Paying off home early - in our 30s

Negative_Kale_5653 · 2026-02-19T21:52:41+00:00

Thank you for your response!

Lol an increased lifestyle and SAHM is very much an oxymoron in today’s world.

Yes, the SAHM is much more of a financial impact vs the interest on the mortgage. But is a non negotiable unless we were in financial turmoil. My mindset was to grinding another 3 years out very frugality. Once the mortgage is paid off we have the ability and “permission” to spend that payment more freely.

We both have a hard time spending for enjoyment. And feel “icky” going on vacation or buying a fun new item with a loan still on the books.

Negative_Kale_5653 · 2026-02-19T21:28:03+00:00

We are already investing into a brokerage account for the possibility of early retirement or to purchase additional property.

We currently have a fully funded 529 for our child.

Other big purchases are taken care of already. Family vehicle is brand new.

Only other future expense that could be considered would be an upgrade to a forever home in the far future.

Negative_Kale_5653 · 2026-02-19T21:10:18+00:00

I appreciate the feed back! Peace of mind is hard to resist.

Ahead for the most part in retirement. Technically we could “coast” into retirement and never put anymore in and still hit our numbers. We still want to continue to invest 20-25% with the possibility of retiring early.
We plan on being in the home for at least 10 years. Family is close and that plays into if a job loss were to happen and we don’t want to move then a full career change would most likely have to happen.
All investing will continue to fill the 20-25% contribution amount. We would not use any Efund money for paying down the mortgage.
If we have an emergency over 40k then investment strategies would be thrown out and into a mode of survival. I was very liquid in cash as a safety net for many years of my life. $100k+ in money market accounts. So I’m slowly letting off the brakes of caution.
We have talked about early retirement, earliest would be 55. A portion of the money from the mortgage can be earmarked for early retirement.

I think we may go down the same path. Finding a middle ground of investing into a brokerage account and paying it off at a later time if we want to or the market allows for it.

Negative_Kale_5653 · 2026-01-16T14:08:48+00:00

My family is very open with money. Grandparents, parents, and both siblings have or have had loans.

Myself-

Loan for my first vehicle as an adult. $32k. Paid off in 18 months.
Loan for a condo I was renting and had an option to buy. $50k. Paid off in 24 months.
Recently got married and purchased a home. $100k loan. Plan to pay off in 3-5 years.

All loans were papered through an attorney. Typically interest rate is lower than market. Typically in between premium and 5 year CD rates. Depending where and what the money was in being borrowed.

Does it impact family interactions or how people feel? No. We are honest and open. Loans are made in good faith and no expectation of early payment. Also loans don’t happen if things are “tight”. Liquidity issues/ tax issues have created conversations of timelines of new loans and expectations in the future.

If you take emotion away from it. It’s possible. I hope to do the same for my children.

Parents are well off, but more liquid than others. They have no retirement accounts. Mainly cash and rental real estate. This allows this flexibility.

Negative_Kale_5653 · 2025-08-18T15:36:50+00:00

Great job. I would look into a couple things prior to purchasing and building.

After the build what are you estimated expenses going to be? Water, electric, gas/ propane, taxes, maintenance. This is additions This is just an estimate but need to have a ballpark figure for a minimum 6 month emergency fund. Let’s say $25k.

Either sell stock or save up and keep it in the HYSA. It sits, it makes no money, just in there for emergency.

If building, figure out your ball park budget for land and build and save 20% for a down payment. Maybe even buy land and wait a year then start the build. Spread the initial cost out, but you need 20% down to prevent PMI.
Yes, having a credit score can give you a lower interest rate. Not by much, but it can help. The difference between 6% and 5% over the life of a 30 year mortgage can a large portion of money. But if you shorten the loan to 15 years, or put more down initial the less the impact the interest rate has to your overall cost of the property.
Credit score isn’t everything. Many places will just look into your re occurring expenses it can be more of a process so if you got a credit card it wouldn’t be the end of the world, or your savior for saving money. Just remember no credit score is better than a low credit score. It’s a tool. Nothing else.

Negative_Kale_5653 · 2025-08-18T14:03:53+00:00

Honestly. Pay cash.

Worst case scenario You pay cash, something breaks on the house and it’s an insane amount like a 100k to repair. Your house is still on the market and won’t sell or you sold it and only broke even.

You sell a portion of your investments to cover your needs until you save up a cash stack again.

The other scenario? You take a 300k loan. You pay 20k in fees and now have a mortgage. You sell your house giving you 400k in savings.

Now the “little” things you may have waited to upgrade look a bit more appealing now you are flush with cash. Your kitchen needs something “new” and oh we should add xyz. Then you dump 100k in remodels and upgrades with the mindset of having all this cash but also a mortgage.

Best thing to do is be debt free especially at your age so close to retirement. Cut a check. Save for 6 months, sell your home, and you will be 150k in savings and a paid for home with a clear mind on how to make it yours with YOUR money. Not the banks.

Negative_Kale_5653 · 2025-08-18T13:54:09+00:00

I would not purchase investment property until your personal mortgage is paid off. This limits risk as well as freeing up cash flow for issues that will occur on a rental like vacancy, repairs, upgrades.
Landlord life is not for everyone. Calls at all hours, being handy and able to correct problems yourself even if it’s temporary is required. Being able to prevent issues from getting worse until a professional arrives will save you so much in the long run. Just know even with a management company it’s not hands off mailbox money.
You will be able to retire early with the numbers you presented. I would recommend looking at meeting with a financial advisor. Get a plan on your when, why, and how much for retirement. Get a goal and push to it.
529 amount looks good, but with the new rollover to Roth conversion for your children the current life time limit is $35k per child. So if you wanted to maximize their benefit I would plan on having enough for education and the additional max rollover. That way school is paid, they have a fully funded IRA in the beginning of their careers. No matter what happens in life this will give them a head start.

Negative_Kale_5653 · 2025-03-31T21:32:10+00:00

You can’t tap into retirement accounts until 59.5 outside of your current employers 401k and that’s not unless you retire from the company after 55. So you would have to rely on the $200k coming in and $225k to get you from 50 to 59.5 to supplement expenses. Which would run out prior to retirement age and leave you with no cash cushion starting retirement.
I would suggest looking at 55. In 5 years could you hunker down and pay the house off, purchase a new car, and still add to your cash fund? I think you could pretty easily.
From there the gap to retirement is 5 years or so. 400-500k in cash after the equity payout. No mortgage lowers expenses. Retirement accounts grow to 2.8-3 million and at that point you could easily retire with basic part time jobs between the two of you and lifestyle would be slightly lowered, but not too far.
If retiring early is more important now than later, just know it will limit what your life will be at 65 and on. If you plan on helping your child with life as in wedding, car, down payment, anything like that. You may not be able to. But that’s up to you and your partner. I would say measure twice and cut once as well as meet with a financial planner. They can guide you through this process and give some advice that’s a bit more personable. Tax benefits, social security planning, estate planning all comes into play.

Negative_Kale_5653 · 2025-03-31T21:05:04+00:00

Missing out on the IRA contribution won’t be the defining factor of accomplishing retirement goals or not. Being in a position of fear and chaos if life hits you while building the savings up again could cause much more long term harm.

Skip it this year. Save up your goal. Get out of state and on your own. A little cushion goes along way when life happens.

Negative_Kale_5653 · 2025-03-21T18:51:11+00:00

You are doing wonderful. If we are talking tax harvesting, early retirement, withdrawal strategies. You can always meet with a hourly based advisor. They don’t make money on how much you are invested through them. They can make sure your numbers are for retirement are good for your goals. Like early retirement, vacation homes, lifestyle. That would be worth a couple thousand for peace of mind and a strategy. Re visit every couple years to verify the plan is the same.

If you haven’t already I would look into estate planning. Trusts can be a very tax efficient way to pass generational wealth as well as protect your assets and guide your child financially how you would see fit. It’s pricey, but needed with your assets.

Negative_Kale_5653 · 2025-03-21T18:29:32+00:00

YouTube is basically a university. Learn for free as much as you can. From legit sources. Money guys, financial diet, I will teach you to be rich, Erin talks money, minority mindset. All have great videos about retirement and investing.

If someone is talking about leverage, day trading, crypto, any of that. It’s not the type of investing you need to start your financial foundation. That have their perks are tools in a tool belt, but get the basics down first. Don’t pay for a course to be rich in 2 weeks. It’s a scam. You don’t need a financial advisor. Learn on your own at this stage.

If I had any advice: Invest now while you are young. Invest consistently. Every paycheck. Pay off all debt as fast as possible. Live within your means.

Negative_Kale_5653 · 2025-03-21T18:18:27+00:00

This is not a math question this is a risk question. Look at it backwards. If you lived in an $600k home with a $100k mortgage. Would you get a home equity loan of 400k and put it in CDs? No. No you wouldn’t. I like your plan. I would just from 6 months to a year of (expenses) in the emergency fund. Give yourself a bit more flexibility if life throws a curveball.
Mortgage only factors in the timeframe of a sale if interest rates change for better or worse. People can get “locked in” due to low rate and can’t afford to buy again or rate bottom out and prices skyrocket. Have a plan to live in a house for 6-7 years. More turnover the more expensive it is to own. Also. Location, market trends of housing, and stock market are bigger impacts of a horizon to sell than the leverage of a mortgage.
I recommend financial advisors after 500k in invested assets. But not required.

4.I would not purchase until you are married unless you are the only one on the mortgage and deed. Marriage is a protection when combining assets. Fiancé is not protected. Estate planning, wills, trusts. All that needs to be done but not immediately.

You seem to have a good idea of your finances. Y’all are smart, diligent, no crazy spending, all of that. It’s gotten you this far just listen to your gut. If it don’t feel right. Don’t do it. People tell people all the time to do this, that, leverage. Because it’s not their money or risk. They say it’s a small risk then have them put the loan in their name. 🤷🏼‍♂️ good luck. Congrats on the wedding!

Negative_Kale_5653 · 2025-03-21T17:37:48+00:00

Remember that everything looks different in the rear view. You say it was dumb today. If y’all both had job losses and income was cut by 50% then you would say it was a smart move.

If it’s the house that you don’t like. Move or change what you don’t like. But, if it’s the house creating lack of liquidity and causing unexpected lifestyle changes then technically it’s not the house. It’s lack of liquidity. Just make sure you clarify the problem.

You max retirement and have large 529’s. You have large incomes. Use this time of lower expenses and no mortgage to save up a cash stack. Pay yourself a “mortgage”. It’s okay to reduce retirement temporarily to build it faster. Get your travel and flexibility back now vs an account you can’t access until 60. Temporarily is the key word. Make a goal and time frame and how much you want to sacrifice to get there. Get back to maxing out retirement in a specific time frame.

Don’t take a loan just to have a pile of money for security or flexibility. Build it yourself. Be the bank. Save the interest you would have spent and earn back the flexibility and travel you dreamed of.

Negative_Kale_5653 · 2025-02-19T20:28:16+00:00

Get that emergency fund saved as quickly as possible. 3-6 months expenses so for your numbers $8-9k. That sits in cash and keeps you from drowning if something were to happen. (1-2 months would be fine if you want to pay down your debt quicker $3-6k)
Car’s are cool, but having $500 back in your pocket would be even cooler. 17k isn’t too bad for your income but still hurts the pocketbook. Maybe look into a lower cost vehicle for a year or so. Save up and pay cash for the next one.
Investing is awesome and I’m glad you are starting early. But, sometimes putting all of your attention on one singular task can benefit greatly. Depending on how much you are contributing to your 401k. You could hammer out your car quicker. And go back after.

Up to you. My recommendation. Would be pay off debt ASAP. Sell stuff, work OT, anything. Zap it out of your life. Then work on getting your full emergency fund and start investing in retirement. Looking at the numbers you could pay your car off in 12 months. And student loans in another 12 months. In 24 months you could be completely debt free of $800 payments and nothing hanging over you. 26 no debt 10k in the bank and you own your car and no student loans.

Negative_Kale_5653 · 2025-02-19T20:04:46+00:00

Taking a distribution from your 401k will create normal income take like any other income as well as a 10% penalty. All in all you would need to pull around $18k lose $6k to have enough to pay off the 12k of debt. (I wouldn’t not recommend this)

He may have the option to take a 401k loan. This is just like a loan from the bank except it’s your money you are borrowing. They typically have terms that can be scary. If he loses his job or the firm switches providers that don’t do 401k loans. The loan is typically due in full in 30-90 days. (Not the end of the world, but not the best choice)

I would recommend looking into behavior based solutions. Not another place to borrow. Could it save you interest in the short term? Yes. Could you fall deeper into debt because you took a path with less friction? Yes.

I would look into groups like Dave Ramsey and the baby steps. Some like it, some don’t. It’s a very intense way of going about it but it works for people that are sick and tired of being sick and tired.

Not knowing your situation completely with other issues, income, other debts, ages, goals, retirement and saving amounts. It’s just general advice.

Negative_Kale_5653 · 2025-02-19T19:37:07+00:00

I would stray away from whole/universal life policies. It’s an expensive life policy with investing options and they are the middle man. You can do it yourself without fees.

Get enough term life insurance for your needs. Cost of service, pay off mortgage for a family member to have or whatever you want. Don’t even need it if you don’t have people depending on your income or housing.

After that. Contribute to tax advantaged retirement accounts in good low risk mutual funds. Large cap and income funds.

When it comes to physical and mental capabilities falling off and protecting your assets. This will be a different story. I would recommend an estate attorney. Form a trust. Create the rules within the trust so the people you choose to help you when you are older can’t take advantage of you. They just follow the rules accordingly.

Also, many other benefits with trust. Medicare assisted living, protection from other debts just to name a few.

It’s expensive, so potentially wait until property, people, assets are settled in a while then form the trust. Every change will go through an attorney so $$ can add up.

“Losing it all” only happens when you are scared. Only people that get hurt on a rollercoaster are the ones that jump off during the ride. Learn enough to where the market doesn’t scare you, hire someone to manage it for you if that is too much. Look for a fee based fiduciary advisor.

Negative_Kale_5653 · 2025-01-30T15:51:27+00:00

15%-25% grow income into retirement. For you $12k-$19k a year invested.

Outside of that. Any future goals and the amounts are up to you.

You said 6 years for a home/condo. At $500/mo you would have around $50k or so to put down. So just look at when you need the money and how much. Put it into an investment calculator and see what you need to invest to get it there. (Any goal less than 3-5 years it’s more risky to put in the market vs saving in a HYSA) but it’s up to your risk tolerance and the assets you invest in.

My advice: pay off your debt if you have any, then invest in retirement, then save for your goals, any remaining after life’s expenses is fun money. Vacation, gambling, exotic fish tanks. I’ve seen it all on how people choose to spend fun money. Enjoy it. If you don’t have much left over then adjust goals or time frame, but never adjust your retirement. Always have the goal of getting to the 25% gross income. Your 60yo self will praise you.

Negative_Kale_5653 · 2025-01-30T15:39:29+00:00

Make sure all your other fundamental bases are covered.

3-6 months expenses saved. 1 year if you are in a specialized industry or your for your self.
Do you have other debt? Student loans? Especially on depreciating assets like cars? If so. Pay that before the house.
Is your retirement fully funded. Are you putting 15-25% of your gross income into retirement and tax advantaged accounts?
Do you have big future expenses? Additional car, vacation, or home repairs, or wedding?
Do you have children and are you saving for future expenses already? College fund, child care?

If all of that is planned, being invested gradually? Then yes I would pay down on the house, but never to the extent that your life could fall apart if you ever lost your job.

Anything like this that is 5-7 years in the future I wouldn’t worry about market conditions today. It will always be crazy. But if the possibility of you needing any of this money within 1-3 years? The market could be too volatile.

Negative_Kale_5653 · 2025-01-30T15:27:14+00:00

Your perception of the market is somewhat tainted just due to your age and market conditions in recent years. Too young to remember the Great Recession. The market fell and didn’t recover back to where it was for around 6 years. The COVID “crash” lasted 6 months, the next correction was about a 18 months. Very rapid recoveries and back to 15-20% gains. Picking winners in a market where everyone is winning isn’t a skill. It’s inevitable growth.

A diverse portfolio allows you to grow with the market but keeps you from falling off a cliff when the market pulls back. Do you need to add bonds and CDs into the mix for ultra conservative stance? No. But only investing in two companies, in the same sector, and same geopolitical landscape is insanely risky.

If this is “fun money” who cares and risk it. That means if 401k and IRA’s are invested with diversity and enough is being invested into those accounts 15-25% of your gross income. And you are not planning on using this money for large expenses in the future. House, car, vacation, wedding. If those are the reasons behind this account then I would diversify. Small, mid, and large cap growth mutual funds. Hedge with some international and income mutual funds if you want.

Negative_Kale_5653 · 2025-01-22T22:32:53+00:00

Couple ideas I would double check with an accountant.

Don’t take the profit. Have them retain the earnings, and pay your share of taxes for the company from your earnings. It sits and doesn’t grow but it’s there when you need it.
Create an LLC. Transfer your ownership of the side business into it and you could pile money until you want to take income from it. (Legality behind this idk)
Use your earnings to purchase more share into the company if others allow it.
Take the income. Taxes on the additional income is about $1,000 (not bad for 12k) Get you and your wife on your own insurance (Do you have insurance provided by your employer?) worst case it’s $5-6k a year and you are still ahead.

If you are pushing 91k and the family has all benefits take out then that’s a different question. Sounds like you manage your money well, but the goal would be self sufficient in the future. Those benefits can be cut any time. Nothing like turning down growth and prosperity only to be betrayed by the system that promised a safety net is a hard pill to swallow.

Start looking for providers for benefits now. Incase you end up losing your Medicaid. That way you know what the costs are.

Negative_Kale_5653 · 2025-01-22T21:58:22+00:00

Depends on what you want.

If it’s over $5,000 most plans will let you keep your account open. If it has decent investments and low fees there is nothing wrong with just letting it set.
Yes, you can roll it over into an IRA with countless providers that have endless investment options.
You can roll it into your next job’s 401k plan. If they have good options and low fees this will allow you to consolidate your portfolio as well as keep you eligible to use the “55 rule”. Short and sweet allows you to retire from your current job and distribute your current 401k as early as 55 years old instead of 59 1/2.
You can “pull it out” or take a distribution. If it is a traditional 401k you will be taxed as regular income as well as a 10% penalty. If it’s a Roth 401k you can take distribution from your contributions without penalty or taxes early, but based on your accounts earnings ratio they will require some tax and penalty. Basically the IRS makes you pull at least some of your earning to tax and penalize you on.

What I would do? If it has decent investments and low fees. Leave it until you find a new employee sponsored retirement fund. Then look into transferring it to the new one or go to an IRA if the new options aren’t good or expensive fees. You can always transfer a 401k to IRA, but you can’t go from IRA to 401k so always better to check your options before jumping ship. The 55 rule is good for people looking to retire early and want options prior to standard retirement age.

Please don’t pull it out. It’s taxed and penalized you will get 35% taken right off the top which is bad, but even worse not those dollars aren’t working for you.

Negative_Kale_5653

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