Saturday, February 08, 2014

Slumlords R Us

It may have been twenty years ago today that Sergeant Pepper, well, you know. But the time frame referenced in that lyric is also about when we bought our current house. Back them it seemed impossibly large. Of course, kids and clutter slowly filled up the space, and areas and rooms we thought we'd never use found a purpose. The extra space near the furnace turned into a workshop. That finished attic off the den became a playroom, then a bedroom. And the extra storeroom morphed into an exercise room, then an office and eventually into a storeroom/exercise room/office. Now I can sit among old stuffed bookshelves while doing leg presses and checking my email.

But while it was all ours, it was not really all ours. Like most, we needed a bank's help to make it possible. We took out a mortgage to buy the place, then a home equity loan to do some upgrades. Along the way, as rates drifted downwards, we refinanced, extending the term of it all. The net result was that while we were the lords of our castle, we're weren't truly the masters. Not that a guy with an eye shade was telling us what color to paint the walls, but every month he sent us a bill reminding us that he had first dibs on the place.

As time went on we got a better handle on our financial picture, and started to alter the balance of power. Once the kids'college educations were well in hand, we started to kick a little extra towards the mortgage each month. Likewise as the car payments wound down. Each drib and drab we put towards the principal reduced the overall total, steadily eroding our 30 year albatross. And as the late Senator Everett Dirksen said, a billion here, a billion there, and pretty soon you're talking real money. To be fair, our scale was different by a dozen or so zeros, but the idea was the same.

Finally it built to a point that this past week we got a letter from our friend with the eyeshade telling us that we were within sight of a goal that we wondered if we would ever reach. One more check, and they would say what's done is done. A little legal mumbo jumbo, some indecipherable document filed with the county clerk, and hear ye, hear ye, let it be known to all who care to look that we are the sole (and soul) owners of these here premises. Our mortgage would be marked paid in full, and we would be slumlords of our own domain.

Doing so meant we would join the ranks of roughly one third of homeowners in the country who own their home outright, from a high of 38% in Pittsburgh to a low of 15% in Washington DC. With divorces and job changes and transfers happening to so many around us, it's becoming more and more uncommon to see people reach this particular milestone. In fact, some financial types would suggest that tying up that much capital in a single hard asset isn't really a good use of your money anyways. You'd be better off extending the loan even further, and leveraging your cash to obtain a better risk/reward profile with a higher alpha or beta or whatever Greek letter means "more money."

But I can tell you from at least our personal experience that, psychically speaking, the argument doesn't hold water. Yes, there are still monthly costs, from taxes to insurance to maintenance and upkeep. But the idea that the underlying dwelling and land is mine, all mine, is deeply satisfying. To paraphrase Charlton Heston, assuming I pay my annual levy to the town, the only way they can now take my house is when they pry it from my cold, dead fingers. And that feels good.

So please come and visit, and know that you are talking to the owner when you cross our threshold. No longer are we mere caretakers for some nameless and faceless functionary sitting in a cubicle in a high rise in Manhattan who holds the master key to the front door. No, the place is ours, lock, stock and triple glazed windows. But do me a favor when you come over: don't lean against the walls. We just had them painted, and now they're all ours.


Marc Wollin of Bedford never thought he would pay off his mortgage. His column appears regularly in The Record-Review, The Scarsdale Inquirer and online at, as well as via Facebook, LinkedIn and Twitter.

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