The 40 Acres is all mine - Paid off!!!

[EddieWalker]

... I have several friends and relatives who have no thought of ever paying things off. They just consider making payments their entire life as "normal". In their mind, when something ever gets paid off, it's time to get another something.

So sad, but so very true.

There are a few people that I know who will be loosing their homes any time now because of this mentality. The value of their homes kept going up, so they would alternate between refinancing one year and then taking out a second the next year. Homes that they paid $200K for and are now worth $400K are in debt for over $600K!!!!

In every case, I asked them how will they ever pay off their homes if they keep borrowing against them and getting into more debt. In each case, the answer is always the same, because they will never pay it off anyway. Some even think it's good to owe money so they get a bigger tax refund. The math proves this to be wrong, but it's like talking to a wall. It doesn't matter how much they pay in interest every year as long as they get something back in taxes. Spend $24K in interest to get that $3K refund each year is somehow a good thing to them.

I pay what I owe in taxes when I owe it. I never get a refund and don't want the government holding on to my money interest free. If I have to pay at the end of the year, that's better then over paying all year long.

Property taxes on my 68 acres and 1,000 sq ft 3/2 home are $1,500 a year. They tried to raise them on me last year, but I challenged thema and we agreed that my house was worth $65 a sq ft, not $100 like they wanted to raise it to. I built it for $30 a ft, but couldn't justify that as a price it would sell for. I tried, but couldn't keep a straight face.

Eddie

 

[Double Orange]

Yeehaw!
Still, all 40 acres and the house are paid off. Now I'm just working for retirement.

Thats Great!!
Congradulations!

.

 

[ultrarunner]

So sad, but so very true.

There are a few people that I know who will be loosing their homes any time now because of this mentality. The value of their homes kept going up, so they would alternate between refinancing one year and then taking out a second the next year. Homes that they paid $200K for and are now worth $400K are in debt for over $600K!!!

Eddie

Same thing here in the Bay Area... Neighbor bought his home for 200K... Every year they had new cars, mostly BMW and Mercedes and a huge boat in the Delta... We used to kid him that he must have a money tree somewhere.

Everything came crashing down last November.... turns out he refinanced his home each year for the last 8 years.... winded up 722K in loans, couldn't refinance again and walked away... New neighbors just bought the place for 480K

Congratulations on paying off the place... it's a great feeling!!!

 

[RobJ]

Well you can't get around taxes but you can make some changes. In Texas if you own 40-acres, you can homestead 1-2-acres. This must be your primary home, only one homestead allowed. This will give you discount on the value of the home and land. On the other 38-acres there are many exemptions you can apply for, ag, cattle, grasslands, timber, etc. If you are over 65 you can eliminate or freeze the school taxes. School is usually the high tax. On my little 2 -acre weekend place total taxes are about $1100. About $800 for school. Right now they have the place valued at $67,000 (1500sqft cape, 2 car(errrr atv and tractor) garage. No exemptions since it's a second home. But I'm not complaining, I could sell it in a week for $125k if I wanted. I also filed to protest my value at the spring house. Until I did some research and found I was under value there as well. Nevermind!!