Paying off Home mortgage, partner doubts?

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OneWorld111
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Paying off Home mortgage, partner doubts?

Post by OneWorld111 » Sun Nov 12, 2017 12:20 am

Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?

I do plan to inform her after few months .. Her reasons 1) everyone has a mortgage, 2) you can get more RoR on other investments (mortgage is 3% with 10 yrs remaining), 3) can save as down payment for bigger house, 4) we wanted to rent this house (once we buy a bigger house next year or so, I have saved enough for down payment), etc..

Maxing out on all of the regular 401 (K), IRA, etc. I can of course invest more in 529 plans but with the market at all time high not sure should be putting more in there.

Any and all wisdom welcome..

OneWorld

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Silly Wabbit
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Re: Paying off Home mortgage, partner doubts?

Post by Silly Wabbit » Sun Nov 12, 2017 12:47 am

Yes, transparent finances are important.

Are you both aligned on future goals? Saving for a future down payment is an important goal. Pouring the money into the existing mortgage seems misaligned with that goal. Sure, you could do a cash out refinance, but that's extra friction.

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FiveK
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Re: Paying off Home mortgage, partner doubts?

Post by FiveK » Sun Nov 12, 2017 3:46 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Would a typical BH homeowner inform wife that you will be paying off mortgage?
You will inform her that you are doing something to which she has very reasonable objections?

Looks to be a good recipe for becoming a typical divorced former homeowner. ;)

Ok, maybe not that severe an outcome, but depending on your asset allocation, tax rate, and amount of itemized deductions, her point #2 may be valid. And then there are points 3 and 4 of her reasons as well (I'll give you that point #1 isn't a good reason).

mouses
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Re: Paying off Home mortgage, partner doubts?

Post by mouses » Sun Nov 12, 2017 5:04 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?
The insight this board gives me into some people's marriages makes me glad I am not married.

retiredjg
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Re: Paying off Home mortgage, partner doubts?

Post by retiredjg » Sun Nov 12, 2017 6:10 am

If you wish to pay it off and she does not, the more reasonable choice would be somewhere in the middle.

DarthSage
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Re: Paying off Home mortgage, partner doubts?

Post by DarthSage » Sun Nov 12, 2017 7:11 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?

I do plan to inform her after few months .. Her reasons 1) everyone has a mortgage, 2) you can get more RoR on other investments (mortgage is 3% with 10 yrs remaining), 3) can save as down payment for bigger house, 4) we wanted to rent this house (once we buy a bigger house next year or so, I have saved enough for down payment), etc..

Maxing out on all of the regular 401 (K), IRA, etc. I can of course invest more in 529 plans but with the market at all time high not sure should be putting more in there.

Any and all wisdom welcome..

OneWorld
What???? Think about that underlined statement. You and your wife are, presumably, in a marriage so that you can work together towards common goals. Do you feel that you are equal partners who both have valid input into financial decisions? How would you feel it she informed you that she bought a Mercedes last week?

Beyond the lack of communication and common goals--your wife makes some good points. I agree, having a mortgage because "everyone else is doing it" isn't valid. But her other points make sense to me. Your mortgage is at a low interest rate. If you anticipate future investments that could use that money, paying off your mortgage right now doesn't make sense.

You two need to talk about this further. If you do pay off the mortgage, where will you get the money for the second house you hope to purchase? Is your concern about holding two mortgages next year? You two need to be on the same page.

aqan
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Re: Paying off Home mortgage, partner doubts?

Post by aqan » Sun Nov 12, 2017 7:59 am

I’d certainly tell her especially because she already has an opinion about it.
You should both discuss and decide the course of action.
BTW I kinda agree with her. There’s no point paying down a 3% mortgage. After tax savings it probably costs you 2 and change. Better off investing or putting your money in a CD.

aqan
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Re: Paying off Home mortgage, partner doubts?

Post by aqan » Sun Nov 12, 2017 8:05 am

mouses wrote:
Sun Nov 12, 2017 5:04 am
OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?
The insight this board gives me into some people's marriages makes me glad I am not married.
Life is full of problems my friend. Married or not you will find yourself dealing with issues, disagreements. Could be wife, brother, sister, parents, friends, neighbors or bosses. Unless you’re ready to donate your wealth and move to Tibet. Even that may not be conflict free:(

Traveller
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Re: Paying off Home mortgage, partner doubts?

Post by Traveller » Sun Nov 12, 2017 8:19 am

I am a fan of paying off mortgages.

But, I am a much bigger fan of openness, consideration, respect, and communication in marriage.

Talk it out in advance and find a plan you both can get behind.

Dottie57
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Re: Paying off Home mortgage, partner doubts?

Post by Dottie57 » Sun Nov 12, 2017 8:23 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?

I do plan to inform her after few months .. Her reasons 1) everyone has a mortgage, 2) you can get more RoR on other investments (mortgage is 3% with 10 yrs remaining), 3) can save as down payment for bigger house, 4) we wanted to rent this house (once we buy a bigger house next year or so, I have saved enough for down payment), etc..

Maxing out on all of the regular 401 (K), IRA, etc. I can of course invest more in 529 plans but with the market at all time high not sure should be putting more in there.

Any and all wisdom welcome..

OneWorld
Do you really want to breed distrust? Discuss with her.

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Tamarind
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Re: Paying off Home mortgage, partner doubts?

Post by Tamarind » Sun Nov 12, 2017 8:30 am

I'm assuming that it's her house too? Why would you do something with someone else's property without their agreement?

OP, you need to address your attitude towards your wife if you want to remain married.

Personally I think she's right, and your discounting of the value of investing that money instead sounds like market timing. But more important is that you two act based on a shared plan that you arrive at together, even if that's not the plan you personally would make.

ETA: If you are so convinced a crash is coming, and you have maxed your tax advantaged accounts, put the excess into a taxable account so you can tax loss harvest.

RudyS
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Re: Paying off Home mortgage, partner doubts?

Post by RudyS » Sun Nov 12, 2017 8:42 am

You don't need to INFORM her. You need to DISCUSS it with her. Before the fact. All the rest is details on which you are getting decent advice. This is coming from someone who has been happily married for 56 years (to same DW).

phisher4
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Re: Paying off Home mortgage, partner doubts?

Post by phisher4 » Sun Nov 12, 2017 9:06 am

Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.

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HueyLD
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Re: Paying off Home mortgage, partner doubts?

Post by HueyLD » Sun Nov 12, 2017 9:07 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?

I do plan to inform her after few months .. Her reasons 1) everyone has a mortgage, 2) you can get more RoR on other investments (mortgage is 3% with 10 yrs remaining), 3) can save as down payment for bigger house, 4) we wanted to rent this house (once we buy a bigger house next year or so, I have saved enough for down payment.
Did your wife inform you that she bought a top of the line Tiffany diamond necklace and a Lamborghini a few months after the purchases?

Her reasons on mortgage payoff are very rational and your attitude toward the love of your life needs adjustment.

Best wishes to both of you for a long and happy marriage.

Maya1234
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Re: Paying off Home mortgage, partner doubts?

Post by Maya1234 » Sun Nov 12, 2017 9:23 am

Well this atypical, I guess, Boglehead does not have a wife because I have a husband. In any event, there shouldn't really be anything to "tell." It should be discussed in advance and come to a joint decision.

I happen to disagree with your wife. I think the question whether you'd borrow money to invest at this rate is a good one and I would most definitely not. We paid off our mortgage this year and I have to say it's really been a nice feeling.

rob65
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Re: Paying off Home mortgage, partner doubts?

Post by rob65 » Sun Nov 12, 2017 9:30 am

Oh boy, where to start?

Discuss, don’t tell.

Some big financial decisions require two yes votes in a marriage and this is one of them.

Have you run your taxes without the mortgage interest? She might be right about return on investment, particularly after taxes.

rob65
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Re: Paying off Home mortgage, partner doubts?

Post by rob65 » Sun Nov 12, 2017 9:51 am

phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
Most of us, myself included, wouldn’t borrow money at 3% and invest it, but that is due to risk aversion. The purely financial answer is that if you can borrow money at 3%, with the interest tax deductible, and you have a long time horizon, then you will probably come out better in the long run by staying fully leveraged. It’s the “probably” that holds most of us back.

Edit: Just to be clear, I’m not advocating taking out margin loans or anything like that and I’d personally vote to pay off the house. Just trying to point out that the OP’s wife has a valid argument about investing vs paying off the house.
Last edited by rob65 on Sun Nov 12, 2017 10:06 am, edited 1 time in total.

goingup
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Re: Paying off Home mortgage, partner doubts?

Post by goingup » Sun Nov 12, 2017 10:01 am

OP-
You know the answer to this question.

Jack FFR1846
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Re: Paying off Home mortgage, partner doubts?

Post by Jack FFR1846 » Sun Nov 12, 2017 10:31 am

This is a big gray area question. I can understand unreasonable financial thoughts. My wife believes that we would not have enough to retire if we had saved $100B (one hundred billion dollars). I've asked her. More than once. So I'm sorry, but I'm not going to save more than $100B and ask again.

But paying off the mortgage vs investing is more of a degree rather than some unreasonable assumption. While I paid off my mortgage long ago (with the wife very much supporting this) we were very investment averse at the time so the alternative was a credit union money market account.

Would she agree to some small extra paid towards the mortgage every month? $100? $10? $1.95?
Bogle: Smart Beta is stupid

Fire2030
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Re: Paying off Home mortgage, partner doubts?

Post by Fire2030 » Sun Nov 12, 2017 10:48 am

I wish my wife will be open to such discussions :happy

I have been debating this question for a while too and the following helped me decide.

1. Keep 1 yrs worth of expenses in cash or equivalent
2. What % of net worth will be tied up in real estate once mortgage is paid off?
3. What will be the investable assets ( taxable account) vs real estate once paid of ?
4. Save 160K per kid in 2017 $$. No more contributions after that.
4. Most important , why do you want to pay off the mortgage ? For me it is sleep well at night but it isn't keeping me awake.

My goal is to keep real estate to less than 20% of total net worth and less than 30% of taxable assets.

My age 41...

You will need to evaluate your situation and work with your spouse to come to an agreement. Good luck and be glad your partner I involved :sharebeer

stan1
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Re: Paying off Home mortgage, partner doubts?

Post by stan1 » Sun Nov 12, 2017 11:23 am

If you are planning to buy a new home in the next year or two I'd say your wife is right. If you are planning to keep the current house as a rental how will you fund the down payment, move in costs, and updating costs of the new house that aren't part of a mortgage? Perhaps you have hundreds of thousands of dollars in a savings account to do this since you haven't given us $ amounts. If you have the cash you can always decide to pay either mortgage down later after the new house is purchased. Once new house is purchased make a decision together on what to do next.

I think you know the answer on this one .... talk to your wife not anonymous people on the internet!

sixty40
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Re: Paying off Home mortgage, partner doubts?

Post by sixty40 » Sun Nov 12, 2017 11:39 am

OneWorld111 wrote:
Sun Nov 12, 2017 12:20 am
Kind of weird question..

Would a typical BH homeowner inform wife that you will be paying off mortgage?
I believe I paid off our mortgage w/o actually telling my wife, its been a few yrs. We had discussed my desire to pay it off early and she seemed fine with it and "trusts" my judgement in this area. I would pay off chunks of our mortgage (w/o telling her) as I got bonuses as the yrs went by, and for the final +/-$25k I just paid it off w/o much fanfare. I think I told her after everything was finalized with the mortgage company and the county tax collector or assessors office.

It was fine for my situation. If my wife had an opinion on it I would tell her about my plans prior to paying it off. I think your situation is unique to you and how you feel your wife will react one way or another. Decisions, decisions, ...

DrGoogle2017
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Re: Paying off Home mortgage, partner doubts?

Post by DrGoogle2017 » Sun Nov 12, 2017 11:52 am

If you plan to rent it out, it’s best to keep the mortgage. But I’m nervous of the 50% SWR by your decision. It won’t work in my household. Good luck!

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whodidntante
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Re: Paying off Home mortgage, partner doubts?

Post by whodidntante » Sun Nov 12, 2017 11:55 am

Your plan is to pay off this mortgage then buy a bigger house with a mortgage? That doesn't make sense to me.

OneWorld111
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Re: Paying off Home mortgage, partner doubts?

Post by OneWorld111 » Sun Nov 12, 2017 3:41 pm

Whoa thanks for the wisdom. Appreciate all the advice.

Some more information.
I do have enough money for the bigger house (down payment, etc..) if its happens in 6-9 months. One thing I don't have enough funded is 2- 529 plans and I can certainly strengthen them. I see the tax benefits by not paying off as I intend to make it a rental property once we move to a different house.

Reasoning for paying off mortgage ($100k). Last few yrs I am making few extra payments towards mortgage.
1) own a house- sleep well at house.. anyways I don't have any issues with sleep even now.
2) avoid investing in market at this time or end up spending slowly but surely on something we don't need like a new car
3) don't get aloof and buy 'even' bigger house then what we intend in next 6-9 months by cash lying around

Finally, its better to ask for forgiveness then permission.

ThePrince
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Re: Paying off Home mortgage, partner doubts?

Post by ThePrince » Sun Nov 12, 2017 3:45 pm

phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
+++++++1

stan1
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Re: Paying off Home mortgage, partner doubts?

Post by stan1 » Sun Nov 12, 2017 3:47 pm

OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Finally, its better to ask for forgiveness then permission.
Oh gosh, not with my spouse or my boss for that matter.

ThePrince
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Re: Paying off Home mortgage, partner doubts?

Post by ThePrince » Sun Nov 12, 2017 3:49 pm

rob65 wrote:
Sun Nov 12, 2017 9:51 am
phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
Most of us, myself included, wouldn’t borrow money at 3% and invest it, but that is due to risk aversion. The purely financial answer is that if you can borrow money at 3%, with the interest tax deductible, and you have a long time horizon, then you will probably come out better in the long run by staying fully leveraged. It’s the “probably” that holds most of us back.

Edit: Just to be clear, I’m not advocating taking out margin loans or anything like that and I’d personally vote to pay off the house. Just trying to point out that the OP’s wife has a valid argument about investing vs paying off the house.
Then your ‘pure’ answer doesn’t take risk into account, which is a mistake.

quantAndHold
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Re: Paying off Home mortgage, partner doubts?

Post by quantAndHold » Sun Nov 12, 2017 3:59 pm

OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Finally, its better to ask for forgiveness then permission.
Seriously? Major financial decision that your wife has indicated that she disagrees with? Wow.

We’re not supposed to give relationship advice, only financial, so I’ll just say this. Divorce is expensive.

retiredjg
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Re: Paying off Home mortgage, partner doubts?

Post by retiredjg » Sun Nov 12, 2017 4:26 pm

OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Some more information.....Reasoning for paying off mortgage ($100k).
That was not your question. If it had been your question, you would have gotten different answers.

Finally, its better to ask for forgiveness then permission.
Your lack of respect for your spouse and her opinions has been brought up to you repeatedly and you don't seem to get it. This is sad.

TheHouse7
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Re: Paying off Home mortgage, partner doubts?

Post by TheHouse7 » Sun Nov 12, 2017 5:13 pm

quantAndHold wrote:
Sun Nov 12, 2017 3:59 pm
OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Finally, its better to ask for forgiveness then permission.
Seriously? Major financial decision that your wife has indicated that she disagrees with? Wow.

We’re not supposed to give relationship advice, only financial, so I’ll just say this. Divorce is expensive.
1/2 your networth is more than expensive.
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

delamer
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Re: Paying off Home mortgage, partner doubts?

Post by delamer » Sun Nov 12, 2017 5:51 pm

retiredjg wrote:
Sun Nov 12, 2017 4:26 pm
OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Some more information.....Reasoning for paying off mortgage ($100k).
That was not your question. If it had been your question, you would have gotten different answers.

Finally, its better to ask for forgiveness then permission.
Your lack of respect for your spouse and her opinions has been brought up to you repeatedly and you don't seem to get it. This is sad.

Completely agree. Marriage partners discuss their options and come to a compromise. They don't make unilateral decisions and hide them from their spouse..

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randomizer
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Re: Paying off Home mortgage, partner doubts?

Post by randomizer » Sun Nov 12, 2017 5:53 pm

Tell her about it before you do it. I can see you doing great (perhaps permanent) damage to the marriage if you don't. And obviously, this means you may not end up paying it off, because that depends on the outcome of the conversation.

DarthSage
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Re: Paying off Home mortgage, partner doubts?

Post by DarthSage » Sun Nov 12, 2017 6:12 pm

OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Whoa thanks for the wisdom. Appreciate all the advice.

Some more information.
I do have enough money for the bigger house (down payment, etc..) if its happens in 6-9 months. One thing I don't have enough funded is 2- 529 plans and I can certainly strengthen them. I see the tax benefits by not paying off as I intend to make it a rental property once we move to a different house.

Reasoning for paying off mortgage ($100k). Last few yrs I am making few extra payments towards mortgage.
1) own a house- sleep well at house.. anyways I don't have any issues with sleep even now.
2) avoid investing in market at this time or end up spending slowly but surely on something we don't need like a new car
3) don't get aloof and buy 'even' bigger house then what we intend in next 6-9 months by cash lying around

Finally, its better to ask for forgiveness then permission.

With this attitude, I predict a 100% probability of divorce in your future. Not over this specific issue, necessarily, but if you have this approach to dealing with your spouse, your marriage will not survive. From your description of your wife in your OP, she seems to be intelligent and engaged in family finances. Her opinion may differ from yours (or mine!), but she's involved enough to have an opinion. You making large financial decisions unilaterally does not show her the love and respect she deserves.

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FiveK
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Re: Paying off Home mortgage, partner doubts?

Post by FiveK » Sun Nov 12, 2017 6:30 pm

OneWorld111, are you willing to show this thread to your wife?

avalpert
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Re: Paying off Home mortgage, partner doubts?

Post by avalpert » Sun Nov 12, 2017 6:47 pm

OneWorld111 wrote:
Sun Nov 12, 2017 3:41 pm
Finally, its better to ask for forgiveness then permission.
Not in this case no it isn't. You are talking about using community property assets to pay off a joint mortgage on a jointly owned property - it isn't permission you need it is agreement. If you don't have that than don't do it.

avalpert
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Re: Paying off Home mortgage, partner doubts?

Post by avalpert » Sun Nov 12, 2017 6:51 pm

ThePrince wrote:
Sun Nov 12, 2017 3:49 pm
rob65 wrote:
Sun Nov 12, 2017 9:51 am
phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
Most of us, myself included, wouldn’t borrow money at 3% and invest it, but that is due to risk aversion. The purely financial answer is that if you can borrow money at 3%, with the interest tax deductible, and you have a long time horizon, then you will probably come out better in the long run by staying fully leveraged. It’s the “probably” that holds most of us back.

Edit: Just to be clear, I’m not advocating taking out margin loans or anything like that and I’d personally vote to pay off the house. Just trying to point out that the OP’s wife has a valid argument about investing vs paying off the house.
Then your ‘pure’ answer doesn’t take risk into account, which is a mistake.
Huh? Risk aversion is not the same thing as risk - it is in fact an irrational fear of risk.

The pure answer does account for risk, the risk averse people overstate the risks.

Lexi
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Re: Paying off Home mortgage, partner doubts?

Post by Lexi » Sun Nov 12, 2017 6:52 pm

Duplicate post
Last edited by Lexi on Sun Nov 12, 2017 6:54 pm, edited 1 time in total.

Lexi
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Re: Paying off Home mortgage, partner doubts?

Post by Lexi » Sun Nov 12, 2017 6:53 pm

I have not looked at OP’s previous posts, but what he proposes is so ridiculous that I suspect he is a troll!

If not, preserve liquidity to pay the divorce lawyer your wife should hire soon.

ThePrince
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Re: Paying off Home mortgage, partner doubts?

Post by ThePrince » Mon Nov 13, 2017 5:29 pm

avalpert wrote:
Sun Nov 12, 2017 6:51 pm
ThePrince wrote:
Sun Nov 12, 2017 3:49 pm
rob65 wrote:
Sun Nov 12, 2017 9:51 am
phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
Most of us, myself included, wouldn’t borrow money at 3% and invest it, but that is due to risk aversion. The purely financial answer is that if you can borrow money at 3%, with the interest tax deductible, and you have a long time horizon, then you will probably come out better in the long run by staying fully leveraged. It’s the “probably” that holds most of us back.

Edit: Just to be clear, I’m not advocating taking out margin loans or anything like that and I’d personally vote to pay off the house. Just trying to point out that the OP’s wife has a valid argument about investing vs paying off the house.
Then your ‘pure’ answer doesn’t take risk into account, which is a mistake.
Huh? Risk aversion is not the same thing as risk - it is in fact an irrational fear of risk.

The pure answer does account for risk, the risk averse people overstate the risks.
Risk is involved in having a mortgage. The risk of foreclosure.

avalpert
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Re: Paying off Home mortgage, partner doubts?

Post by avalpert » Mon Nov 13, 2017 6:37 pm

ThePrince wrote:
Mon Nov 13, 2017 5:29 pm
avalpert wrote:
Sun Nov 12, 2017 6:51 pm
ThePrince wrote:
Sun Nov 12, 2017 3:49 pm
rob65 wrote:
Sun Nov 12, 2017 9:51 am
phisher4 wrote:
Sun Nov 12, 2017 9:06 am
Ask your wife the following question:

Would you take out a new loan at 3-4 percent in order to invest in today's market?

Because that's exactly what you're doing by not paying off your mortgage.

One compromise is to pay off your mortgage now, see how it feels (with your increased monthly disposable income and savings), and then decide whether to get a new one. You can always get another mortgage in the future.
Most of us, myself included, wouldn’t borrow money at 3% and invest it, but that is due to risk aversion. The purely financial answer is that if you can borrow money at 3%, with the interest tax deductible, and you have a long time horizon, then you will probably come out better in the long run by staying fully leveraged. It’s the “probably” that holds most of us back.

Edit: Just to be clear, I’m not advocating taking out margin loans or anything like that and I’d personally vote to pay off the house. Just trying to point out that the OP’s wife has a valid argument about investing vs paying off the house.
Then your ‘pure’ answer doesn’t take risk into account, which is a mistake.
Huh? Risk aversion is not the same thing as risk - it is in fact an irrational fear of risk.

The pure answer does account for risk, the risk averse people overstate the risks.
Risk is involved in having a mortgage. The risk of foreclosure.
And what makes you think the pure answer doesn't account for that risk?

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