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SVTPerformance's Chain of Restaurants
Road Side Pub
Finance Question
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<blockquote data-quote="Iamchris" data-source="post: 16367121" data-attributes="member: 21687"><p>Its funny that you say this. I was talking to a financial adviser the other day, we also had a lady in the room who was a debt management counselor. The debt management lady said what you said... pay an extra payment, it will drastically reduce your loan length!</p><p>The financial adviser said, put that money in an account. It will grow and it has liquidity if you need it! You cant "easily" take money out of your house if you get in a jam. If you lose your job, despite owing less on your mortgage, the bank still will not lend to you. Also, he said, the last dollars you pay on your house are worth the least, those dollars have depreciated significantly over 30 years. The time value of money on the other hand, works in your favor. Thus... invest. I'm still young enough (barely) to be able to capitalize on long term investments.</p><p></p><p>Now, there is truth somewhere in there, but I'll tell you personally... if you dont build a house of cards, I think the financial adviser is correct. And this is a 180 from the way I used to think. If you have the wealth, make it work. If you have debt, reduce it... but I believe mortgages are the exception to that rule.</p><p>I am debt free, I do currently have a loan on my 1st house, but the house has a lot of equity in it, and my bank account is much larger than my mortgage.</p><p>I'm not a financial adviser, I would have thought about going 20% down and getting the house paid off ASAP, but I'm really looking at the numbers and having a hard time justifying it. I suppose one hand is full security with a half full glass. The other is a full glass with some risk associated. I cant see the stock market tanking for 30 years, but you never know.</p></blockquote><p></p>
[QUOTE="Iamchris, post: 16367121, member: 21687"] Its funny that you say this. I was talking to a financial adviser the other day, we also had a lady in the room who was a debt management counselor. The debt management lady said what you said... pay an extra payment, it will drastically reduce your loan length! The financial adviser said, put that money in an account. It will grow and it has liquidity if you need it! You cant "easily" take money out of your house if you get in a jam. If you lose your job, despite owing less on your mortgage, the bank still will not lend to you. Also, he said, the last dollars you pay on your house are worth the least, those dollars have depreciated significantly over 30 years. The time value of money on the other hand, works in your favor. Thus... invest. I'm still young enough (barely) to be able to capitalize on long term investments. Now, there is truth somewhere in there, but I'll tell you personally... if you dont build a house of cards, I think the financial adviser is correct. And this is a 180 from the way I used to think. If you have the wealth, make it work. If you have debt, reduce it... but I believe mortgages are the exception to that rule. I am debt free, I do currently have a loan on my 1st house, but the house has a lot of equity in it, and my bank account is much larger than my mortgage. I'm not a financial adviser, I would have thought about going 20% down and getting the house paid off ASAP, but I'm really looking at the numbers and having a hard time justifying it. I suppose one hand is full security with a half full glass. The other is a full glass with some risk associated. I cant see the stock market tanking for 30 years, but you never know. [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
Finance Question
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