One of the biggest purchases most of us will ever make is a house. It’s become pretty common to take out a 30 year mortgage and to have it our entire life – but did you know almost 1/3rd of Americans live without a mortgage?!
As I’ve discussed before, I think amortized mortgages suck because the majority of payments the first seven years are only applied to interest – meaning we aren’t gaining much traction in home equity which is one of the true values of home ownership.
If your goal is to do something crazy like pay off all of your debt and do what you want with your life, the mortgage is one of the major things you need to battle.
The way I see it, you have a few options if you want to live without a mortgage:
1. Pay off your mortgage
2. Rent – but you still have a monthly payment so that doesn’t really work
3. Live with your parents (We’ll probably do this for a while when we get back from our trip!)
4. Live in a camper van (we did this for almost two months, not the worst thing in the world, but we wouldn’t be able to do it long term!)
So I’ll go with option one because that’s what we’re striving for (no offense parents). So how can we quickly accomplish option one?
1a. Buy a house way cheaper than you can afford – even the 2x income rule is too high if you want to pay it off quickly
1b. Put at least 20% down – or pay for the whole thing with cash!!
1c. Get a 15 year mortgage max (this means you’ll pay way less interest up front than with a 30 year mortgage)
1d. Pay off all of your other debt, then go for the mortgage with every bonus, pay raise, extra income earned through lemonade stands and car washes (may have to put the kids to work for the last two; not sure how well an adult lemonade stand would work – John Daly’s anyone??)
Easy as that, right??? Of course it’s not, but if you do the things in the beginning right, it’ll make your chances of quickly owning your home outright more possible.
The other problem is our constant need to upgrade our houses. Yes, most people will probably have to buy a new house as their family gets bigger, but buying and selling houses costs a whole lot of money and the more you do it, the more money you’re wasting that could go straight to the mortgage.
Let’s take it to the polls to see how we’re all doing with our mortgages – so where do you stand?
By the way, did you know almost 1/3rd of American households have their mortgages paid off? According to Zillow, this is who:
“the nation’s most elderly were the most likely to own their homes, with 77.6% of those 85 and older owning their homes outright, followed by those ages 74 to 84, at about 62.7%. One outlier was those homeowners ages 20 to 24. Out of that relatively young demographic, about 34.5% owned their homes outright.”
Do you think it’s possible to live without a mortgage? If you do live without a mortgage, let the rest of us know how!