What is the Point of Owning a Home With a Paid Off Mortgage?
What is the Point of Owning a Home With a Paid Off Mortgage?
When people spend year after year putting in 60-hour weeks at their salaried jobs and spending all their free time on side hustles, with what was supposed to be their free time taken up by revenge bedtime procrastination, they are so focused on the goal of qualifying for a home mortgage that they do not have time to think about what happens if they get their wish. A first-time mortgage loan typically has such a long repayment term that people cannot easily imagine how their lives will be when the loan matures. Where do you see yourself in 30 years? It is a scary thought. You have probably heard about the condominiums in Shanghai that are so expensive that the mortgage loans have 60-year repayment terms, and if you are being honest with yourself, it is not difficult to imagine mortgage loans going in the same direction. Assuming that the world will still exist in 30 years, is it even worthwhile to pay your mortgage all the way down to zero? For help thinking about long-term strategy when you buy your first home, contact a California real estate law attorney.
Homeownership Is Not a Game, Even Though Aspirational Content Might Want You to Think It Is
Buying a house and paying off the mortgage may not make you rich, but it certainly will not make you poor. Imagine the worst-case scenario, where you pay off your mortgage and retire, but you have no retirement savings. If you file for Chapter 7 bankruptcy, the bankruptcy court will consider your house an exempt asset, so you will not risk the court seizing it from you and selling it. If you leave the house to your children in your will, and your children have little employment income, they will at least have a place to live. Even if they must pay property taxes and repairs for the house, this is still less financially burdensome than paying rent anywhere in California. If they decide that they would rather rent, they can still sell the house and get some money, even if the proceeds are modest enough that personal finance influencers would call them chumps.
Even if leaving your house to the next generation is too far away to think about now, the only way your paid-off house can make you destitute is if you sell it in order to buy another one that you think will make you rich. A house where the outstanding mortgage balance cannot be zero, but once where you have just borrowed a new mortgage loan easily can; all it takes is one more wildfire or one more political upheaval. You cannot go wrong by paying off the mortgage of a house where you have already made a dent in the principal.
Contact SNR Law Group About Being Content With What You Have
A real estate attorney can help you think realistically about your finances instead of just trying to make money off of you. Contact SNR Law Group in Tustin, California, to discuss your case.
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