Comments on No Debt MBA: But don't take my word for it.... Mortgage debt

Great!

2012-05-31T13:51:20.670-07:00

Great!

Paul - When we were looking at houses both ...

2011-06-21T05:00:35.206-07:00

Paul - When we were looking at houses both of the ones we put offers in on were foreclosures. One was gorgeous and 90% meticulously renovated and the other needed some serious work but had an enormous yard in a really good location. I would have considered both an investment. I think trying to find a bargain or house with good long-term prospects is important if only because you'll be sinking so much money into your primary residence. For many people it's their forced nest egg. Might as well be a good one.

Thanks for the link, NoDebtMBA. Even though I don...

2011-06-18T10:42:02.090-07:00

Thanks for the link, NoDebtMBA.

Even though I don't like the concept of paying off a home early, and instead find investing a better use of resources, I do see why some people might see opposite.

In general, leverage is something that I don't necessarily fear. The opposite is probably closer to the truth; if I'm not making full use of available leverage, then I feel like I'm falling behind.

For what my uneducated opinion is worth, I think you made a wise move in synthesizing both views. Going for a 15-year loan makes a lot of sense, and you can always choose to prepay if necessary. Meanwhile, you still have plenty of liquidity, a safety net, and access to capital at the cheapest it has been in...well, forever.

I second cashflowmantra. Kudos for all the helpful...

2011-06-17T13:00:17.783-07:00

I second cashflowmantra. Kudos for all the helpful resources.

I don't really consider buying a house as an investment. You're paying for a roof over your head and its not generating cashflow, which makes your primary residence more of a purchase than an investment.

If you want to make an investment, why not buy a house in a depressed area, or score some type of foreclosure deal so that you can at least generate some positive cashflow out of it.

However, IMHO, these houses are generally not in areas you want to be living in.

If you really want to invest, why not buy a house - use it as a tax benefit and secretly rent it out for the cashflow to help pay off the mortgage. Then rent housing somewhere cheaper.

I want to thank you for this exhaustive list of po...

2011-06-17T07:00:11.879-07:00

I want to thank you for this exhaustive list of posts that I can now go and read. My feeling has been one of liquidity regarding prepayment of a mortgage. I have heard stories of someone who was diligently prepaying a mortgage and was close to paying it off then lost his job with the recession. With no job and in the midst of a credit crunch, this individual could not access the equity in the house so ended up losing the house pretty quickly when he fell behind. The bank was more than happy to foreclose since they could easily get back the small amount of the loan even in a depressed real estate market. Something to think about.