My Argument To Never Pay Down Home Mortgage

[moda0306]

Tyler,

What you have just said... is the most insanely logical thing I've ever heard.  At no point during your post were you even close to anything that could be considered an irrational thought.  Everyone reading this thread is now smarter for having read it.  I award you infinity points, and may you meet Harry Browne in the afterlife.


Seriously though... confirms my feelings on the topic.  Safe neighborhood, close to work, modest and encouraging being outdoors, good neighbors and area nearby.

I think I'm allergic to McMansions.  Most of them are built like crap, to boot.

Actually, PS's concrete houses are the most appealing to me.  If I ever build in MN, I might have to try that.

[stone]

To be honest I didn't give a thought as to what to do with savings until our house had the offset mortgage offset. It was only then that I looked into what stocks and bonds etc were and portfolio strategies etc and got the impression that the HBPP seemed sensible.

[Pointedstick]

I did nearly the exact same thing as Tyler, though my flight from the SF bay area took me to New Mexico, not Texas. My top priority was finding the worst house in a good neighborhood so I would get a good deal. I wanted it to have low property taxes, I wanted it to be small and compact with a good layout so that it felt bigger than it actually was, and I wanted it to need work so that I could learn home improvement skills and fix it up myself. So far I have succeeded. I purchased a 1,100 square foot house with a nice layout for five figures in cash and have done most of the work on it myself. I honestly don't care what I eventually sell it for many years from now but would not be surprised if my labors will have resulted in a substantial profit at that time. I've never had to pay more than $100 in a month for all the utilities (and usually about $60). The house is within walking distance of nearly everything I care about and I love my neighbors. It's been a wonderful experience so far.

For me, owning a house vs renting and having no mortgage on are primarily matters concerning the following:
- Getting my month-to-month cost of having a place to live be as low as possible
- Having land on which to grow food and build outbuildings (more on that a few years...)
- Being able to use it as a project to learn awesome new skills

[moda0306]

Mountaineer,

Thanks for the advice, and minus the religious stuff (and even though we probably differ as to what SOME of those good values are), I really agree with what you're saying...

Though it sounds a little bit like you're equating renting with whoring around .

Could you explain a little more about your feelings on that? 

I was trying to equate having a home (vs. renting a home) with having a wife (vs. whoring around).  Both will meet your physical needs, and for some, maybe even emotional needs but I rather doubt it if one is honest with ones self, but then again, I have no experience in the whoring around part.  It seems one has a sense of permanance, one does not; one has a sense of loyalty, one does not; one you feel committed to, one you don't .... etc.  Just depends on what is important to you (values?).  Make sense?

... Mountaineer

Totally. 

And as an ex-pizza delivery driver, I can confirm that renters ARE more whorish than homeowners. 

[moda0306]

I did nearly the exact same thing as Tyler, though my flight from the SF bay area took me to New Mexico, not Texas. My top priority was finding the worst house in a good neighborhood so I would get a good deal. I wanted it to have low property taxes, I wanted it to be small and compact with a good layout so that it felt bigger than it actually was, and I wanted it to need work so that I could learn home improvement skills and fix it up myself. So far I have succeeded. I purchased a 1,100 square foot house with a nice layout for five figures in cash and have done most of the work on it myself. I honestly don't care what I eventually sell it for many years from now but would not be surprised if my labors will have resulted in a substantial profit at that time. I've never had to pay more than $100 in a month for all the utilities (and usually about $60). The house is within walking distance of nearly everything I care about and I love my neighbors. It's been a wonderful experience so far.

For me, owning a house vs renting and having no mortgage on are primarily matters concerning the following:
- Getting my month-to-month cost of having a place to live be as low as possible
- Having land on which to grow food and build outbuildings (more on that a few years...)
- Being able to use it as a project to learn awesome new skills

Sweet!  There isn't anything quite-like good neighbors and a community feel.  It carries a lot of positive dividends into the rest of your life.  It is one thing that my home town had in spades, though it was a bit of a diamond in a rough, and I prefer the city atmosphere a bit more.

[Pointedstick]

P.S. I don't actually live in a concrete house, but when I build my next house, it is going to be VERY interesting...

[Mountaineer]

Mountaineer,

Thanks for the advice, and minus the religious stuff (and even though we probably differ as to what SOME of those good values are), I really agree with what you're saying...

Though it sounds a little bit like you're equating renting with whoring around .

Could you explain a little more about your feelings on that? 

I was trying to equate having a home (vs. renting a home) with having a wife (vs. whoring around).  Both will meet your physical needs, and for some, maybe even emotional needs but I rather doubt it if one is honest with ones self, but then again, I have no experience in the whoring around part.  It seems one has a sense of permanance, one does not; one has a sense of loyalty, one does not; one you feel committed to, one you don't .... etc.  Just depends on what is important to you (values?).  Make sense?

... Mountaineer

Totally. 

And as an ex-pizza delivery driver, I can confirm that renters ARE more whorish than homeowners. 

1003, but who is counting? 

... Mountaineer

[moda0306]

P.S. I don't actually live in a concrete house, but when I build my next house, it is going to be VERY interesting...

PS,

It'll be even more interesting when I pay you with steak dinners to come build mine for me.

[Pointedstick]

P.S. I don't actually live in a concrete house, but when I build my next house, it is going to be VERY interesting...

PS,

It'll be even more interesting when I pay you with steak dinners to come build mine for me.

You may think you're joking...

[stone]

P.S. I don't actually live in a concrete house, but when I build my next house, it is going to be VERY interesting...

Our house (and pretty much all of this town in the UK) is built out of sandstone blocks with slate roofs. Its a pretty much indestructible construction.

[Pointedstick]

P.S. I don't actually live in a concrete house, but when I build my next house, it is going to be VERY interesting...

Our house (and pretty much all of this town in the UK) is built out of sandstone blocks with slate roofs. Its a pretty much indestructible construction.

Yes, but I bet it costs a fortune to heat. Well maybe not, if it's very small.

[dualstow]

I was asking my contractor why there aren't more poured concrete homes in the States and he said part of it was insulation. If you're already in the right climate, that's different.

I thought adobe was the way to go in your neck of the woods, PS.

[Pointedstick]

I was asking my contractor why there aren't more poured concrete homes in the States and he said part of it was insulation. If you're already in the right climate, that's different.

I thought adobe was the way to go in your neck of the woods, PS.

Adding insulation is trivial, especially if you use a system like ICF (Insulated Concrete Forms) that basically amounts to pouring the concrete inside a form made of foam insulation that you basically build like Lego blocks. ICFs are also scarcely more expensive than framed walls in some parts of the country nowadays. IMHO a lot of it boils down to entrenched traditionalism and unwillingness to learn anything new unless "new" is also cheaper. If it's at all more expensive, then it doesn't get done unless codes mandate it or the customer asks for it, regardless of how much better it might be. There's no creativity in marketing the advantages of things that are better in non-aesthetic ways.

[dualstow]

Oh yes! I think he did make a passing reference to ICFs, but did not say they were not expensive. I don't know how long ICFs have been around but maybe they'll take over in due time. Wonderful idea.

[Pointedstick]

Oh yes! I think he did make a passing reference to ICFs, but did not say they were not expensive. I don't know how long ICFs have been around but maybe they'll take over in due time. Wonderful idea.

ICFs are very cool, to be sure. They result in houses that are strong and well-insulated, and plumbers and electricians love them because they can route channels into the interior forms' surfaces to hide utilities in without having to snake things through wooden studs. However, ICFs are not without problems:

- They require a lot of concrete and hands-on experience to pour correctly without blowing out the form; not DIY-friendly
- The foam forms are flammable and insects love to tunnel through them
- Because the concrete is trapped between two layers of insulating foam, the opportunity to take advantage of its thermal mass by exposing it to the interior is lost
- The foam forms are more difficult to safely fasten things to (e.g. drywall, siding) than wood-sheathed walls

[dualstow]

I'm sure they'll improve with time and redesigns.

[Tyler]

What you have just said... is the most insanely logical thing I've ever heard.  At no point during your post were you even close to anything that could be considered an irrational thought. 

Ha!  Touché.  I may appreciate the non-financial benefits of being debt-free, but I'm not an irrational monster.

For the record, I think the arguments for a mortgage in this thread are quite reasonable. All very good points. As long as you approach your own financial decision with a level head and not as a justification for buying more than you can afford (it's not a million dollar mansion, it's a million dollar mortgage guaranteed to make me money!) I think a smart homebuyer will be fine either way.

Now if we can convince PS to build a PP/ERE community of affordable permanent houses, things could get really interesting.

[madbean]

Now if we can convince PS to build a PP/ERE community of affordable permanent houses, things could get really interesting.

Good idea. I heard they were 3D printing houses in China so that should be right up his alley.

[Pointedstick]

Now if we can convince PS to build a PP/ERE community of affordable permanent houses, things could get really interesting.

That's the plan.

[hoost]

Whether you get a mortgage or pay cash, the FAR greater impact on your financial future is the house you choose to purchase.

The guy who wrote the Millionaire Next Door has another book out called "Stop Acting Rich", and I believe the key take-away, at least for me, from that book was that the people who tended to have higher net worths vs. income tended to buy a lot less house than they could afford.  Not that they lived in dumps, but that they tended to be the highest earners in their neighborhood.

[MachineGhost]

The guy who wrote the Millionaire Next Door has another book out called "Stop Acting Rich", and I believe the key take-away, at least for me, from that book was that the people who tended to have higher net worths vs. income tended to buy a lot less house than they could afford.  Not that they lived in dumps, but that they tended to be the highest earners in their neighborhood.

Yup, its not the house so much as the neighborhood social pressure in having to keep up appearances.  That is expensive.  I don't know the value of being "King of the Hill" in a middle or upper class mobile home park, but it is certainly one valid way to save money.