my mortgage dilemma

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bluestone's picture
bluestone
Status: Gold Member (Offline)
Joined: Dec 29 2008
Posts: 263
my mortgage dilemma

I know that this subject gets brought up periodically, but every individual situation is a little bit different.  I need your opinions on what to do.

My wife and I currently own a house (I know, the bank owns the house).  We have about a 300,00 dollar mortgage.  Our home has almost an acre of land.  The house is in very good condition.  It has a new roof, new furnace, tankless water heater and new woodstove.  it is well insulated.  the house is about 2700 square feet and has a good sized basement for storage.  Not quite a Mcmansion, but a good sized house.  We have two small children.  We do have a fairly good sense of community the neighborhood.  People really do get to know each other here (much better than in other places i've been).  However people are still completely in the fog about our current energy and economic predicament.

An acre is not a large piece of land but it still gives you a lot of room to start growing vegetables and fruits.  I've planted four fruit trees and 10 blueberry bushes, several blackberry bushes and a couple of raspberry vines.  I've designated an area for a veggies and potatoes.  I plan to keep on planting.  

At this time, we can easily pay our mortgage with our salaries.  I know this can change.  Our assets, not including equity in the house, total a little more than twice the size of the mortgage.  This includes physical PMs, foreign investments with Peter Schiffs europac, Pms in the perth mint and money in 401ks, and roth iras.  

So this leaves us with several options

1.  sell the house to eliminate debt.  housing has held its value fairly well here.  (my wife balked at this option). disadvantage - it would still be expensive and time consuming to move.  If we rent we may have to keep uprooting over and over again when TSTHF.  Maybe its better to be around people we know.

2.  keep things as is.  We have mostly gotten out of the dollar and dollar denominated assets to protect against inflation.  if we have severe inflation, we may retain our wealth and have a much easier time paying down the mortgage.    risk - we could lose our source of income and assets could lose their value (perhaps in a deflationary scenario)

3.  use our assets to completely pay down the mortgage now.  perhaps cash out retirement accounts.  even sell PMs

Any advise would be much appreciated.  Thanks

Brian

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1443
Re: my mortgage dilemma

#2 is my opinion.  The only thing that I would take into account is how close you are to a major population source as well as how close you are to a military base.  If you're in a suburb of a large city then I'd consider moving, unless you're on  the outskirts of such to the point that you feel you're far enough away if there's a crackdown of the populace.  It also depends on how much equity you actually have in your home right now and what you could buy where you decide to move.  If you can buy outright with your equity that would change the scenario.  

Unless you have a large quantity of PM's and you wouldn't have to sell more than 20% to get what you're looking for then I wouldn't let them go.  Those could be your lifeline...literally.

 

ccpetersmd's picture
ccpetersmd
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 799
Re: my mortgage dilemma

I agree with LogansRun.  If you were already considering a move elsewhere, for reasons of security, closeness to family, more land, etc., I might make a move.  Otherwise, if you are happy and safe where you are, I'd stay put.

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Re: my mortgage dilemma

I would stay put, unless you are moving to a "better situation". It also depends on what you are near, large city, work, sources of food, etc. As far as paying off the mortgage, if you do that,will what you have leftover be sufficient going forward?

bluestone's picture
bluestone
Status: Gold Member (Offline)
Joined: Dec 29 2008
Posts: 263
Re: my mortgage dilemma

Thanks for the input everyone

I do live the in the suburbs (north of Albany NY).  Im about 15-20 miles out of the city.  the area's population is about 600-700 thousand.  Fortunately there's a lot of farmland around the area and a lot that could be converted into farmland.  lots of water, but little sun.  Winters are very long here which I suspect will be a problem in the future.  

 

Brian

EndGamePlayer's picture
EndGamePlayer
Status: Platinum Member (Offline)
Joined: Sep 2 2008
Posts: 546
Re: my mortgage dilemma

I agree - stay put and be ready to expand to fit 100% of your needs if needed. IF TSHTF, chances are most banks won't be operating so pay minimum on the mortagage but keep the savings as back up.

The thing I see about a small holdings is - you can not only do a lot with it to be ready, but IF/WHEN TSHTF, then be prepared to take over vacant farm land as those areas are heavily worked via gas machines and one day - gas might be too expensive for them to be worked. Those who are ready could (in theory) expand quicklyto meet their needs.

IF TSHTF does not happen - well, you'll have good food, good health and an abundance to share.   EGP

rheba's picture
rheba
Status: Bronze Member (Offline)
Joined: Apr 22 2009
Posts: 65
Re: my mortgage dilemma

I would either sell the house and buy something smaller and cheaper or pay off the mortgage. You are in a cold climate and in a big house. What it there is an oil shortage? What if it becomes unaffordable. Then you will not be able to sell. Once your liabilities exceed your assets, which could easily happen, you are cooked. 

bluestone's picture
bluestone
Status: Gold Member (Offline)
Joined: Dec 29 2008
Posts: 263
Re: my mortgage dilemma

 

rheba

i agree.  I'd probably be better off with a smaller house with a smaller mortgage.  Fortunately for me its efficiency is pretty good.  I know a lot of other people with smaller, older houses who pay a lot more for heating in the winter.  It runs on natural gas which at least for now is more resistant than oil to a dramatic rise in price.  We also do have a woodstove and access to wood. 

thanks for your input

Brian

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