Is a Mortgage an “OK” Debt?

This is a guest post by Mrs. Accountability, who writes at personal finance blog Out of Debt Again, where she details how her family is getting out of debt, again. Follow her on Twitter @outofdebtagain.

How do you feel about mortgage debt? Do you think it’s a necessary evil, are you totally against having a mortgage, or are you trying to pay yours off as soon as you can? Here are some of the opinions I’ve heard when it comes to having a mortgage.

Opinion #1: Keep It Forever

Some people feel that mortgage debt is acceptable and possibly necessary. They expect to have a mortgage payment for their entire life.

I was once told by an acquaintance that it was a ridiculous goal wanting to pay off my mortgage. He told me, “Oh no, you ALWAYS want to have a mortgage.” I think the idea is you always want the mortgage interest for tax deductions. Our mortgage is under $50K, and we don’t have enough deductions to itemize, so that doesn’t work out for us.

Opinion #2: Don’t Have a Mortgage, Rent Instead

Some feel that it’s best to never own a home, instead preferring to rent. I personally have never been pleased with renting, and prefer to be a homeowner. I guess some of your preference would depend on your lifestyle.

Opinion #3: Pay It Off As Soon As Possible

Some believe mortgage debt should be paid off as soon as possible. From what I see in the blogosphere, many frugal personal finance bloggers hold this view. I think the older generations – our grandparents and parents – worked to pay off their mortgage debt as soon as possible. My maternal grandparents never had a mortgage because my grandfather built their home, and he and my grandmother lived in it for over five decades.

My mother and father bought a home when my father first got out of the Navy, but when he left us five years later, my mother was unable to secure a job that could allow her to keep up with the mortgage. As a result, we moved around a lot, and I hated it. I decided early on that I’d always want to own so I could stay in one place like my grandparents.

I Want to Be Like Her

I remember once going to a friend’s mother’s home when I was just 20. The mother’s home was completely paid for; a ranch style, four bedroom home with a pool in a nice neighborhood. Granted, maybe too big for a couple with an empty nest, but while she and her spouse had no monthly payment, my rent was $200 a month for a tiny travel trailer.

I thought it was the neatest thing to own a lovely home and not have a monthly payment. That thought has always stuck with me.

Our Mortgage History

My husband and I bought our first home in the ’80s, but we divorced, selling the home and going our separate ways a few years later. Sometimes I think of how we might have had the house paid off had we stayed together. On the other hand, the neighborhood has degraded in the past two decades.

My husband and I reconciled and remarried and bought another second home, this time in a rural area where we could have a few acres of land. We are hoping to refinance and convert our 30-year mortgage into a 15-year mortgage. Currently we have 23 years left on our mortgage at 7.375%; the 15 year mortgage would be 5.125%.

I personally do not think that mortgage debt is an okay debt. I look at it as any other type of debt, whether that be school loans, vehicle loan or credit card debt. You are not free when you owe money to someone else.

Where do you stand? Do you think mortgage debt is an “okay” debt?