% Net Income goes to rent/house payment

just closed last week. 18% of my take home right now. I'm planning to knock the whole thing out in the next 2-3 years assuming I keep getting bonuses in the ballpark of my past bonus payouts. the worst case is 4 years which is when the last of my unvested stock matures and that amount will for sure cover the mortgage we currently have. Once the recession sets in and rates drop back to like 3.6-4% i might re-finance if costs are low enough and drag it out. but 6% interest on this new loan is a major motivator to get rid of this note.

like Winston said, many mistakes in my life, including the first house i bought in the midst of the 2008 housing crisis (i lost 98k on that house, but never foreclosed on it) i've never bought too much house.

posted by j_crazy

just closed last week. 18% of my take home right now. I'm planning to knock the whole thing out in the next 2-3 years assuming I keep getting bonuses in the ballpark of my past bonus payouts. the worst case is 4 years which is when the last of my unvested stock matures and that amount will for sure cover the mortgage we currently have. Once the recession sets in and rates drop back to like 3.6-4% i might re-finance if costs are low enough and drag it out. but 6% interest on this new loan is a major motivator to get rid of this note.

like Winston said, many mistakes in my life, including the first house i bought in the midst of the 2008 housing crisis (i lost 98k on that house, but never foreclosed on it) i've never bought too much house.

I bought my house at the end of that 2008 crash, the values in my area bottomed out at about $105k, I bought my house for $110k (was originally listed for $150k). 

6-12 months ago when the market was insane, the house across the street (same lot size, same cape cod house built in the 60s) sold for $199k after all houses on the street from 2008 until 2022 sold for $100-$125k.

Its probably now more like a $175k rough estimate if I wanted to sell my house tomorrow (currently owe about $80k). When the rates go back down I am thinking of taking a HELOC and putting it in mutual funds (ala gut's buddy) but I won't do that with HELOC rates at 8.5% right now.

posted by jmog

Congratulations, I can't wait for that day to come.

Thanks.  A good feeling.  I've worked hard to have no debt currently - no cars, no house, no loans, no credit card.  It allows me a better night's sleep.

posted by Dr Winston O'Boogie

Thanks.  A good feeling.  I've worked hard to have no debt currently - no cars, no house, no loans, no credit card.  It allows me a better night's sleep.

Did you use any particular method, like Dave Ramsey, snow ball, another called the annihilation method or something?

My goal is 7-8 years, no debt. I have no CC debt (use some but pay off each month just to keep credit score going up), no student loan debt, etc,  so I have 2 cars and house. Wife's car will be paid off next year, my truck and house both in 6-7 years is the goal. That will put me right around 50 maybe 52 and debt free.

If I can do that, then my wife's next car will be paid for with saved up cash from said debt removals.

posted by jmog

Did you use any particular method, like Dave Ramsey, snow ball, another called the annihilation method or something?

My goal is 7-8 years, no debt. I have no CC debt (use some but pay off each month just to keep credit score going up), no student loan debt, etc,  so I have 2 cars and house. Wife's car will be paid off next year, my truck and house both in 6-7 years is the goal. That will put me right around 50 maybe 52 and debt free.

If I can do that, then my wife's next car will be paid for with saved up cash from said debt removals.

we did the ramsey mehtod until we got to where we only had house debt.  at that point we stopped with the debt snowball and focused on investing. with my job moving us every few years we had been just using equity gains and whatever we had invested to make larger down payments on each subsequent house. We just put 550k down on the house we bought last week by doing that method since we eliminated all non-house debt in 2016.

We are somewhere around 30% right now of our take home pay. I wish it was lower but this is our dream house and unless we move again for a job we should be here the rest of our lives. 

We are in Dublin schools so the taxes are high as hell out here. I miss Texas and no state income tax right about now. 

We have also been incredibly lucky with our housing situation. Bought in 2014 our first house for $180k sold it in 2020 for 325k. Bought second home for 490k in 2020 sold 1 year later for 693k. Bought our current home for just under 800k and the new ones around us a year later are selling for 875k for less sq footage

posted by jmog
Be careful, many ARMs, like HELOCs, can "only go up 0.5%" each month...not in total. Might want to double check that.

Yep - we're set. We made sure to double check a lot of the "fine print" stuff.

The car payments, or lack thereof, is huge for us too. We have one vehicle completely paid and our 2nd vehicle is almost paid off. 

A nice feeling when you're not losing $500ish ea. month to auto loans. Made our mortgage somewhat more affordable. 

Only debt is the house. Still glad i refinanced to 2.85% a few years ago into a 20 note. No reason to keep paying interest. One more month we free up daycare at 1,500 a month (still have another one :(), gonna be silly. Sold our boat as well, for a gain. I’m cheap, and love money, so this will be great. Owe about $250k on our house but could sell for around $750k. The south is killing it currently. 

About 3%. Pretty close to debt free. No car payments.

posted by jmog

Did you use any particular method, like Dave Ramsey, snow ball, another called the annihilation method or something?

My goal is 7-8 years, no debt. I have no CC debt (use some but pay off each month just to keep credit score going up), no student loan debt, etc,  so I have 2 cars and house. Wife's car will be paid off next year, my truck and house both in 6-7 years is the goal. That will put me right around 50 maybe 52 and debt free.

If I can do that, then my wife's next car will be paid for with saved up cash from said debt removals.

Basically the Ramsey philosophy.  We do use a credit card  I put all expenses I can on it, pay it off monthly and collect Marriott points that way.  

Debt stressed me out - unreasonably.  I think I must be pretty risk averse.  I may not maximize every arbitrage opportunity that’s out there.  But I sleep better.  

On top of that, I was an alcoholic.  So there were a lot of poor financial decisions made for bad reasons.  But that’s in the past too.

posted by Dr Winston O'Boogie

Basically the Ramsey philosophy.  We do use a credit card  I put all expenses I can on it, pay it off monthly and collect Marriott points that way.  

Debt stressed me out - unreasonably.  I think I must be pretty risk averse.  I may not maximize every arbitrage opportunity that’s out there.  But I sleep better.  

On top of that, I was an alcoholic.  So there were a lot of poor financial decisions made for bad reasons.  But that’s in the past too.

Nice job, not only on the debt but on beating alcoholism as well.

I have a very addictive personality, easily get stuck on things. Used to be video games, has been books (read whole books in 1 day), porn years ago, etc. I would be petrified of being addicted to drugs or alcohol, so I have never even smoked weed, and truthfully only been drunk MAYBE 3 times in my whole life because it worries me. I will only have 1 drink in a dinner or night out being worried about that or driving with any in me, even when we are at our camper, 1 single of my scotch pretty much for the whole weekend.

So I commend you for that, truely do.  

I am currently juggling two houses.  Finishing some remodeling on our 130 yr old house and the local market currently is bank.  Solid updates to a 4 bedroom 2 bath house walking distance from town, restaurants, and the elementary school.  It will draw the appeal of a young family.  Likely the extra effort I am putting in will pay off.

Our new house needed some remodeling as well.  Most is done.  Bought it from an old widow that lived there 40yrs.  Its a beautiful property in the country near I77.  Closer to my grandchildren up north and a peaceful commute to my office.  Commuting through amish country is a pain in the ass especially in the fall.  Concorde grape vine and lots of wild raspberry bushes.  Curious deer watching me mow from my woods. Reminds me of my grandparents property.  Its where my wife and I will enjoy outdoor living and fade away.

Those of you that mentioned being free from the burden of auto loans.  You do well and enjoy the release of those shackles.  If you can cash off the automobile you need over going into debt over the automobile you want, choose the former.  Its not a bad thing to go into debt for a vehicle you want and may not need to.  But if its possible financially to do so my advice is to take it.  For me I have found it quite liberating.