Posted on 12/16/2020 5:30:44 PM PST by SteveH
i paid off my home mortgage yesterday.
(it was a really good refinance rate, but whatever.)
to do it, i liquidated some rollover stock (SPY) (i am retirement age, so it gets taxed as regular income, i believe).
then i did a bank transfer from my broker to a local bank.
finally, the local bank ,happened to hold the mortage, so i simply paid the full mortgage owed amount as of yesterday from my checking account to my mortgage account.
it still has not registered today, but i am not expecting a problem since i have a receipt that shows the internal transfer of the full amount as determined by a visit to the bank office immediately prior to the transfer (the amount evidently changes every day due to compound interest).
otherwise, the mortgage would have taken about 8 more years to pay off at the normally scheduled rate of payoff.
i need to take out about 33+% + 11+% extra money out of the IRA for federal and state taxes. this bumps me up two IRS tax brackets for this year.
in return, however, i get some peace of mind knowing that at least i own my home free and clear if anything serious should start to happen and interfere with ordinary commercial transactions (i have some conjectures about worst case scenarios which i won't go into in this post-- perhaps everyone does) (i have not spoken with any of my neighbors, most of whom are suburbanites who keep to themselves and if i am to believe voting records are somewhat liberal, with many newly arrived middle class professional immigrants from asia).
ok... good, bad, ugly? one person on FR said earlier not to do this. however, i am just too nervous.
along the way, i had an unsettling experience. i am already used to less bank branch offices being open, and those that are, with reduced hours and reduced customer occupancy.
however, last friday at 3:30 PM i was on the freeway listening to the radio and heard the USSC news. so i tried effecting a wire transfer over cell phone. the first attempt, the line went dead, and the second attempt, the wait time increased from 5 minutes to 25 minutes. i thought this was strange since i had been promised over the phone the previous day that this would be a snap to perform over the phone. after driving a couple of exits, i turned around and went back to my brokerage to perform a wire transfer to my local bank in preparation for the mortage payoff.
the brokerage local office appeared deserted, with only two cars in the parking lot. in fact it was open, but there was only one person present, only one desk and only one working monitor in the entire office, which was only dimly lit. a teller appeared on the monitor screen. i was told that no one could help me at that time and that i should try using the phone. they also had a drop box but i had no papers to fill out and there did not seem to be a printer there. i felt nervous and frustrated, and left immediately. later i heard that the brokerage employees were in fact working from home.
the situation was more normal at my usual bank, but the brokerage seemed to me to be a harbinger of a lowered level of service that might be given at the banks if things progress far enough with the bug.
anyways, the entire process took me about 5 business days not including a day or two of investigating different options of proceeding. i could probably have reduced this to three days if i went at a fast pace, and maybe shaved off another day off of that if i had known exactly what to do and when, and let it be the one and only priority for those two business days.
We paid cash for our home 10 years ago and I thank the lord we did.
For the love of God interest rates are at historic lows. Where will they go hay ho?
Being debt-free is always satisfying. Yet it will make no difference to the rich or to the poor when the US becomes no better than Venezuela.
Buy and hold real estate.
I’m in pretty good shape, but here I am nearly 69 and going into my wonder years with ole Joe at the helm. He will damage or ruin millions.
Congrats... I paid my last house off then sold it to pay cash for the retirement home.
Great feeling!
Good for you. I found Dave Ramsey years ago and have been debt free since. It’s a wonderful feeling.
“...in return, however, i get some peace of mind knowing that at least i own my home free and clear if anything serious should start to happen and interfere with ordinary commercial transactions...”
**********************************************************
There’s a lot to be said about the benefits of “peace of mind”. Congratulations on being free & clear... I envy that.
Just make sure you can keep up the taxes and insurance when they come due now. I’ve know folks who did this and then did not prepare for the quarterly hit every three months.
There is nothing wrong with paying off your mortgage. Don’t sweat it. )And it’s already done...so get a bottle of champagne and celebrate.)
Tax rates may not be at historic lows but they are lower then they're likely to be in coming years. I took a big chunk out of my retirement accounts when Trump tax cuts dropped the top rate to 25%.
ML/NJ
I understand the desire to own “free and clear.” But, interest rates are at all time lows, at or less than inflation rates, so I don’t see the risk to you, especially if you can find above-mortgage rate returns for the cash you have. So, while one should always pay off high-interest-rate debt like credit cards, its best to hang onto low-interest rate loans.
It’s a great time to be a debtor.
Maybe the intent was supposed to Be mortgage rates at historic lows.
I fully expect the stock markets to drop quite a bit after a few months under Biden/Harris. Various forces will try and keep it propped up, but with personal and country bills coming due, I can see a lot of these assets being sold off in order to keep a small business from going under and/or to keep from defaulting on home loans.
“We paid cash for our home 10 years ago and I thank the lord we did.”
During that time my stocks have been providing 3% dividends each year while the stocks have more than doubled.
The dividends are qualified due to having held the stocks over a year so have special low/zero tax rates.
Till recently the mortgage interest was deductible.
What was there to be nervous about? You had a fixed rate mortgage. The bank had slight risk that you may not pay it, but what risk were you taking by holding it?
It’s like highway robbery lol.
As along as there are Property taxes, you never really “own” your Home.
You are just “allowed” to live there as long as you pay your Taxes to the King.
“Also, for anyone sitting on a ton of cash and next to 0% interest rates, what else are you going to do?”
Buy good stocks when they drop per your prediction.
Talk about nervous, we purchased a smaller home and were trying to get moved out asap.
Redo flooring and paint - hoping to hit the market here in NC while it lasts.
Know the feeling. 69 now. And just paid my house off this month. Thinking about pulling money from my 401 next year to pay off my car.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.