Paying off the Mortgage

[UKMustangFan]

There is a house on our street directly behind our home, with a value slightly lower than ours, that rents for $500 per month.

 

Not knowing where you live, but that is dirt cheap for renting a house. Cheaper than most apartments in NKY.

[Randy Parker]

Not knowing where you live, but that is dirt cheap for renting a house. Cheaper than most apartments in NKY.

 

Northern Pendleton County. We're about 5 or 6 miles from the Campbell County line, but we're still a rural area.

 

I had a realtor tell me a few years ago that you don't find a lot of rental properties in our area for over $600.

[Randy Parker]

No one likes the idea of paying interest. However, consider the alternative. You could have paid about $52,000 in rent and then continued to pay more rent. Now you have an asset that you are no longer paying on.

 

What you're saying is right with the numbers I provided.

 

But if we were going to rent something, we would have opted for less house--the $400 a month neighborhood. If we had done that for 7 years and 3 months, we would have paid almost $35,000 in rent. If we had saved the other $1,200 per month, that would leave us with about $105,000 in savings. Add into that another $21,000 that we got from selling some property we had, which helped us pay off the house so early, and the total becomes $126,000. Add into that another $150 per month that we could save by not having to pay property taxes & there's another $13,000, bringing the total to $139,000.

 

So that $139k in savings, plus the $35k we would have put toward rent totals $174k.

 

The way we did it ended up costing us $185k.

 

If I had it to do again, I would very likely repeat what we have done. We enjoy our street, good neighbors, and all of that stuff. It cost us about $11,000 to do that as opposed to never borrowing, renting, and then paying cash for a house. But overall, it was worth it to me.

 

Either way, what you said feels really good...having an asset that we are no longer paying on.

[plantmanky]

Northern Pendleton County. We're about 5 or 6 miles from the Campbell County line, but we're still a rural area.

 

I had a realtor tell me a few years ago that you don't find a lot of rental properties in our area for over $600.

 

You and I are practically neighbors then.

[Randy Parker]

You and I are practically neighbors then.

 

Dear God...

[Lawnboy13]

You and I are practically neighbors then.

 

Dear God...

 

This just in..........Parker mansion up for sale, and at a discount. :lol:

[75center]

What you're saying is right with the numbers I provided.

 

But if we were going to rent something, we would have opted for less house--the $400 a month neighborhood. If we had done that for 7 years and 3 months, we would have paid almost $35,000 in rent. If we had saved the other $1,200 per month, that would leave us with about $105,000 in savings. Add into that another $21,000 that we got from selling some property we had, which helped us pay off the house so early, and the total becomes $126,000. Add into that another $150 per month that we could save by not having to pay property taxes & there's another $13,000, bringing the total to $139,000.

 

So that $139k in savings, plus the $35k we would have put toward rent totals $174k.

 

The way we did it ended up costing us $185k.

 

If I had it to do again, I would very likely repeat what we have done. We enjoy our street, good neighbors, and all of that stuff. It cost us about $11,000 to do that as opposed to never borrowing, renting, and then paying cash for a house. But overall, it was worth it to me.

 

Either way, what you said feels really good...having an asset that we are no longer paying on.

 

Given the numbers you've provided and depending on your tax situation, your interest and property taxes probably saved you between 11,000 and 16,000 over those 7 years if you itemized. Hard to say as it would depend on your total Schedule A deductions vs the standard deduction.

 

And now you have an asset worth a pretty penny to boot.

[Randy Parker]

Given the numbers you've provided and depending on your tax situation, your interest and property taxes probably saved you between 11,000 and 16,000 over those 7 years if you itemized.

 

That's true.

[plantmanky]

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