willthrill81 wrote: ↑
Sun Dec 01, 2019 5:12 pm
<snip...> My observations are very similar to yours. Most of those I know over the age of 70 have not moved in a long while or else they paid for their current home with the proceeds from their prior home where they paid off their mortgage in far fewer than 30 years. Most of those we see who are younger than 40 are moving every few years, taking out a new 30 year mortgage every time and using what little home equity they had from their prior home to 'trade up' to a more expensive home.
What may be more to the point is that mortgages have become bigger and with longer terms today than they were decades ago.
I/wife represent your remark...
Both age 71, married for 5 decades and we're in our fourth (and hopefully final) home during our years together, taking the profit from each home and rolling it into the next (e.g. no cash out).
The first house (early 70's) had an interest rate of 8%. The second and third had an interest rate of 10% (not including points paid to reduce the rate). Our final/current home, built in 1994 had an interest rate of 6.875 plus 2% points.
In our past, the idea to retire a note/mortgage ASAP was of primary importance to us. While we had the advantage of deduction of mortgage interest, we still did not agree with the idea of getting $.50 credit on our FIT for every dollar spent. The government can keep their credit; I'd rather keep my entire dollar.
That being the case, unlike today, we chose to pay off our mortgage notes as soon as we could. In fact, with our current home, we "saved" over $120k in foregone interest (interest we did not have to pay), by paying off our 30-year initial term in 5.5 years. That was done by paying extra on the principal every month with additional funds available from overtime, tax refunds, and the like.
While I didn't comment earlier since I/we were not of the target group discussed, I did want to respond to the comment given. However, we did ensure that we had no loan liabilities when entering retirement and could never see carrying a note/mortgage into retirement. That was our reality of the time, and I'm sure it would have to be revisited if we entered retirement today in this low interest environment.
Our financial retirement goals were quite simple; maximize income while minimizing expenses. Both filing for SS last year at age 70 satisfied the first, having no outstanding debts (beyond minor monthly expenses, paid off every month) satisfied the second.