Wyndham

[Wyndham @Sperandum_Est]

@Nops9090 @wbridgefa Are you a retard?

Financial health matters a lot.

Why would you lose the house if you have stacks of cash on hand?

Have a brain, man.

[Wyndham @Sperandum_Est]

When you write: "Harder to survive a layoff when you have a mortgage", it indicates you do not understand.

Harder than what? Why would having loads of cash on hand (presumably several years' worth of mortgage payments) be harder than no cash and no mortgage?

How are you going to eat?

[Wyndham @Sperandum_Est]

@bejmorri @wbridgefa Well for one there's this thing called closing.

A better way to look at it is this. You have $100 cash in hand and two guaranteed options:

Option A: Earns 3% return

Option B: Earns 5% return

According to you the 3% return is the way to go. Smart.

[Wyndham @Sperandum_Est]

Whoooosh. Over the head. The point is either investment savings or put it all into paying down the mortgage.

Without any income and no savings. How are you going to pay for clothes, food, medicine, electricity, gas.....?

Are you going to cut off pieces of your house and hand them to the grocery store for payment?

[Wyndham @Sperandum_Est]

@Nops9090 @wbridgefa A fool and his money are soon parted.

Good luck, my friend. It seems that is what you are relying on anyway.

[Wyndham @Sperandum_Est]

@GeorgiasGiant @wbridgefa Well then, charge onward in defiance, Don Quixote.

[Wyndham @Sperandum_Est]

@wbridgefa @Nops9090 Likewise. Good luck with those feelings handling your finances. I sincerely hope it works out for you.

[Wyndham @Sperandum_Est]

@Cernovich Physiognomy still undefeated.

[Wyndham @Sperandum_Est]

@wbridgefa @PoleDancingPooh You sure about that, Hoss?
https://t.co/KmSSZWproS

[BowTiedBull.eth - Read Pinned or NGMI @BowTiedBull]

If you have a 3% mortgage note and pay it off early, you're simply giving money to the banks

Dave Ramsey is completely wrong and it's irresponsible to pay it off early

[Wyndham @Sperandum_Est]

@Nops9090 @wbridgefa I think I did recognize the foolishness of allowing your emotions to determine your financial decisions.

[Wyndham @Sperandum_Est]

Isn't this discussion based on current financial market conditions where bond rates are significantly higher than the mortgage interest rates from several years ago where most mortgages are held from today?

Did you know there are securities with a guaranteed return. Currently those are paying at higher rates than the mortgage rates from just 4 years ago.

[Wyndham @Sperandum_Est]

"Unforeseeable financial burdens don't happen to people capable of paying down their mortgage early."

"Like, oh mah gosh, we get it. We could have more money without any risk by doing it the other way, but can't you see our emotions can't handle it," - Some Fool

I am not preventing people from paying off their debts. I don't have that kind of power. I thought this was a rational discussion and not one based on emotions.

Hopefully someone learned something and is better for it. Clearly, it wasn't you.

[Wyndham @Sperandum_Est]

He paid down the mortgage over 5 years. He could have taken the same money and invested it over those same five years (probably 4 years) and after 5 years ended up paying off the same mortgage but with more money left over from the higher returns.

It's just better any way you slice it.

[Wyndham @Sperandum_Est]

OK, I didn't think "having enough money" was the stipulation. I understand if you are loaded, that not having any debt while also having loads of investments and cash on hand is a good place to be. The math still says to not pay down a low interest loan in lieu of higher earning bonds, for example.

If you have enough money (whatever that means) then you have peace of mind. So why not do what allows you to end up with more money down the road?

Isn't it a question of which is better: invest excess money with higher returns or pay down a low interest debt early? Which implies all or nothing. Not both at the same time.

If we were talking about someone with a mortgage of 8% then I would change my analysis a bit, because it cancels out the HELOC penalty (although there still are closing costs) and there are not any guaranteed investments earning more.

[Wyndham @Sperandum_Est]

If he could have done it by paying down his mortgage, he could have done the same thing by investing but with better returns.

You realize he could have invested the same money, then liquidate investments and pay off the same mortgage after 5 years.

The difference being he is holding more cash because of the higher investment earnings?

[Wyndham @Sperandum_Est]

That’s fine. It’s just that it is financial ignorance.

Then all your money is tied up into your house. If you need the money for some unforeseen reason, you will have to refinance it at the current 7.5% rate. Where is the peace of mind in that?

In the end, you are costing yourself additional earnings and subjecting yourself to a scenario where you will end up with a new mortgage with a 7.5% rate.

[Wyndham @Sperandum_Est]

Not a flex.

If you ever find yourself in a pinch and need cash that exceeds your monthly income or revolving credit you are screwed.

All you have done is hamstrung yourself by tying up your excess cash into a home that is not easily accessed without having to refinance to the current 7.5%.

Compounding it is the fact that you could have earned/saved more money by putting excess cash into investments.

[Wyndham @Sperandum_Est]

The risk is tying your money up in a house that you can’t access without taking out a HELOC.

If you do take a HELOC, congratulations. You just cancelled your 3% and are now faced with 7.5% and a new term.

If you are paying the loan early, you are using excess cash that would make higher returns for you than the 3% savings on interest.

Furthermore the investments can easily be liquidated if you find yourself in a pinch.

[Wyndham @Sperandum_Est]

@EunuchEthiopian Nope. Try again. But this time construct an argument that isn’t a slobbering mess of gibberish.

[Wyndham @Sperandum_Est]

Why would you lose your home if you have easily liquidated investments?

Why wouldn’t you just sell the assets if you find yourself in a pinch?

If all your money is in your house, and you find yourself in a pinch, then your only recourse is a HELOC. Now you have a new mortgage with a higher interest rate.