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Mortgage; pay extra or wait to sell?

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So, wifey and I are now homeowners and we're lucky enough to have a mortgage that affords us a bit of financial flexibility. My question for those that have been there and done that: from a $$$ perspective, would it make more sense to pay extra into the principal every month (bi-monthly) or to just pay the minimum while waiting to sell the house?

 

Our new/first home, isn't a "forever home" and we'd be VERY open to selling in 5 years or so, or whenever CA real estate prices shoot through the roof for no-good-reason again. So, knowing that we wouldn't want to stay there for 30-40 years would we basically be wasting money by paying extra into principal every month, knowing that we plan to sell as soon as it's feasible??

Edited by bobgodd

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Depends. Do you forsee the property increasing in value? The last thing you want is to find yourself in the position to sell when you owe more than your home is worth. I'm not sure where CA property values are right now, but if they're increasing finally, I'd just pay the payment for now. Maybe someone who knows more about the area can chime in. :unsure:

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You left out the most important part for this question. What are you going to do with the money if you don't it put towards reducing your mortgage balance? Unless you're paying down other debts, or investing it elsewhere, you're likely better off paying down the mortgage from a purely financial standpoint.

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If you have other debts at a higher APR than the mortgage, pay those off first. Or if you can invest the money and earn a higher return than the mortgage APR, do that. Of course like Frost said you want to be sure to be rightside up on the house when you go to sell.

Edited by mk_378

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Well we wouldn't plan to sell unless we would stand to gain from it... Otherwise I don't think there would be a good enough reason to sell. The plan is to stay in this area as long as we need to, to see the prices go back up. Low purchase price and low APRr feels like (in my rookie home-owner opinion) it gives us a lot of options.

 

Her car will be paid off shortly, mine will take a bit more time... other than that, no other debt. The extra money we would be putting into the mortgage would almost definitely go into the cars, and then probably into some type of investment. I guess that was sort of the answer I was trying to find out; if we invested the money at a better rate than we would be losing to the home's APR, would it be worth it? Since I have zero experience in this realm, I needed more proof than my intuition.

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You didn't say how old the house is.

 

One thing about home ownership.....things break. From my personal experience, they tend to break at the most inconvenient time (like when I don't have the money in hand to fix it).

 

Before you play with the extra money, make sure you have a fund set up for repairs. (this also includes repairs/replacement of yard maintenance equipment)

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You didn't say how old the house is.

 

One thing about home ownership.....things break. From my personal experience, they tend to break at the most inconvenient time (like when I don't have the money in hand to fix it).

 

Before you play with the extra money, make sure you have a fund set up for repairs. (this also includes repairs/replacement of yard maintenance equipment)

I think anytime something breaks it's inconvenient lol, but I get what you mean.

 

The house was built in 1971 and is a flip. We don't even own yard maintenance equipment :lol: we'll be buying that stuff next weekend probably.

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I would suggest building up a savings account; pay off the vehicles, and then look at either paying down/off the principle. Things to consider, the Mortgage interest is a tax write off, and paying down the principle is always going to put you in a position where you own more of the house than you owe on it. :dntknw:

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You didn't say how old the house is.

 

One thing about home ownership.....things break. From my personal experience, they tend to break at the most inconvenient time (like when I don't have the money in hand to fix it).

 

Before you play with the extra money, make sure you have a fund set up for repairs. (this also includes repairs/replacement of yard maintenance equipment)

I think anytime something breaks it's inconvenient lol, but I get what you mean.

 

The house was built in 1971 and is a flip. We don't even own yard maintenance equipment :lol: we'll be buying that stuff next weekend probably.

I'm not sure where you live, but summer is winding down. You may want to swing for having someone do your yard for the next few weeks and then buy a mower in the spring. If you do buy one now, make sure you do your winterizing (or whatever it is called) once you have used it for the last time this year. You'd be surprised how many mowers die over the winter.

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You didn't say how old the house is.

 

One thing about home ownership.....things break. From my personal experience, they tend to break at the most inconvenient time (like when I don't have the money in hand to fix it).

 

Before you play with the extra money, make sure you have a fund set up for repairs. (this also includes repairs/replacement of yard maintenance equipment)

I think anytime something breaks it's inconvenient lol, but I get what you mean.

 

The house was built in 1971 and is a flip. We don't even own yard maintenance equipment :lol: we'll be buying that stuff next weekend probably.

I'm not sure where you live, but summer is winding down. You may want to swing for having someone do your yard for the next few weeks and then buy a mower in the spring. If you do buy one now, make sure you do your winterizing (or whatever it is called) once you have used it for the last time this year. You'd be surprised how many mowers die over the winter.

I live in San Diego County, we don't really get harsh winters 'round these parts. I just assumed that I'll have to do yard maintenance year-round. I've been looking at used mowers on craigslist and they are surprisingly cheap. We wouldn't need anything fancy, our yards are uber small.

 

There are some small projects I'd like to complete so maybe we'll start building a project fund. I want to replace all the sliding patio doors (3) and do some other neato overambitious-home-owner-tim-the-toolman-taylor type stuff.

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My lawn mower came from Craigslist. $25. I bought it 3 years ago and it still starts on the first pull every time. I've never winterized it, either. I've changed the oil once. I love Craigslist.

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A while back I went ahead and doubled Mortgage payments...I calculate in about 48 months, God willing, it will be paid off, and I will either take the equity or use the rental income...I want to be retired early, and living on some hot tropical island...evaluating Baywatch type buff blokes on the beach every morning..

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A while back I went ahead and doubled Mortgage payments...I calculate in about 48 months, God willing, it will be paid off, and I will either take the equity or use the rental income...I want to be retired early, and living on some hot tropical island...evaluating Baywatch type buff blokes on the beach every morning..

 

 

God that sounds wonderful... can I come help you on occasion? :grin:

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A while back I went ahead and doubled Mortgage payments...I calculate in about 48 months, God willing, it will be paid off, and I will either take the equity or use the rental income...I want to be retired early, and living on some hot tropical island...evaluating Baywatch type buff blokes on the beach every morning..

 

God that sounds wonderful... can I come help you on occasion? :grin:

You can help me double my mortgage payment any time you want.

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A while back I went ahead and doubled Mortgage payments...I calculate in about 48 months, God willing, it will be paid off, and I will either take the equity or use the rental income...I want to be retired early, and living on some hot tropical island...evaluating Baywatch type buff blokes on the beach every morning..

 

God that sounds wonderful... can I come help you on occasion? :grin:

You can help me double my mortgage payment any time you want.

 

:mellow:

I was referring to her last bit.

:lol:

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You didn't say how old the house is.

 

One thing about home ownership.....things break. From my personal experience, they tend to break at the most inconvenient time (like when I don't have the money in hand to fix it).

 

Before you play with the extra money, make sure you have a fund set up for repairs. (this also includes repairs/replacement of yard maintenance equipment)

I think anytime something breaks it's inconvenient lol, but I get what you mean.

 

The house was built in 1971 and is a flip. We don't even own yard maintenance equipment :lol: we'll be buying that stuff next weekend probably.

I'm not sure where you live, but summer is winding down. You may want to swing for having someone do your yard for the next few weeks and then buy a mower in the spring. If you do buy one now, make sure you do your winterizing (or whatever it is called) once you have used it for the last time this year. You'd be surprised how many mowers die over the winter.

I live in San Diego County, we don't really get harsh winters 'round these parts. I just assumed that I'll have to do yard maintenance year-round. I've been looking at used mowers on craigslist and they are surprisingly cheap. We wouldn't need anything fancy, our yards are uber small.

 

There are some small projects I'd like to complete so maybe we'll start building a project fund. I want to replace all the sliding patio doors (3) and do some other neato overambitious-home-owner-tim-the-toolman-taylor type stuff.

Paying down mortgage is an admirable goal. Instead of paying extra on ours, we are paying off cc's and auto loan, as well as putting in savings. Once the cc's and auto are done, we will probably convert to bi-weekly mortgage to pay off faster.

Congrats to you and DW for your first home purchase, how exciting!!! Post some pics!!!! I love looking at homes! :clapping:

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