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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Clicky poll about mortgages
I'm going to need Shansbride and bluekid to slap me. Slap me now.
[Poll]
[Poll]
Re: Clicky poll about mortgages
That is why I have always gone with a 30 year. You can always pay more on a 30 year, but there is no way to pay less if something happens.
I know Dave wants people to have debt for a smaller amount of time, but there is no reason to not give yourself a little room to breathe.
This is us, too.
I am not going to get on my soapbox about Dave Ramsey, I am not going to get on my soapbox about Dave Ramey, I am not going to get on my soapbox about Dave Ramsey...
30 year considering rates are low (ours is near 4%) and it provides a better tax advantage for us. We are not making extra payments now but will do so when our improvements are finished (a little over $100k in the next five years).
Why not?
But why decrease your tax advantages? These should be especially important to you given that you do not have a multiple income household, have a child to support AND the marriage penalty takes effect again in 2011.
This is my issue with Dave Ramsey. He teaches his "followers" that debt is "bad" but doesn't bother to discuss all the good stuff that comes with it - there is a bigger picture than being out of debt in 30 years - this is a HOUSE, an investment, not a car or a dress.
So let me ask you a question, I get a tax break because of the interest I pay on the mortgage, correct? What if I paid off my mortgage and then donated the $10,000 I used to pay every year in interest to my church. Would I not get them same break?
Actually, you would not. There are limitations are charitable donations that are determined by your income. Generally, you can not take a $10k deduction for $10k in charitable contributions. There are not limitations on mortgage interest. You would be better off putting the $10k in a long-term CD especially if you do not consider the house you are buying a "forever home."
You know what? I am not at all busting your chaps. I think its great that you are so proactive about your financial situation. But I don't think you should stress out about a 30 year mortgage either.
No, I didn't think you were. And I don't mindlessly follow Dave Ramsey. I do think what he says makes sense which is why it's easy to follow his advice. But, I'm always down for discussing "the other side."
Of course getting a 30 yr mortgage is more appealing to our greedy side (because we could obviously get more house for our monthly payment), we're just trying to make the best long term decision for our family.
*jumps in* Tavia, I think we probably have the same thought about DR. He's got a pretty radical opinion about some stuff, and I don't follow everything he says either. I agree with you in that most of what he says makes good common sense. I think you've got the right kind of behavior with money, from what you've said, and in my opinion, that's the most important thing...it's all about living within your means and having a healthy savings account(s). Are you thinking of buying a house?
Yeah, within the next year or two most likely. We like our little house (and its small payment
), but we'd like to have another child and we have a 2bd 1ba right now. We're just waiting to keep saving our down payment. We might even build, not too sure yet.
we have a 30 year mortgage right now (we bought this house prior to our DR days), but when we build our next house we plan to do a 15. I like that it would force us to pay down the mortgage (and we plan to pay it off faster than that). It seems to easy to say that we will pay extra on the mortgage, but instead put that money towards furniture or a vacation or shoes or whatever.
as far as the tax "benefits" go, I don't really understand that. I mean I have heard DR say more than once that you are basically sending the bank like 10k to keep from sending the government 5k (or 3k or 7k or whatever it ends up being). I'm sure when we get to a place where we are close to being mortgage debt free we will have to research that some more.
The other thing is that you usually get a better rate with a shorter term. Less risk for the bank so they charge you less. I like that too.
With all that said, I don't think you are horrible if you get a 30 year mortgage. You are responsible with your money and I think that means a lot.
Well, you have exactly nailed the difference between me and most people. Making a second monthly principle payment on my house isn't really important to me because I like to use that extra money to build memories - rather its saving for a vacation, or buying myself a fun bag or shoes while on vacation or to celebrate a success at work - whatever. Its why I work so hard - to build memories and have a life.
no, I think you are most people! I know we said we were going to pay extra on our mortgage and we never did until I had it automatically withdrawn from our checking acct. Now that its taken out I don't miss the money, but also couldn't tell you where it was going before, it was just getting spent. I think it is important to have a life now and be able to spend money on things other than neccessities, but also want to be able to afford to retire and have a life when we are 80. I think it is all about balance and sometimes it is hard for us, and I'm sure others too, to find that balance
I absolutely agree that its about finding a balance. At the same time, you and Shan are incredibly young. Do I worry about retirement? Yes. Am I saving for retirement? Absolutely. I am very proud of my retirement account. But who is to say that any of us will retire? What happens if you die at 35? Or tomorrow? Or 45? There's the non-emotional idea behind having debt paid off quickly and I totally get that, obviously, but at the same time, we can't work for a future that may or may not exist at the expense of our happiness now.
I'm the same way. We'll pay extra on our mortgage when we can, but we like to go on vacation. Vacations are incredibly important to me, and I'm not going to give those up. We save money where we can, and we always put bills and other priorities at number one, but I also put a high priority on having fun and making memories.
my bookshelf!
Bloggy
Here's my two cents. I just re-financed yesterday from a 30-year mortgage at 6+ percent interest to a 15-year mortgage at 3+ percent interest. My monthly payments stayed the same and I cut the term of my loan in half. My house payment is not large by any means, and I'm sure I could pay down my mortgage faster if I really wanted to sacrifice, but I just wanted to balance smart financial decisions with also enjoying the life I have as a homeowner, which for me means having enough money for vacations, saving $ for my fantasy car, shopping, and other fun/superficial things. I think I would be really unhappy as a person if I struggled for many years trying to pay down my mortgage as fast as possible when I could be using that money to do "once in a lifetime" kind of things... like taking solo trips half-way around the world. :-P
I could not have said that better myself!
Or going to Phoenix with your nestie bestie!!!
ITA. That's a main reason we're leaning toward a 15 year. We'd have our house paid off before I turned 40. That's definitely still young enough to 'enjoy life'... and we'd be enjoying it with no debt whatsoever.
But, I've enjoyed this thread. It's giving me lots to think about.
By no means am I trying to pick on you Tavia... this is just my opinion for me, not you. I think there's a difference between "enjoying life" in your 20s and doing the same at age 40+. It's one of the biggest reasons I want to postpone having kids as long as possible (if ever) because I will never get this time in my life back (and I LOVE my life). The things I have done in my 20s... would not be things I would do in my 30s or 40s, but boy did I have fun and am glad I had the means to do it. But hey, that's not everyone's cup of tea.
As far as paying off your mortgage by a particular age... I know that sounds appealing, but I really don't think of it that way. Even though I would be perfectly satisifed in staying in my current house for a very long time and paying off my mortgage at a relatively young age, there is the chance we will move either due to relocating to a better neighborhood or our jobs will take us out of state. BF has moved around quite a bit, and when we factor in our re-location history, we could be paying on a mortgage for quite some time as we move into more expensive markets (given where his company is located). Although it might be nice to have a home bought and paid for by 40, I don't think it's realistic for most people since you tend to move several times throughout your life, and those moves usually involve upgrading rather than downgrading. I care more about having a decent amount of equity built up by the time I approach my retirement years... the way I see it, I'll probably be working when I'm "supposed" to be retired, and I don't consider that a bad thing. Whether full-time or part-time, I think working post-retirement helps keep my mind and body active. But I digress...
And just to reiterate, this wasn't meant as an attack of any sort. Just my personal philosophy...
No I didn't think it was an attack. Do I come off as super sensitive or something? lol.
I guess it just comes down to what you value and how you plan your life. It's always been DH and I's dream to start our family young, and to be able to enjoy our children while we're young - that is enjoying life in our 20's for us. I don't think everyone needs to do that, it's just what we want. To each their own
Ditto!
We are like most and got a 30 year and pay extra on top of our required payment.
We've discussed doing a 15 year, but life is just so unexpected that I don't want to put that pressure on us. If something were to happen with jobs, injuries, etc. I would hate for us to face the possibilty of losing the house because we did a 15 instead of a 30. Doesn't mean we aren't aiming to pay the house off quickly. We are aiming to pay it off before the 30 years (hence the paying of extra money), but we aren't setting ourselves up for potential failure (for lack of a better word) by locking us into that 15 year mortgage.
We do a monthly budget and make sure that money is allocated to places that are important and right now the house is important. However, in a few years we may want to trim those payments to bare bones to pay for a trip somewhere or do that kitchen renovation. The nice thing is that we will have another area to trim money from to funnel it into that project or trip.
Now with all of that being said, do what is best for you and your family. Everyone is different and what is right for one is not right for another. Just consider all the angles and situations you and your family could possibly face in the future. Good luck!
Momma to two angel babies,
Squishy BFP 06/15/2010, EDD 02/21/2011, M/C approx. 07/15/2010
Jellybean BFP 01/29/2011, EDD 10/07/2011, M/C 03/23/2011.
Grow Baby Beet!! BFP 11/21/2011, EDD 07/28/2011.
Keeping fingers crossed that third times the charm.
Make a pregnancy ticker
We have a 30 year mortgage. We did it because of the flexibilities and less commitment. We don't pay extra on the mortgage because of the tax benefits and the low rate. Instead, we put the money in investments. By paying off your mortgage, you may pay less interest but you miss the opportunity to invest it and earn more - especially with these super low rates it seems less and less to your advantage to pay it off early if you have the discipline to invest it.