Cash out home equity or keep small mortgage ?

[brianj]

We have a modest to average sized mortgage on our home ($130,000). However, I don't think we could get it paid off in ten years, even if we were to sacrifice so much that we were able to double our payments every month, and 10 years is still too long to be in debt.

We are thinking we had better sell it and buy a really humble house (maybe $60,000 ish) in a really humble neighborhood somewhere so we could pay it off as soon as possible and be debt-free.

Don't move into a neighborhood where you feel unsafe. And if you have kids that will attend public school, be sure to consider the quality of the public schools for your address.
I recall a family in my last ward who found a really bad house in a decent neighborhood, selling for a small price because of how dilapidated it was. They spent most of their free time over the next two years completely renovating the house. By the time they finished, they had a house with an old exterior but it was completely new on the inside, and worth almost double what they had paid. It would take a lot of effort, but I would seriously consider doing the same thing in the future.

[Jason]

I can boil down all of Kiyosaki's good advice into two points:

1) The rich buy assets; the poor buy liabilities.
2) Assets put money in your pocket, liabilities take it out.

The rest is garbage. Save yourself some time and read Dave Ramsey or something from Provident Living.

Side note: I don't mean to sound so opinionated on it, but man that left a sour taste in my mouth working there.... The guy should be nominated for High Priest of the Church of Babylon.

Amen and amen! Those two points are all I've ever gotten out of his writings....which I believe originated from his early partner Sharon Lechter.

Those two points are basic and solid. A good conceptual way to think about taking on debt.

Break with Sharon...
http://archive.azcentral.com/business/a ... d0904.html" onclick="window.open(this.href);return false;

Subsequent bankruptcy...
http://abcnews.go.com/Business/rich-dad ... d=17463158" onclick="window.open(this.href);return false;

...not to mention one-time partners with Trump who also has no moral compass...

Here’s the backstory, a saga that might perfectly illustrate the shadiness of the personal-finance advice racket.
http://www.slate.com/blogs/moneybox/201 ... iness.html" onclick="window.open(this.href);return false;

[Jason]

I believe we are going into a highly deflationary period. Falling income, falling asset values, and increasingly heavy debt service challenges. Not getting into bank account seizure and other emergency/desperation measures the banks are capable of pulling off. Unless they give away free money (no debt strings attached...or debt forgiveness)...that's pretty much the course.

If you have a couple grand in the bank making you a few cents each month while servicing debt that is costing you 10's to 100's a month in interest costs...should be a no brainer.

I really like Dave Ramsey's approach...keep a grand in cash on hand for emergencies...and pay debt off as fast as you can.

I'm totally against precious metals. If all my debt were paid off...I would be buying tools and assets (rentals, farmland, essential businesses - plumbing, electrical, machine shop, etc) that generate income...not something that gathers dust in a safe...and may or may not be of value whenever that really rainy day hits. But I love tools...and learning new skills (still need to learn to weld and get some associated good tools). But I've been slower on paying off debt because of this...which may end up being detrimental to me???

All above is personal opinion...likely worth whatever you paid for it.

Above all...pray and seek divine guidance from one who knows the beginning from the end...as well as you...your capabilities and your blessings....and the mission you need to accomplish!

[usumle]

THANKS BROTHER !

[kennyhs]

I believe we are going into a highly deflationary period. Falling income, falling asset values, and increasingly heavy debt service challenges. Not getting into bank account seizure and other emergency/desperation measures the banks are capable of pulling off. Unless they give away free money (no debt strings attached...or debt forgiveness)...that's pretty much the course.

If you have a couple grand in the bank making you a few cents each month while servicing debt that is costing you 10's to 100's a month in interest costs...should be a no brainer.

I really like Dave Ramsey's approach...keep a grand in cash on hand for emergencies...and pay debt off as fast as you can.

I'm totally against precious metals. If all my debt were paid off...I would be buying tools and assets (rentals, farmland, essential businesses - plumbing, electrical, machine shop, etc) that generate income...not something that gathers dust in a safe...and may or may not be of value whenever that really rainy day hits. But I love tools...and learning new skills (still need to learn to weld and get some associated good tools). But I've been slower on paying off debt because of this...which may end up being detrimental to me???

All above is personal opinion...likely worth whatever you paid for it.

Above all...pray and seek divine guidance from one who knows the beginning from the end...as well as you...your capabilities and your blessings....and the mission you need to accomplish!

Good advice Jason, who are you and why do you always have the right answer?

[Jason]

I believe we are going into a highly deflationary period. Falling income, falling asset values, and increasingly heavy debt service challenges. Not getting into bank account seizure and other emergency/desperation measures the banks are capable of pulling off. Unless they give away free money (no debt strings attached...or debt forgiveness)...that's pretty much the course.

If you have a couple grand in the bank making you a few cents each month while servicing debt that is costing you 10's to 100's a month in interest costs...should be a no brainer.

I really like Dave Ramsey's approach...keep a grand in cash on hand for emergencies...and pay debt off as fast as you can.

I'm totally against precious metals. If all my debt were paid off...I would be buying tools and assets (rentals, farmland, essential businesses - plumbing, electrical, machine shop, etc) that generate income...not something that gathers dust in a safe...and may or may not be of value whenever that really rainy day hits. But I love tools...and learning new skills (still need to learn to weld and get some associated good tools). But I've been slower on paying off debt because of this...which may end up being detrimental to me???

All above is personal opinion...likely worth whatever you paid for it.

Above all...pray and seek divine guidance from one who knows the beginning from the end...as well as you...your capabilities and your blessings....and the mission you need to accomplish!

Good advice Jason, who are you and why do you always have the right answer?

I'm a nobody...and I just have opinions...some more strongly held than others...no crystal ball!

[kennyhs]

I believe we are going into a highly deflationary period. Falling income, falling asset values, and increasingly heavy debt service challenges. Not getting into bank account seizure and other emergency/desperation measures the banks are capable of pulling off. Unless they give away free money (no debt strings attached...or debt forgiveness)...that's pretty much the course.

If you have a couple grand in the bank making you a few cents each month while servicing debt that is costing you 10's to 100's a month in interest costs...should be a no brainer.

I really like Dave Ramsey's approach...keep a grand in cash on hand for emergencies...and pay debt off as fast as you can.

I'm totally against precious metals. If all my debt were paid off...I would be buying tools and assets (rentals, farmland, essential businesses - plumbing, electrical, machine shop, etc) that generate income...not something that gathers dust in a safe...and may or may not be of value whenever that really rainy day hits. But I love tools...and learning new skills (still need to learn to weld and get some associated good tools). But I've been slower on paying off debt because of this...which may end up being detrimental to me???

All above is personal opinion...likely worth whatever you paid for it.

Above all...pray and seek divine guidance from one who knows the beginning from the end...as well as you...your capabilities and your blessings....and the mission you need to accomplish!

Good advice Jason, who are you and why do you always have the right answer?

I'm a nobody...and I just have opinions...some more strongly held than others...no crystal ball!

[Sirocco]

Hi Friend ! I was gifted the house I live in with a smaller mortgage on it. I can potentially do a refi and pull 100k out of the equity (after paying off my 15k of credit cards, yes !) I know it would be more debt ,technically, but I am concerned about future economic hard times/dollar collapse events (as preached by Mills Crenshaw, Harry Dent, Kiyosaki, etc)
I would look to buy other rental properties, buy more silver, and bullets among other useful things. I would not waste it and I am very frugal. I will continue driving my reliable, but old, car until it dies. I know Dave Ramsey would say NO and Pres Hinckley said AVOID DEBT LIKE THE PLAGUE but I am thinking in terms of future economic conditions. (I think housing bubble will pop again relatively soon)

I have one son and pay child support to my ex-wife.
I have a year supply of food, finished college, and have 19k of student loans. I have worked 10 years at a tech company but my job outlook would be mediocre (I think; because of skillset) if layed off.
What would you do in my case ? Any perspectives are appreciated. Thanks !

Enjoy the better housing market!
In Canada, homes in Toronto and Vancouver have swelled to a million dollars, price wise.
Most other places aren't really worth living in the country, and don't fare a whole lot better, even if you wanted to live in them.
And anywhere that is cheap, is in the middle of nowhere and has no jobs.
Most of our provinces are have not's.

[dlbww]

The correction has started in the Canadian housing market (Vancouver, BC., etc. as well as other global locations). May not be a good time to be over-invested in real estate: https://www.armstrongeconomics.com/mark ... ning-down/" onclick="window.open(this.href);return false;