katieuk

Were those the things that our parents bought back in the 70's?

Ray

Probably ...

katieuk

Well, it could be worse right now..we could all be living in a ditch.

BritGuyTN

SHIT!! Oh My God!!!!

I have an adjustable rate mortgage!!!!!!

Oh ****ing hell, I have an interest only mortgage!!!!

I guess I should just declare bankruptcy now

I guess I just need to panic more

I'm doing fine - my arm is a 7 year fixed rate. I would rather invest my money than pay off the principle on my mortgage.

Steerpike

It costs me about $40-50k per year to live - that is my true 'actual cash outlay' - for groceries, gas, dining out, vacation, auto-insurance, property insurance, property tax, home-upkeep, mortgage, and so on.

I have only one source of income - my job. If my job is lost, I suddenly have to pay that $40-50k per year from savings.

So without a job, that $100k pays for 2+ years of living expenses - and after 2 years I hopefully have another job.

If I were to take that $100k out of the bank now and pay off my mortgage, I would reduce my annual outlay from $40-50k to $30-40k; but if I now lose my job, where do I find that $30-40k? I don't have that $100k in the bank any more.

Obviously - Ray - if you don't work, I would assume you have enough money in the bank to pay for your anticipated expenses for the forseable future, so it makes no sense for YOU to have a mortgage - but for those of us still working to build our nest-egg, we are not 'there yet' and thus, need to maintain a buffer against short-term adversity.

Ray

I just don't see that ..but as I said ..I am a simple person ..
i see that if the house is paidfor ..you aint gonna be homeless .. you can always find enough money to feed you ..

lapin_windstar

We used to dream of living in a ditch. It would have been like a palace to us.

Taffyles

I agree- if you are paying taxes it doesn't make any sense to use all your savings to pay off a mortgage. In this financial climate, I think people who depend on a wage should aim to have at least a year's living expenses in savings- preferably two years. Things are likely to get much worse.

We are doing the same thing spike- we could pay off the mortgage on our home (and lose the big tax break we get). My hubby was forced into retirement early this year (after 17 years with the company) came out of the blue and with only a months notice- being Florida the pay off he got was the bare minimum - we'd have been without food and utilities if we did not have savings readily available- having no mortgage payment would not have helped one iota. The real peace of mind came with the savings we had. We could pay all our bills, including the mortgage, and eat and not panic as we had some hard cash behind us. Hubby was offered another job after about two months but for much lower salary- Chinese firm though so probably much more secure than any US company right now!! Pay off your mortgage AFTER you have built a safety net in savings. We are also moving our savings around into FDIC accounts (and a firesafe box in the closet) and to be honest as much as we can to British banks now that the pound has weakened. When we have to retire fully we are out of here...back to the UK for us.

Unlike the UK there is no government safety net here for people laid off (unless you're a fat cat executive on Wall street that is).

Oh and a word about social security for anyone who's interested. Hubby had deferred his to get a better payment, he decided to claim it last month. They backdated his claim to february- to give him a lump sum they said (aww how nice..while saving themselves XXX amount of years of higher monthly payments!!) So this sum paid up until the end of August. Apparently September is held in hand no payment, and regular monthly payments start in October (the third week in October because his birthdate is the 28th) -, so no payment for 7 weeks....and there's more, the payment is rounded DOWN...presumably the government doesn't have computers that can handle a decimal point! How much are they making off retirees rounded down payments, I wonder. Not to mention the month "in hand". Then well over a $100 is deducted from every monthly payment for part b medicare or whatever....plus hubby has to have a private supplemental insurance (cheapest was AARP) costing $165 a month. So he's paying more for health insurance now that he can claim Medicare...typical of this country. See that little figure (estimated payment) on your social security statement- you don't get anywhere near it.

His British pension OTOH. Backdated to date his claim received -any lump sum paid straight away, payments start immediately (either weekly or every 4 weeks) and it seems British computers can handle decimal points as the payment is as is and not rounded down. And of course if you live in UK no F#### nonsense about medicare (which is actually no benefit, its yet another rip off). No wonder you see retirees working till they snuff it in this country.

Steerpike

This is roughly where my money goes:
$15k/yr Mortgage
$4k /yr Prop. Tax
$1k /yr Prop. Insurance
$2k /yr Prop. maintenance reserve (repairs/etc)
$0k /yr Auto Payments (pay cash for cars)
$1k /yr Auto Insurance
$1k /yr Auto Gasoline (this was before recent hikes!)
$3k /yr Gas/electric/Water/phone/TV/refuse/etc
$4k /yr food/groceries/dining out
$4k /yr vacation
$4k /yr cash for casual purchases (lunch, etc)
$2k /yr gifts / etc
$3k /yr medical insurance (probably way too low)
$1k /yr misc other stuff

So that's $45k total, of which $15k is mortgage. If I pay off the mortgage, none of the other costs goes down - so I still have to find $30k/yr. Yes, some costs are 'discretionary' (vacation, gifts) and some are possibly extravagant (dining out), but I think it's reasonable. I'm also assuming no contribution to savings / retirement during this time.

So - If I pay off the mortgage, I still have to find $30k/year and I'm suggesting it is better to keep that $100k on hand, and have a guaranteed 2 years of costs in reserve. I won't be homeless as long as I can make that monthly payment; no matter what happens in the market, that is a predictable and stable expense.

md95065

Not if you can't pay your property taxes ...

Steerpike

We went to one of our favorite 'ethnic' restaurants last night - a Peruvian 'hole-in-the-wall' popular with the local hispanics. At 7pm, the place was completely empty - not one table occupied. My g/f was not willing to go into a totally dead place on a Saturday night out (half the fun is the place is 'hopping' with lively locals - though I would have sat alone, as the food is awesome). So we drove across town to another Peruvian place we know about (I was craving Pollo Saltado), but never visited; it was closed (out of business). We ended up at our favorite Goan/Indian place, which used to be packed; we were one of only 4 tables occupied.

So this tells me the economy is not doing too well!

Juswus

exactly.

fatbrit

Your only options are not to pay off the mortgage or not. Look at diverting some extra cash to reducing the term of your mortgage provided there is no ppp as a compromise.

bevinva

I really feel for those in the restaurant business at the moment. I know we don't eat out that much at the moment. Yesterday I told my OH how much I was going to enjoy my next "I don't care how much it costs meal". It will probably be at www.crocs19thstreetbistro.com which i mentioned in another thread, not the most expensive place in the area but soooo good.

Taffyles

I was driving my granddaughter back from Sarasota this evening and suggested we call into our favourite ice-cream place. It was closed up- all fittings taken out. This place has been there for the last 17 years that I know of- gone. We found a Starbucks in what used to be a very busy strip mall. The Mall was deserted and we were the only ones in Starbucks. There are signs of recession everywhere you look, here, and have been for a long time. BIG stores shutting down- unemployment very high here. People being laid off every week almost- no -one spending. The only other time I can remember Malls being so empty in the last 20 years was just after 9/11.