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.
Tell that to the folks blm torched.
Bad idea. That was a great low rate that you should have kept.
Your home mortgage won’t be a problem with chaos.
You’ve lost a chance for catching the bottom of some stocks.
Good job. I just cashed out an old pension. Pay today’s taxes, not Biden’s.
Whatever let’s you sleep the best. Congratulations, you’re at ‘critical mass’ as Bob Brinker once said. You’ve gone with a more conservative approach and a home that is free & clear is a very good thing to have.
Cash is king.
After listening to one segment on Dave Ramsey’s show, I decided to pay mine off about 4 months ago; having the same fears about what might happen with the economy.
Be sure your lender sends you a copy of the loan payoff document. Suggest checking at your county clerk’s or whatever agency records lien releases to ensure that the mortgage payoff to your lender is recorded with the property records. I made hard copies of all documents from the time I assumed the previous owner’s mortgage through payoff in case the computer “glitches” and loses the records.
Well done!!
I probably should have added, “While it’s a great time to borrow money, it’s almost never good to be a significant net debtor.”
The best of both worlds is when you have the cash, but can borrow money at an insanely low rate. After all, you can always change your mind and pay your loan off if you don’t have alternative uses for the money.
Think I’ll go the other way - Overleverage my house and spend $250k on ammo - Come and take it.
Tell that to the folks blm torched.
——————————————
Those folks chose poorly. With rare rare exception, they get no sympathy from me.
If you are worried about the banks though another question might be do you keep your gold/silver in a safe deposit box at the bank or move it home where it is accessible?
I paid off my house years ago. You will love the peace of mind you have knowing the house is yours. Of coarse you have to worry about paying property tax and insurance, but I think you made a smart move. If Trump stays in office you could always refinance, but if Biden gets in your 401k will likely be confiscated anyway.
I think you were smart....maybe should have waited until January but smart anyway
“Cash is king.”
Ever heard of Venezuela?
Divorced 2005 got the crummy paid off house started buying cheap houses for cash make about 5k a month plus gov pension and worried sick over prospects the rats have in mind
“As along as there are Property taxes, you never really “own” your Home.”
Effectively, you rent it from the state and local government. And to think that when I was a kid they would teach that this was the BIG difference between the US and USSR. With property taxes exceeding 3% in some areas, it’s rent.
Congrats. Paid off home will smell like new.
We paid off our mortgage on two homes 3 years ago when hubby retired. Took a tax hit, but long term better off in the end.
I wlways think - what price piece of mind? Our knowledge that our properties are free and clear offset the taxes we paid.
It’s a personal decision.
Congratulations! It is a great feeling!
cash is trash. there is de facto if not official devaluation coming, and when it does cash will instantly be worth 10-15 % less than the day before.
YeahIdonnoMan.
40-some percent return on my market investments this year versus my 3.6% APR mortgage. Sure, I need to refinance but still... The math.
Good for you. I am debt free except for the house and have been thinking about paying it off, but I wish to move further away from a large marxist run city.
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