Explain to me Why its Good to Pay off Your Mortgage quickly!

[Deleted User]

From our POV, on the one hand we can look at it as overpayments on the mortgage - on the other, it's over twenty grand's worth of tax-free savings. After all, if the proverbial hits the fan, then we do have the option of paying less on the mortgage or stopping payments altogether - or getting some or all of our overpayments back! And given the way my wife's RBS shares have gone in the same five-year period, I think we've done alright by going down the overpayment route.

djbd1973

Another problem is the percentage of people within the general public that do not count the mortgage as a debt. Credit cards 'Yes'. Mortgage 'No'.

People are used to the notion that a 25 year mortgage is the norm and that giving away several times the value of the property when bought is okay, but if tax on petrol goes up, or Council Tax goes up, then its a problem because we all have less money to spend.

GettingThingsDone

@DD - hmmm, yes, I agree, there's not much point in going round in circles, and to a certain extent I think you're deliberately missing my point for the sake of an argument.

So to summarise:

1. I AM NOT TALKING ABOUT YOU AND YOUR SITUATION!!! We are all different, in different situations, dreams and ambitions. Overpaying your mortgage is an investment decision. Investment decisions come with WARNINGS for reasons, and generally speaking what is good advice for one person, may not be good for another. @djbd1973 - I have a spare £1000 - should I overpay my mortgage or put it towards paying off my credit card? Or should I do up my bathroom and improve the value of my house?

2. I actually think MFW is a good idea (a great idea even). Believe me I know a lot about interest calculations for mortgage payments. I mean a lot. In a lot of detail. Almost everything there is to know in fact. Down to the penny. And no, it's not as straight-forward as some may think.

3. I CARE. I'm just a little surprised that this board doesn't seem to have any warnings e.g. if you are overpaying, make sure you can actually get your overpayments back. Common sense maybe, but it might not be obvious until you actually need that money back. Who takes the wrap if somebody on here makes a bad choice - i.e. is this site offering unregulated mortgage advice? (sorry, just paranoid about that kind of thing ) Maybe I just missed it, sorry if I have - I'll have a look now...

4. I was going to leave it at 3 points, but you actually shoot yourself in the foot DD. Taking the MFW path to it's logical conclusion, you should dispense with your pensions, savings and the rest of your portfolio of investments and put every single penny towards overpaying your mortgage. Hmmm, but you don't. Why's that? Oh, because that would be *IRRATIONAL* wouldn't it? DO YOU SEE WHAT I AM TRYING TO SAY TO YOU?

MFW + Portfolio + Lifeplan = Good

Phew, rant over. Although I'm not an MFW again yet (I saved up more than enough to offset mine when I was 30), I am just trying to help you see why this 'argument' comes up time and again. I just think there is a gap for some general financial advice to be given to pre-MFWs about the implications of going down this road, and the kinds of portfolios that are advisable to hold to mitigate risk.

Yes - you read it right. I effectively paid off my mortgage in my youth and I'm telling you it is not the be-all-and-end-all in life.

And I know I'm a bit unusual, but I wouldn't go as far as renting! Well, except if I was holding lots of cash and house-prices were plummeting...

gtd

P.S. How do you make money in a recession? Easy, make sure you've got plenty of cash and have good timing

GettingThingsDone

Hi beachbeth, sorry for hijacking your post!

The MFW forum is great for help and inspiration with getting MF. Unfortunately, it doesn't really help you decide whether you are making the best decisions for yourself and your own particular circumstances.

Ultimately, and as I'm sure you know, I think you have to do your own research, ask questions of yourself and of others, and ideally become an expert in financial advice, to really, truly answer your original question.

Take, for example, DitheringDad (somebody, please take him ) - an expert. BUT - ultimately an expert firstly for himself and his own family. Sure, he gives great advice on here, BUT, that is not to say what he has done for himself is necessarily right for everybody else. He can only know so much about you, your wants and desires and your expectations, and your concerns.

Ultimately, time only flows in one direction and money cannot buy that time back (that has bitten me on the !!! btw). Oh, and you only live once. But you know these things.

Decide what you want in life, what your OH wants and what you want to do for your kid(s) etc, and if being MF is in there, then get stuck in.

Keep posting and good luck

gtd

beachbeth

GettingThingsDone wrote: »

Hi beachbeth, sorry for hijacking your post!

Thats perfectly alright! I started this thread because I wanted lots of people to jump in with their opinions. Carry on posting!

GettingThingsDone wrote:

Take, for example, DitheringDad (somebody, please take him ) - an expert. BUT - ultimately an expert firstly for himself and his own family. Sure, he gives great advice on here, BUT, that is not to say what he has done for himself is necessarily right for everybody else.

Yes, please take him!:rotfl: Im glad someone else on here thinks that DitheringDad is seeing things from his own financial point of view. He denied it, but he assumed quite a few things about me in his first few posts and then said he was talking generally when it was quite clear he was referring to me!

My family and I went through a period when we were financially strapped for cash even though I had a part time job and my husband was full time and we had been very careful with the sort of house and car we bought. We started married life with a cheap run-about car and bought a small semi-detached even though I would have loved a bigger house and newer car. We had children and couldn't afford a pension and at one point I worked all our income and outgoings and realised we were about £10 a week short of what we needed (£10 doesnt seem a lot now but this was in the 1980's). We were slowly sinking and my husband had to take a 2nd job to keep us afloat.

Anyone who has had a decent job for years which is highly paid will have been able to save, pay off their mortgage and pay into a pension. We could do none of these things. Now that we are a bit better off I am reluctant to over-pay my mortgage because there are things I would like to have that I missed out on during those financially strapped years, eg holiday abroad and a newer car, helping my daughter out at university by paying for her food etc. I know these are mainly frivolous things but you have to have a balance in your life where you can enjoy yourself as well as paying debts (our mortgage is our only debt by the way).

As you say, everyone's situation is different and the sort of salary you are used to earning makes a huge difference as to what your opinion is about paying your mortgage or having a pension.

do_it_today!

Hi all :hello:
I think everyone involved in this thread should try not to take what is being said personally. Ultimately this thread and forum is about support, advice, experience and opinons. Now and again people will make assumptions or make statements that may not be accurate to the circumstance or person however I do believe the intention of everyone's contribution is to be helpful..
I can understand the different points of view given throughout this thread and Beachbeth if you really feel you wouldnt be happy about all your resources and energy into paying your mortgage off quickly then dont. Perhaps set aside a small amount for overpaying mortgage and enjoy the rest. I dont feel things always have to be either or....lets say you only overpay your mortgage by £120 per year as an example ok not massive but over the years you would still have some benefit from paying abit of it off earlier without having to sacrifice the lifestyle you seek.

Basically its all about priorities and you have to decide what yours are even though they may be totally different to everyone else.
I really want to be MF so I dont have to work FT so am making plans to address that However it might also mean I have to stay where I am which Im not thrilled about.... but I have weigh up whats more important to me ie bigger house or more balanced quality of life ie less stress/more time to enjoy life?
your case maybe holidays/ cash and little luxuries or disciplined living mortgage finished quicker. I am sure you could mix a bit of both.

Anyway Good Luck everyone

beachbeth

Dithering_Dad wrote: »

Why oh why do I keep attracting these people? :rolleyes:

I think it was I that attracted you! I started this thread in the first place!

Dithering_Dad wrote:

Someone posts on a MORTAGE FREE WANNABE forum "asking" why it's a good idea why to overpay their mortgage when it's clear as mud that they have no intention of doing so and it's basically a way of having a go that those who do. You answer them and then you get a load of "please take him" abuse, why bother asking the question in the first place? You already seem to know the answers.

Here you go, making assumptions again. I haven't had a "go at you" I just don't agree with your reasons for paying off your mortgage. Other people have posted their reasons for paying off their mortgage early and I can see where they are coming from and agree with them. I just personally don't agree with you. I do not want to get personal, it is you who started making assumptions about me and then posting comments about these assumptions.

I have said in a previous post that I applaud people who work hard, pay their debts and try to get mortgage free. I know I should try to get mortgage free myself but I can't help feeling that we have gone so long being short of money that I now would like to enjoy it for a while.

I wanted to start this thread as a discussion to the pros and cons of paying your mortgage off as soon as possible but Im afraid, DD, that it is you that has made it personal. Eg. your comment about what newspaper I read. If thats not personal I don't know what is.

beachbeth

do_it_today! wrote: »

I dont feel things always have to be either or....lets say you only overpay your mortgage by £120 per year as an example ok not massive but over the years you would still have some benefit from paying abit of it off earlier without having to sacrifice the lifestyle you seek.

Its funny you should say that because this is exactly what we have decided to do. Dithering Dad has assumed we're completely against paying off our mortgage, which we're not. I just wanted a discussion about the pros and cons. We have this very week been to see a mortgage advisor and have discussed overpaying our mortgage by £100 a month. We can still have our foreign holiday and help our daughter at uni and yet overpay our mortgage by this amount. We're not going all out to pay our mortgage off as some people on here are (and again I applaud people who do this - well done!) but we are taking a more middle ground by having a few things that we want and yet still overpaying the mortgage. Its a case of striking a balance.

beachbeth

Dithering_Dad wrote: »

We therefore all come onto the MFW thread and encourage each other - what do you so dislike about that??

When did I say I didn't like that? I have said repeatedly in this thread that I applaud people who endeavour to become debt free and mortgage free. I did not start this thread to discourage anyone or put anyone down for doing this. I wanted everyone's views about it to see if there were reasons for paying your mortgage off that I hadn't thought about and to discuss this.

Dithering_Dad wrote:

If you don't like me, or my MFW pals, then please go elsewhere. There is a whole internet full of forums. Choose one where they have the same views as you and suport each other. We're all very happy here thanks.

Ditto what I said above.

Dithering_Dat wrote:

No doubt your next step will be to post abuse about me onto the MFi3 thread - that seems par for the course...

What is the MFi3 thread? Is this where people go to abuse Dithering Dad? If not, where do people go?:rotfl:

Please note, the above is just a joke - I am not in the business of abusing anyone. I believe that everyone can come onto any of these forums and say "I believe in x, y or z" and can have a civilized discussion as to why others don't without resulting to personal jibes. I see it as a place for bouncing ideas about, discussing things and then, if everyone doesn't agree they can just agree to disagree!

do_it_today!

beachbeth wrote: »

I just wanted a discussion about the pros and cons. We have this very week been to see a mortgage advisor and have discussed overpaying our mortgage by £100 a month. We can still have our foreign holiday and help our daughter at uni and yet overpay our mortgage by this amount. We're not going all out to pay our mortgage off as some people on here are (and again I applaud people who do this - well done!) but we are taking a more middle ground by having a few things that we want and yet still overpaying the mortgage. Its a case of striking a balance.

Thats great! Yes I believe balance is everything! what may be reasonable to one person may not be to another - as long as you are doing whats right for you that is what matters. I am part of MFW3 but my goal is not to clear the whole lot in that time. for me it wouldnt be sustainable at the moment. However if I felt in the best of health I would definitely be tempted to go for it! But you never know with the law of attraction I may end up MF without having to work all hours and stressed out! (NOTE: this comment is not aimed at anyone just my own beliefe as to what it would take to acheive MFI3 for My circumstances! ) - that would be nice!