https://boards.hellobee.com/ Pregnancy, Baby and Parenting blog, by Hellobee en Wed, 15 Apr 2026 23:13:42 +0000 https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692929 Tue, 07 Feb 2017 11:01:08 +0000 KayKay 2692929@https://boards.hellobee.com/ <p>I wouldn't. But that's because our house is not our forever home and the market here is nuts so it woild be easy to sell if we wanted/needed cash. I also am not averse to "good debts of the sort that is at a super low interest rate, gets us more tax deductions, etc. There are both more fun (life is short!) and better financial things for us to do with it. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692856 Tue, 07 Feb 2017 10:04:37 +0000 Anagram 2692856@https://boards.hellobee.com/ <p>@jetsa: I think probably your upbringing (having less) is what drives you to be conservative with financial risk and to want to pay off a house because it feels more secure. And there's nothing wrong with that. My husband is similar because he grew up in the midst of a civil war, and his parents had to leave everything they had and move/immigrate twice in his life. And then they started all over. So he saw first hand how his parents frugality quite literally saved their lives and he's driven to keep a very secure financial environment for himself, because on some level, he's always planning for a massive disaster.</p> <p>I grew up here in a very stable middle class family. And while I didn't get *everything* I wanted, I got most of it. So my gut feeling is always that the economy will remain almost the same, jobs will always be there, we'll have good health--even though, of course, I can't know any of that! But on some level, I'm always counting on a stable/secure country and economy.</p> <p>Knowing yourself and your motivations and what makes you feel comfortable financially is probably the first step to making your plans. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692774 Tue, 07 Feb 2017 08:13:46 +0000 jetsa 2692774@https://boards.hellobee.com/ <p>@psw27: @winniebee: @yoursilverlining: @PawPrints: @brownepiano: @Mrs. Goose: @Truth Bombs: @looch: Thanks for all the advice ladies, It sounds like I probably need to get 529s set up and re-evaluate paying off the mortgage after that is complete. We are still discussing it, like @Anagram: my husband is all for paying off the house, asap.</p> <p>@Pollywog: The mortgage deduction on our taxes is a wash compared to the savings in interest for us.</p> <p>@Anagram: that is a good point, our nanny is great but over time her need will go down and we have super flexible jobs so we won't necessarily need to keep her once both kids are in K. Pre-K around here in just 2.5 hours so we still need her for the next 3 years but that means we could take her salary and push it into 529s. I also think we need to look at what 529s are realistically making, I know we are getting around 8% on our retirement but we've been told long tern 6% is a good return. My husband has an MBA from a top 10 business school and I tend to leave the biggest financial decisions to him after discussion. Give me a water or sewer plant and I'm your person, but long term financial just makes my head spin LOL.</p> <p>@Littlebit7: This is a great question to think about as well.</p> <p>@codeitall: I agree with everything you said.</p> <p>@hummusgirl: I agree, I don't like it hanging over us even if its "not bad"</p> <p>@gingerbebe: There are so many of these money and kids questions I wonder about. My husband and I came from very little, and in comparison to our upbringing we might as well have millions which we realize so how do we raise conscious children and not spoiled brats. We are already planning trips to iceland to see the northern lights for when J's 7 and 14. These are things that our parents couldn't afford to do now, so we are stuck on the right way to frame it.</p> <p>@PawPrints: You framed it exactly correct, I say penny pinching and mean comfortable-and-happy-but-not-too-spendy lifestyle. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692733 Mon, 06 Feb 2017 22:22:18 +0000 Pollywog 2692733@https://boards.hellobee.com/ <p>Not sure your income bracket, but our financial planner said the mortgage interest deduction combined with compounding interest on college savings and retirement made it a no brainier in our case. We refinanced to a 15 year mortgage (saved 2 percentage points) and are maxing out retirement and college savings now. We have a ridiculous amount in emergency savings (current beef with DH is that 2 years of funds should not sit in the checking account and show up on my ATM receipt!) . We will pay off the house when LO is 13. We could have it paid off in 2 years if we reprioritized our spending. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692729 Mon, 06 Feb 2017 21:58:53 +0000 Anagram 2692729@https://boards.hellobee.com/ <p>@jetsa: Well, I posted about something similar-ish earlier My husband would say pay off the house! I would say, if you have everything else lined up, why not pay off the house? But yeah, it would depend on how extreme the pinching pennies phase is. I've been slightly unhappy with the amount of penny pinching we have been doing lately, so I want to come to a compromise with my husband and meet somewhere in the middle.</p> <p>We already fully fund 401ks, and my pension, and Dh has a few IRAs and mutual funds. We have the liquid savings, 6 months-1 year. The only thing we don't have is a big 529 fund for the girls, so I think we will have to sit down and run some numbers and look at actual return rates of various 529 plans lately and compare what we could be making in a 529 to what we will save in interest by paying off the mortgage 20 years early. </p> <p>We also have to figure out childcare for next school year. Since we could put our kids in aftercare/full time daycare instead of have our nanny and save 1k a month, theoretically we could continue to pay off the house super fast and have 1k a month to put into a college fund starting in Sept. But I have to figure out if I can mentally take the hamster wheel of 1 hour commute each way, two kids, two full time working parents with very inflexible jobs, two different drop offs and pick ups, etc etc etc. </p> <p>That's where I have to try to quantify the importance of my happiness vs the importance of making the best financial decisions. And I also have to factor in my husband's happiness, when the things that make us happy are at odds with each other, haha.</p> <p>It's tough! One good thing is you can make a decision for now and then make changes if it isn't working out. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692712 Mon, 06 Feb 2017 21:10:42 +0000 SweetCaroline 2692712@https://boards.hellobee.com/ <p>Thanks for this interesting post! We are in a similar position right now and on pace to pay off our house in 2-5 years, depending on the decisions we make. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692695 Mon, 06 Feb 2017 20:27:00 +0000 Littlebit7 2692695@https://boards.hellobee.com/ <p>What is the status of the liquidity of your savings? As in, if you needed 10K, 15K, 20K, 50K etc etc, IMMEDIATLEY could you easily pull it out for an emergency? If there was a job loss? If you have an emergency fund, should it be larger than it is? And is the money you have saved easily accessible?<br /> I'd lean towards not paying off the mortgage unless you could feel totally comfortable pulling a lot of money out of savings at once if you needed to. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692659 Mon, 06 Feb 2017 19:08:03 +0000 Mama Bird 2692659@https://boards.hellobee.com/ <p>That depends on whether you can write off your mortgage interest on your taxes - I don't fully understand that bit, but from what I can tell at some point, as the interest you pay per year drops, the standard deduction that you can take no matter what gets bigger than the interest and keeping the mortgage for this reason is no longer worth it. Maybe someone else can explain this better.</p> <p>Also depends on whether you can make that money earn more than 4% if you don't put it toward the mortgage. I don't think my investment account has done quite that well lately. The retirement account might be making better money but considering it's for much later... it's probably just keeping up with inflation.</p> <p>As for college and retirement funds, you can probably catch up once you don't have the mortgage! </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692558 Mon, 06 Feb 2017 16:04:17 +0000 codeitall 2692558@https://boards.hellobee.com/ <p>I don't have a mortgage, so maybe take it with a grain of salt, but if you have any place to put money to compound and to save for the future, to me, that takes priority over paying off a mortgage (especially with a fairly low interest rate) early. Simply because the value of compounding starts early.</p> <p>Sounds like you've done everything on that front except 529s, so I'd figure out how much you want to put in the 529s and roll the rest into extra payments.</p> <p>There's nothing wrong with penny pinching, but if you see opportunities to make memories on reasonably-priced vacations, that will be worth more than having a house paid off really early. At least it would be to me! </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692534 Mon, 06 Feb 2017 15:41:12 +0000 hummusgirl 2692534@https://boards.hellobee.com/ <p>I would in a heartbeat! But debt weighs heavily on my mind so it would be worth it to me, even if it's not financially the best. It would feel so good to be completely debt free. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692520 Mon, 06 Feb 2017 15:30:00 +0000 gingerbebe 2692520@https://boards.hellobee.com/ <p>One other part of this you may not have considered is the educational value of the exercise to your children. DH and I debate this from time to time - the pros and cons of pinching those pennies now while the kids are young and don't really notice "going without" or growing your wealth a little more slowly as your family grows and have your kids actually witness and see all the hard work it takes to be financially savvy. There's no wrong or right way, but its something to ponder.</p> <p>I think it would be really cool for my kids to remember working hard to reach a huge family milestone - to be able to involve my kids in things like "TODAY IS THE DAY WE PAY THE BANK TO BUY OUR HOUSE FOREVER!" or whatever. Or working together to save coins to fill a big jar for vacations. </p> <p>Also, I think vacations are important for the adults to motivate and recharge, but I don't really think they are that important for kids until they are like school age. Like its great if we can do it, but I'm not heartbroken if my kids don't get a big fat vacation until they are like 5 or older. They would be just as happy with day trips and good quality family time until then. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692507 Mon, 06 Feb 2017 15:21:40 +0000 yoursilverlining 2692507@https://boards.hellobee.com/ <p>No; I wouldn't. As tempting as having no mortgage would be, I would not do it at the expense of no vacations or other "splurges" which are super important to me in order to have a happy life and happy home. I would look for a balance. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692506 Mon, 06 Feb 2017 15:21:21 +0000 winniebee 2692506@https://boards.hellobee.com/ <p>@PurplePumps: agree - financially refi makes sense even if you save .25% -- that's if you get a deal with no points and no closing costs. it takes some time to get together the paperwork needed but if it's "free" there's really no reason not to? </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692499 Mon, 06 Feb 2017 15:16:10 +0000 PurplePumps 2692499@https://boards.hellobee.com/ <p>No, I wouldn't. We have enough cash to pay off our house today if we wanted to, but don't think it's worth it to lose out on the investment opportunity of that cash and to lose the comfort of that savings buffer. The way we see it, the mortgage payment amount will only get easier as we continue to get raises at work, as inflation goes up, the "value" of the mortgage essential decreases as well, our investments beat the interest rate and we get to write off the interest payment anyways.</p> <p>I also disagree that the rate has to drop 1+% to be worth while. We refied twice to save "just" 0.75% and each time, the calculations showed that it was definitely worth it (assuming we made no early payments, which we have no plans to do). </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692488 Mon, 06 Feb 2017 15:06:10 +0000 winniebee 2692488@https://boards.hellobee.com/ <p>With some caveats.</p> <p>I would make sure we had 6 months of living expenses in savings.</p> <p>I would pay off any other debt.</p> <p>I would make sure that our retirement funds were maxed out annually.</p> <p>I would put a modest amount in the kids 529 plans.</p> <p>I would roll the rest into paying down the mortgage as soon as possible. </p> <p>Nice work!! </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692484 Mon, 06 Feb 2017 15:04:52 +0000 psw27 2692484@https://boards.hellobee.com/ <p>I think others have given you smart advice. Personally, paying off our mortgage is not our priority. It sounds like you are extremely smart/conservative with your saving but I would not give up saving for college, a bigger emergency stash and (precious!) vacations with my family. I say find a middle ground that makes you happy and enjoy a little bit of financial freedom/fun expenses! </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692468 Mon, 06 Feb 2017 14:56:58 +0000 gingerbebe 2692468@https://boards.hellobee.com/ <p>@jetsa: I totally get it - being debt free is our dream/goal too. But a lot of things can happen in 5 years! I would get very good long term disability and life insurance plans for both of you if you haven't already snagged it at the low rates you'd get at this age and yeah I would put a fat piece into college savings. If you put $5000 down now it will probably triple in the next 15 years at returns higher than your mortgage. If your plan was 10 years, then shoot for 7 which is still cutting your timeline and putting a chunk away for your kids. It's like free money. In a few years you can refi on an 3 or 5 year ARM mortgage and just pay it off before the rate jumps to save more money. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692463 Mon, 06 Feb 2017 14:54:05 +0000 LBee 2692463@https://boards.hellobee.com/ <p>@jetsa: I want to qualify this by saying I'm incredibly conservative and tend to be a worst case planner. I've seen people refi and get in really sticky situations. I also tend to think that there is good debt and owning a house is one. I also just wouldn't want to pinch pennies (when people see this I imagine an extreme, which might not be the case for you) when my children are young for a goal that isn't 100% necessary right now. I tell clients to have their house paid off by retirement -- that my school of thought is to hit the first linebacker coming at you (aka education). </p> <p>And when all else fails, as it relates to what @truthbombs: said, I whole heartedly agree with Warren Buffett who says he'd be hard pressed to bet against the US stock market. I think having money in the kids' 529s and splitting the difference makes a lot of sense. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692459 Mon, 06 Feb 2017 14:50:45 +0000 PawPrints 2692459@https://boards.hellobee.com/ <p>I voted bananas. You should definitely continue "pinching pennies" e.g. continuing your comfortable-and-happy-but-not-too-spendy lifestyle, but I would use the money for a more savvy purpose than paying off a low-interest mortgage. A good 529 will pay off much better, since college costs are going to skyrocket between now and when your LO will attend, and retirement savings should also be a priority. I would definitely pay more than just your minimum mortgage payment every month, but not as aggressive a schedule as 5 year payoff would require. There are smarter ways to invest your money. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692458 Mon, 06 Feb 2017 14:50:11 +0000 jetsa 2692458@https://boards.hellobee.com/ <p>@LBee: that makes complete sense, and truthfully more doable in the long run. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692447 Mon, 06 Feb 2017 14:43:57 +0000 LBee 2692447@https://boards.hellobee.com/ <p>@jetsa: I assumed you would have to in order to cover college costs. If you have figured out how to make all of your priorities work and the interest savings outweighs the college cost earnings, then go for it.</p> <p>ETA: Just saw your edits. I personally would make extra principal payments and find a middle ground. It's much easier to skip a month for a vacation, etc and still make a considerable impact on your mortgage. Depending on what kind of numbers we're talking, it's hard for me to gauge whether the $22k in interest would be made up for in lost college cost savings. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692439 Mon, 06 Feb 2017 14:38:14 +0000 jetsa 2692439@https://boards.hellobee.com/ <p>@LBee: why would we need to borrow against it? and while interest rates may be low, the house we just paid off was 2.5% so I have to remind myself 4% isn't bad lol. We currently have a 30 year loan, we actually intended to refi to a 10 or 15 but we were told unless we could save 1%-1.5% it wasn't worth it long term.</p> <p>@gingerbebe: 10 years was the original plan and then the idea of being completely debt free by 35 and 40 made us think it might be worth it. 5 year is such a short period of time we are strongly considering it plus we would save 22K in interest. The compounding of the college funds is the biggest thing that gives me pause, as you guessed above our retirement is fully funded, we have no other debt, and we have an emergency fund.. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692436 Mon, 06 Feb 2017 14:36:12 +0000 brownepiano 2692436@https://boards.hellobee.com/ <p>The thought of having my house paid off well before college and retirement years sounds amazing. It is really hard to live in penny pinching mode forever though. I do well when I can celebrate savings milestones along the way. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692434 Mon, 06 Feb 2017 14:34:42 +0000 peachykeen 2692434@https://boards.hellobee.com/ <p>@gingerbebe: said exactly my thoughts. Little benefit to paying it off that quickly at such a hit to your standard of living. Make those vacation memories with your little family! </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692433 Mon, 06 Feb 2017 14:34:05 +0000 Truth Bombs 2692433@https://boards.hellobee.com/ <p>Not at the expense of retirement and college account funding. Those things, if invested well, should average greater than 4.125% annually so it doesn't make financial sense to pay down the loan rather than invest. That being said, you have to commit that the money that would have gone towards paying down the house will instead be invested. If you are just going to spend it, then yes, you're better off to pay down the house. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692432 Mon, 06 Feb 2017 14:33:48 +0000 looch 2692432@https://boards.hellobee.com/ <p>Right now, no, I would not pay of the balance of my mortgage loan. The financial markets are too jittery right now. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692428 Mon, 06 Feb 2017 14:32:39 +0000 LBee 2692428@https://boards.hellobee.com/ <p>You are only able to get equity out of the house if you sell it or borrow against it. It makes no sense to me from a financial standpoint to pay off a home at a reasonable interest rate if you know 100% you will have to borrow from that equity in the future. Interest rates are the lowest they have ever been and undoubtedly you will have to borrow that equity at a higher coupon. </p> <p>I think there is definitely a middle ground as @gingerbebe: alluded to. I would feel uncomfortable with a client doing as you are describing, especially if it put them in a situation where most of their net worth was inside their home.</p> <p>What is your current mortgage time period? I would consider refing it to a amount you can comfortably do (maybe throwing in some more cash to bring it down) and then start back saving towards education. I think your rate would be around 3.5% if you did a 15 year. This is also assuming you have a healthy emergency reserve and are taking full advantage of all retirement matches provided by your employer. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692426 Mon, 06 Feb 2017 14:29:49 +0000 Mrs. Goose 2692426@https://boards.hellobee.com/ <p>I would 100% pay off the house in 5 years if I could. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692420 Mon, 06 Feb 2017 14:25:34 +0000 gingerbebe 2692420@https://boards.hellobee.com/ <p>I'd split the baby and look to pay it off in 10 years. I'd put a decent chunk into college savings for each child as an egg to grow for compounding purposes and throw the rest at the mortgage. This is assuming however that you have no other debt, you have an emergency fund, and your retirement is currently being fully funded. I might put aside $2-3K to go on a family vacation and maybe save some money creatively over the next year or two and do a great vacation in the near future. </p> https://boards.hellobee.com/topic/if-you-could-pay-off-your-house-in-5-years-would-you-do-it#post-2692408 Mon, 06 Feb 2017 14:09:56 +0000 jetsa 2692408@https://boards.hellobee.com/ <p>We've owned 2 homes for the last 18 months and the old one just sold if we roll all of the money into paying on our current loan at a 4.125% interest rate we could be completely debt free in 5 years.</p> <p>Background info: The last 18 months we have counted our pennies and not really vacationed unless it was just pulling our pop-up camper somewhere. We also have not contributed to our kids college funds (they're 1 and 3) and in order to pay it off in 5 years we wouldn't be able to but we would have plenty of money to do so once we paid off the house. </p>