Changing priorities
Our money priority for the last year or so has been paying off our mortgage, and we’ve been making quite a bit of progress at it. We’d been paying nearly double toward it recently. But we’re shifting priorities now (at least temporarily) to accumulating short & mid-term funds instead.
Why? We’re considering thinking about moving in the next 5 years or so, and if we do that, it doesn’t make sense any longer to pay off the mortgage. So this will probably be the last month that we’ll pay anything additional to the mortgage, and I feel strangely sad about that.
I know it makes sense to step back, but emotionally it feels like I’m giving up something I enjoy. (It’s sort of funny that I actually enjoyed making additional payments.) And, I hate owing money, so that’s probably part of it as well. I don’t like it when my emotions and my knowledge conflict. Usually my emotions are correct, but in this case I realize that I can’t have both things as quickly as I’d like.
I guess it’s time to start on research, and then revise goals accordingly. If we do end up moving, with luck we’ll move to a lower cost of living area and the end result will be the same — no mortgage. If we don’t end up moving, we’ll have a sum that we can either continue investing or apply to the mortgage.
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November 13th, 2007 at 8:15 am
Nothing wrong with changing priorities. If you’re not going to pay down your mortgage, invest, save, spend some - just don’t waste it.
My question is - why are you thinking about maybe moving in 5 years? Why not 2 or 10? Truthfully, having lived lots of places, you just can’t tell what the cost of living will be in 5 years. Florida used to be a great place to retire, then the housing prices & cost of water exploded. Now the housing market is in the pits, the cost of water is still going up (& there’s not much of it, our county only has 70 days left), grocery prices have gone up, gas is up and unemployment has risen to 6% in our county. Not the ‘paradise’ it was just 5 years ago.
Somewhere I read (maybe in DIE BROKE) you should buy your last house first. Unless the neighborhood goes drastically downhill there may not be a reason to move.
November 13th, 2007 at 3:40 pm
Where are you thinking of moving to? Why the change?
November 13th, 2007 at 4:21 pm
Bellen, 2 is out of the question for legal reasons. 5 seems to be about the soonest.
MSMomsmoney, we don’t have anywhere in particular in mind. As for why, this just doesn’t seem like the best place to live in general, although the weather is nice much of the time.
At any rate, we’re only thinking about considering it. But until we know, it makes more sense to just save the money.
November 13th, 2007 at 8:58 pm
Why does the fact that you might move change things? You’ll be paying less in interest, you’ll make more when you sell the house, and if you decide to stay, you’ll be closer to your goal…
Am I missing a reason NOT to payoff the house?
Just a little confused…
NCN
November 14th, 2007 at 6:23 am
NCN, our mortgage interest is so low that the difference between what we can earn in an online account and what we pay is about half a percent. While normally I’m all for an extra half percent, since we don’t know what house prices will be like in the future, I’d rather be sure to have my money + interest than pay the house off and possibly lose a little. Besides, if we decide that this isn’t the way to go, we can just make a lump sum payment to the house.