you excited, it might be worth it!
Great video. I liked the pros vs cons approach.
Thank you! Maybe I'll do more like this :)
I wonder if there is a compromise to both sides here: use a sinking fund in a high yield savings account and once you have saved enough, lump sum pay off mortgage. This way you are earning higher interest and you have the liquidity in case of an emergency. Win win?
I like that idea a lot!
Especially with the way high-yield savings accounts are paying out right now.
I think you should do a blend of savings/investments with cutting the mortgage down by many years or monthly amounts by a profitable refinance that saves money overall taking into account what you paid already and of course prepaying it. In much time the mortgage will seem very small. I don’t think you should pay it off without saving.
Completely agree... I like these steps before paying off your mortgage.
1. Eliminate high-interest debt
2. Take advantage of workplace matches
3. Save 3-12 months of expenses (you decide the number that feels right for your situation)
4. Invest in your Roth IRA and HSA
5. Achieve Coast FIRE
6. Then pay down the mortgage
@@MarriageKidsandMoney what is Coast FIRE? Unfortunately I purchased a new home around $475k in 2019 at about 3.9% interest. I also have a son that I pay most of his college tuition and he is in his freshman year. I feel once I save enough money to pay the rest of his years in college, I want to pay extra towards my mortgage to at least not pay PMI and then work slowly to pay off my mortgage in the next 10 years, and I will be 65 year old a this time. This is all OK as long as I have a job, what do you suggest?
I'm 32 and we've paid half our mortgage. We have a fixed interest rate until 2025 so there's no advantage to paying it down extra. With the current market I can get more money from a regular savings account. That's because we have a fixed rate though. In 2025 interest rates may be high enough to warrant paying down the rest of it. While I'm not in as much of a hurry to be debt free as some people it is still important to keep your debt levels low as well as restricting debt to only really inexpensive kinds of debt.
Thank you
Happy to help!
Another con of paying off your mortgage: you could have played and won the lottery with the extra principle payments.
The tax write-off went away for most people when standard deduction is now $24000 per married couple.
Great point! If you go with the standard deduction, the mortgage tax deduction is a moot point.
@@MarriageKidsandMoney You recommend itemizing instead?
older homeowners retired /like my self I would love to pay off my mortgage before my 100 birthday
How many years do you have left on your current mortgage?
One disadvantage: By taking and paying off a mortgage you can buy much more then by paying with what you would have saved up. Therefore prices of housing go up. Therefore mortgages become necessary. Therefore your kids are stuck with them, and their prices will be higher than yours. Therefore you are contributing to a wage slavery. You are hurting your children and their children, you are building a class of untouchables in the boards of banks, you are empowering banks, as a private business, do decide who is worthy of having kids and who is not.
I am not saying I know a way out of this mess now that houses are unaffordable otherwise. I am guilty too, having paid off my last payment today.
House prices will continue to rise.
That’s why we’re investing now for our kids to buy their first home in 20 years.
It’s incumbent on us to invest because home prices are only going up over the coming decades.
Standard deduction takes away the tax benefit
Spot on! ua-cam.com/video/U5JAGni3nA4/v-deo.htmlsi=j8z6n1M-tNSjPQ92
You know... This guy sounds a little like Owen Wilson 😁
Not the first time I've heard that! I'll take it!
I dont see disadvantages at all, you mention emotional feeling thats the most important thing.
Agreed! It's hard to deny for sure.
Q. How much does your home equity earn per year? A. 0%. Mortgage or no mortgage, you still need cash flow in Retirement. Home equity provides no cash flow. Investments provide cash flow.
I 100% agree.
I’m a fan of investing AND paying off your mortgage early.
Youll have tons of extra cash if you no longer have to pay a mortgage
And with no mortgage, you have a lot more money to invest to get MORE of that retirement cash flow.
@@midkort Except, the money used to pay off a mortgage will never earn a dime. It will never generate cash flow. Fewer bills is great. But with less money invested, you'll have less cash flow.
@@midkort The fact is, with no mortgage, you actually have LESS money to invest, because you have "dead money" tied up in home equity.
This is a good problem to have 😂
Absolutely!
Achieve coast FIRE first. Then pay off your mortgage.
This is a smart strategy. I like it.
I need to do a Coast FIRE video.
That I can get behind, depending on how long it's going to take to pay off your mortgage.
For a 24 year old planning to be mortgage free in 4 years, I would probably still pay off the mortgage first.