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#1 of 70 Old 02-13-2010, 09:30 PM - Thread Starter
 
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I received a good-sized life insurance policy last year when my ex-husband passed away. It's a little more than 3x my current mortgage. About a third of it went to my son's 529 fund, an emergency savings fund and a kitchen/bath remodel fund. Another third has been invested for retirement. I don't have any debt other than the mortgage, so didn't have to put anything toward that.

The other third I planned to use to pay off my mortgage, but I'm finding it hard to write the check. After a financially challenging couple of years when my ex was out of work and didn't contribute any child support, and given the current economic climate, there is much relief at having so much cash at hand.

I don't have any trouble paying the mortgage on my current income. My investments are currently running neck and neck with the interest rate on the mortgage (around 5 percent) - though of course they have the potential to go much higher, or lower. The "mortgage fund" is currently with ING Direct, earning about 1%.

Would you pay off your mortgage in this situation? Invest? Or do something else with the cash? I don't think I'll ever have such a large sum of money at my disposal again so am reluctant to part with it, although it would be wonderful to be completely debt-free.

it's not a bad financial problem to have, but I seem paralyzed by indecision at the moment.
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#2 of 70 Old 02-13-2010, 09:51 PM
 
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I would totally pay off the mortgage; since you have the means to pay your mortgage each month, you could invest that money towards paying off other debt or building up savings. This is a once in a lifetime type opportunity... grasp it!

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#3 of 70 Old 02-13-2010, 09:59 PM
 
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I totally agree!

I would pay it off and then the monthly payment you have been paying out start saving it up for other things! It would be so amazing to be so debt free!


Good luck with your decision momma!

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#4 of 70 Old 02-13-2010, 10:01 PM
 
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Since you're easily able to meet the mortgage, I would put the money into retirement or other savings. What if housing prices tank and you're not able to sell the house if you want some day, or have to take a big loss? That would be money wasted.

Or, I'd use it to buy rental property so that you will have another source of income.
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#5 of 70 Old 02-13-2010, 10:20 PM
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I'd pay off half of it.

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#6 of 70 Old 02-13-2010, 10:27 PM
 
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Pay it off! The old "wisdom" of invest all your money now is over. You cannot guarantee the market will go up and it will most certainly go down again. Also you house is not an "investment" it is a place to live and won't it be nice to know that no matter what you and you son have a place to live?

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#7 of 70 Old 02-13-2010, 10:37 PM
 
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Do you plan on moving? Is this the house you want to live in for a loooong time? If this is a house you're going to keep and you have no plans to move, I would pay it off. Use the money you're currently using to pay your mortgage to save for something else.

What a nice position to be in!

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#8 of 70 Old 02-13-2010, 11:05 PM - Thread Starter
 
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Good input, thanks! Some of you asked if we are planning to stay here forever, or suggested buying a rental property. Those actually bring up a 3rd option I've been considering: use the money to buy a new place, and rent out this one. It's a small (900 sq ft) condo and I would love more space with a playroom for my son and an office for me (I work at home).

But - although rent here (Cambridge MA) would usually cover the mortgage easily, this isn't a typical rental market. A unit down the street from me has been empty for months, which is highly unusual. I'm not sure I have the fortitude (and I definitely don't have the experience) to be a landlord in a down market.

This option would also require me to take on a bigger mortgage, which I'm reluctant to do. But it does maintain investment in this place, which has increased quite a bit in value since I bought it 10 years ago.

Would love additional thoughts - thanks!
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#9 of 70 Old 02-14-2010, 12:01 AM
 
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If you sold right now would you make money?

Im thinking if you did sell, made money, then put down the amount that you planned on paying off your current mortgage/using the money you made on current house for fees and towards a down payment would you still have a bigger monthly mortgage payment? or would it balance out in a sense. I prob worded that quite wrong...

If it was me and I could
a) make money selling my current house/REALLY wanted to sell my current house
b) had enough money to make a sizeable downpayment so that my mortgage would be no more then it is currently
Then I would sell if it would truly make me happy to be in a new house

BUT if I would lose money/didnt want to move I would pay off my mortgage. Gosh that would just be so amazing...in our case it would be an extra almost 900 a month! I just couldnt imagine that! And our mortgage is on the low side for where we are.

I personally would pay off my mortgage.

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#10 of 70 Old 02-14-2010, 12:17 AM
 
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Mortgage for all the reasons PP's have said. A rental will be an ongoing hassle and possibly lose money. The mtg is a guaranteed 5% return. What a great problem to have!
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#11 of 70 Old 02-14-2010, 12:31 AM
 
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I would pay off the mortgage. Then take your mortgage "payment" each month to build up your liquid savings. It seems that you have spent the rest of it well too!
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#12 of 70 Old 02-14-2010, 12:47 AM
 
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Originally Posted by StephandOwen View Post
Do you plan on moving? Is this the house you want to live in for a loooong time? If this is a house you're going to keep and you have no plans to move, I would pay it off. Use the money you're currently using to pay your mortgage to save for something else.

What a nice position to be in!
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Originally Posted by caiesmommy View Post
If you sold right now would you make money?

Im thinking if you did sell, made money, then put down the amount that you planned on paying off your current mortgage/using the money you made on current house for fees and towards a down payment would you still have a bigger monthly mortgage payment? or would it balance out in a sense. I prob worded that quite wrong...

If it was me and I could
a) make money selling my current house/REALLY wanted to sell my current house
b) had enough money to make a sizeable downpayment so that my mortgage would be no more then it is currently
Then I would sell if it would truly make me happy to be in a new house

One of these options.

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#13 of 70 Old 02-14-2010, 07:20 AM
 
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There are other options if you are not quite ready to pay it off completely. You could pay off a percentage of it, possibly even re-financing (maybe to 15 years?)the rest to get a lower interest rate so that some conservative investments could actually be earning more (coupled with the income tax deduction you would receive from the mortgage payment). If that was the case, you might decide to pay extra principal every month or every year to reduce the term of your loan as well. I realize that paying off the mortgage is popular with dave ramsey-ites, but there are other rational financial advisors that make a good claim for diversified investments instead. Try to run the numbers as carefully as you can with different scenarios. There really is no huge rush to make a desision right away. If it is not the house you want to spend the rest of your life in (maybe since you work from home there is another, lower cost of living, area that might work better).
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#14 of 70 Old 02-14-2010, 10:18 AM
 
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It sounds like you've invested most of it - about 2/3? So yes, I would (and have) paid off a mortgage in that situation. It was wonderful. Take the money you'd normally spend on mortgage payments and invest it. It will add up and you can take your time and decide if you'd like to buy something bigger with that money.
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#15 of 70 Old 02-14-2010, 10:30 AM
 
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I would pay it off, then invest the payment. Because it's just your income supporting yourself, the security of not having that monthly obligation if you lost your job would make me feel good.

You could also pay down part of your mortgage to shorten the term and still keep a good cash reserve.
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#16 of 70 Old 02-14-2010, 10:41 AM - Thread Starter
 
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Originally Posted by caiesmommy View Post
If you sold right now would you make money?

Im thinking if you did sell, made money, then put down the amount that you planned on paying off your current mortgage/using the money you made on current house for fees and towards a down payment would you still have a bigger monthly mortgage payment? or would it balance out in a sense. I prob worded that quite wrong...
Nope, you are right, that's another option. I have a lot of equity in the condo even in the current market since I bought it 10 years ago, so another possibility is to sell, take the proceeds plus some of what I'd have used to pay down the mortgage, and put a large down payment on a new place so that the mortgage would be pretty much what I pay now. I would do this if I could find the perfect property - one that I thought I'd want to live (and work) in for the rest of my life.

Financially it would make total sense to look in another town since mine is one of the most expensive housing markets in the country. But I love this city and have a great community here, which is important as a single mom. Public schools are good, it's safe and beautiful, and the cultural and entertainment options are endless. My current home suits me and my 3-year old very well - but I have to admit that 10 or even 5 years from now, we might both feel a bit crowded in the space!
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#17 of 70 Old 02-14-2010, 10:46 AM - Thread Starter
 
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I would pay it off, then invest the payment. Because it's just your income supporting yourself, the security of not having that monthly obligation if you lost your job would make me feel good.

You could also pay down part of your mortgage to shorten the term and still keep a good cash reserve.
Yes, as a sole supporter, I love the idea of keeping my monthly expenses as low as possible. Health insurance makes me the most nervous; I'm pretty sure I could freelance if I lost my job, but the price of equivalent health insurance is daunting.
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#18 of 70 Old 02-14-2010, 12:42 PM
 
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I wouldn't. I'm assuming you have a fixed-rate mortgage. If we end up with the kind of inflation that I expect we will end up with over the next 15 years, a low-interest mortgage is going to be like having money in your pocket. When you have (low fixed-rate) debt and the interest rates go up, you're going to be getting much more bang for your buck than you would if you had paid off your mortgage. If your job is stable, your investments are stable, your home life is stable, I wouldn't change a thing. We could have paid off our mortgage 10 years ago. I've been one of the lone dissenting voices here in F&F about mortgages. I think a person should carry one if it's not a burden. (Ours is about 7% of our annual income, so obviously we're not mortgaged up to our eyeballs, so take my advice from that perspective, as well.) It's probably going to be some of the cheapest money you'll ever borrow.

If it were to look like we're about to head into a sharp deflationary cycle, I'd take the money and pay it off. But only in that case.

BTW - reputable financial advisors (such as Suze Orman, Clark Howard, John Bogle) have all said that unless you plan to live in a house for the rest of your life (or until retirement), you shouldn't pay off the mortgage with a lump sum.
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#19 of 70 Old 02-14-2010, 01:05 PM
 
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I would pay off the mortgage too. How wonderful it would be not to have to pay that each month!

If you are reluctant to do that, perhaps you could pay 2 or 3 times the amount due each month. You don't have to actually refinance it. (assuming you have a low rate that you want to keep, and no pre-payment penalty). You just pay the monthly amount AS IF you had a 15-year instead of a 30-year.

Grab a mtge amortization spreadsheet and plug in some different numbers. You will be shocked at the amount of money you will not be wasting in the long run!

Paying interest is crazy if you don't have to. You could be paying yourself that interest if you invested it. Better you than the bank!!

Also - the amount of "tax savings" is not anywhere near the amount of amount actually paid in interest each year. Tax savings is NOT a good reason to keep a mtge.

In this market - I would definitely keep the current house. ESPECIALLY in Cambridge where real estate is expensive! You could be sitting on a goldmine!

Can you do a massive declutter to make it seem bigger? Perhaps you could spend a couple thousand on organizing cabinets etc. and make it seem better, larger, and make your daily life more efficient. Perhaps even springing for a professional organizer person would be worth it.

If the apt down the street has not rented, I would not try to rent yours out. I also would not take on a bigger mtge in this economy.

Good luck mama!
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#20 of 70 Old 02-14-2010, 01:19 PM
 
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Paying interest is crazy if you don't have to. You could be paying yourself that interest if you invested it. Better you than the bank!!
She already is paying herself that interest by having the money invested. The difference is right now it's ALL invested and if she paid off her mortgage it would take her a decade or two to reinvest the money that's already there. Low fixed-rate mortgages are cheap money... that's why even rich people carry them. They can make more money carrying a mortgage than they can save by not having one. Unless you've overinvested in your home (which many people have and is why we had this housing crisis in the first place), carrying a mortgage is part of building wealth. At least that is what I have learned from the gurus. I'm no financial expert, but I read them a lot. I'm just restating what I've read.
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#21 of 70 Old 02-14-2010, 01:25 PM
 
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Since it sounds like you believe you will eventually want a new place . . .

What are the chances of you selling the condo?

And, what are the chances of you finding the house you want to live in for the next 10+ years, right now?

Right now, you're in the position where it doesn't even really matter if you only cover the remainder of the mortgage with the sale (still try to do this). Then you still have the remainder of the insurance payout as a rather decent down payment for the house you want, at a time when the housing market is depressed and mortgage rates are hovering at about 5%.

What I would do in your position is to take a good look at the real estate market around you, to see what's out there. See if you could sell your condo at at least enough to cover the mortgage, and see what percentage of purchase of a house you really want your remaining insurance money is going to be (and find out what mortgage payments after that down payment will be like). If it was possible to sell the condo to cover it's mortgage, and use your insurance money on a better place that you'd be willing to live in long-term, especially if the mortgage payment is the same or lower, that's what I would do.
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#22 of 70 Old 02-14-2010, 02:06 PM
 
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I wouldn't. I'm assuming you have a fixed-rate mortgage. If we end up with the kind of inflation that I expect we will end up with over the next 15 years, a low-interest mortgage is going to be like having money in your pocket. When you have (low fixed-rate) debt and the interest rates go up, you're going to be getting much more bang for your buck than you would if you had paid off your mortgage. If your job is stable, your investments are stable, your home life is stable, I wouldn't change a thing. We could have paid off our mortgage 10 years ago. I've been one of the lone dissenting voices here in F&F about mortgages. I think a person should carry one if it's not a burden. (Ours is about 7% of our annual income, so obviously we're not mortgaged up to our eyeballs, so take my advice from that perspective, as well.) It's probably going to be some of the cheapest money you'll ever borrow.

If it were to look like we're about to head into a sharp deflationary cycle, I'd take the money and pay it off. But only in that case.

BTW - reputable financial advisors (such as Suze Orman, Clark Howard, John Bogle) have all said that unless you plan to live in a house for the rest of your life (or until retirement), you shouldn't pay off the mortgage with a lump sum.
I'm in this camp. Our only debt is our mortgage, and as tempting as it would be to have no debt at all, we won't stay in this house forever. Maybe a couple more years before we move to a safer neighborhood with better schools. We would only consider paying off the house if we were going to be here forever or were closer to retirement. We have equity in our home and will just depend on that to buy our next home (and not change the mortgage payment amount). Like PP, our mortgage does not account for a huge chunk of our income, and that plays a significant role in whether we would pay down the debt.

Just my opinion, though. If you have a reputable financial adviser, I would talk with him/her about it. They are the only ones who can give truly good advice because they know all of your circumstances, goals, etc. It's fun to get opinions on the forum, but I would work with a well-respected, conservative, CFP on this kind of thing, personally.

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#23 of 70 Old 02-14-2010, 05:36 PM - Thread Starter
 
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Some great points, thanks! I'll add a bit more detail because I am really appreciating all the perspectives (although I will definitely consult a professional as well):

My mortgage is a 30-year, fixed rate 5% with 23 years left (we refinanced twice since buying it). No prepayment penalties, and I do like the idea of paying as if it's a 15-year. I was thinking of refinancing to a 15-year if I could get a significantly lower rate and keep my mortgage payments close to the same, but I haven't actually done any due diligence as to whether that's realistic.

I really like the idea of decluttering - I think with some changes, this space could open up much more. My ex liked big, heavy furniture, and the reality is I have a lot of things that are just too much for the space. I hate to let go of quality stuff, but it would make a difference.

I think I could easily sell my condo now - I've been looking quite a bit since the beginning of the year, and the inventory in Cambridge is poor (anyone who doesn't absolutely have to sell, isn't). Good properties go quickly, generally for the asking price. But that also means my chances of finding the "perfect" new home aren't great. I think things will open up over the next few months, so I'll keep looking.

I don't particularly want to be a landlord and the current rental market scares me, but holding on to this place no matter what has its attractions. The condo across the hall from me, which is a mirror image of mine (nicer kitchen though), just sold for almost $200k more than I paid 11 years ago. My ex and I were very, very lucky to buy just before the market exploded, and to find a place that needed updates we could do ourselves.

If I could only add two more rooms and a parking spot to this place, I'd never leave.
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#24 of 70 Old 02-14-2010, 05:38 PM
 
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I would not pay off the mortgage in your circumstances for many reasons. Others have touched on the financial reasons, so I'll mention your own instincts. You have hesitated for a good reason. Heed your own internal voice.

I also agree with velochic and Geigerin about financial advisors/gurus. I have nothing against Dave Ramsey. I think he is helping a lot of people! However, his information may not suit your circumstances. A financial advisor you can talk to about your specific circumstances would be best. A mix of financial gurus you can read on your own would be good, too. Ramsey included in the mix, if you like, but not just 1-2 gurus....check out at least 3-4 for more well-rounded advice. The F&F forum is fun, but limiting. No one here really knows your situation in all its complexities.

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#25 of 70 Old 02-14-2010, 05:40 PM
 
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Pay it off! The old "wisdom" of invest all your money now is over. You cannot guarantee the market will go up and it will most certainly go down again. Also you house is not an "investment" it is a place to live and won't it be nice to know that no matter what you and you son have a place to live?


I would love to have the security of knowing that no matter what, I will always have a home.

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#26 of 70 Old 02-14-2010, 08:50 PM
 
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We paid off our mortgage 6 years ago and I highly recommend it. If you are not planning on selling, that's what I would do. It's a great feeling.
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#27 of 70 Old 02-14-2010, 09:56 PM
 
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She already is paying herself that interest by having the money invested. The difference is right now it's ALL invested and if she paid off her mortgage it would take her a decade or two to reinvest the money that's already there. Low fixed-rate mortgages are cheap money... that's why even rich people carry them. They can make more money carrying a mortgage than they can save by not having one. Unless you've overinvested in your home (which many people have and is why we had this housing crisis in the first place), carrying a mortgage is part of building wealth. At least that is what I have learned from the gurus. I'm no financial expert, but I read them a lot. I'm just restating what I've read.
I'm no expert but have read a lot of experts too, but not Dave Ramsey. That being said, I disagree w/ the old idea that carrying a mortgage as part of your wealth. Lots of gurus have been vocal about saying the opposite. Right now we're in a deflationary period. Inflation is actually around .8%, the lowest it's been in decades. The Fed pumped a crapload of money into our economy, the prime rate is near zero, and we still have no inflation. That's not good! Here's why I stick to my opinion to pay off the mtg on a house that has already appreciated in value:

**mtg at 5% means 5% ROI guaranteed plus whatever appreciation her area enjoys
**no investment--mutual fund, bond fund, index fund--guarantees either a return or a protected return. My Fidelity's last prospectus for large cap over a 10 yr span gained 2% Over a decade! Ups and downs and even Warren Buffet can't time the market. I don't see another bubble coming anytime soon.
**CDs/money markets are guaranteed, but you won't get a 5% rate.
**a house is an asset in hand. She can sell, she can take out equity, she can rent it. It's already appreciated in value over time, so at this point she can't lose money, unlike buying stocks, bonds, precious metals, etc.

The only downside I see is she'll no longer be able to write off the interest, but most likely she takes a standard deduction anyway. That's another thing-- investment gains will be taxed and that's almost certain to rise, maybe 20%, maybe more, unless of course she puts it in an IRA, but then she can't get at it and I go back to what investment is safe/likely to rise. With cost avg she'd be better to put in monthly amounts rather than a lump sum now, esp since P/Es are still high and we just came off a big rally.

To me, paying off the mtg is free $$.

ETA I don't think paying off your mtg is the answer for everyone, just for the OP who has college/retirement/emergency funds, an appreciated property, and a wad of cash to invest. To me it seems like the best use of her money.
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#28 of 70 Old 02-14-2010, 09:57 PM
 
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I would totally pay off the mortgage; since you have the means to pay your mortgage each month, you could invest that money towards paying off other debt or building up savings. This is a once in a lifetime type opportunity... grasp it!
Yup, this.

Or as I've heard Dave Ramsey ask (please don't throw tomatoes at me if you don't like him), would you take out a loan in order to invest money in the market? If not, pay off the mortgage, and that frees up your income to be your big wealth-building tool and you can sock away as much money as you want to into burying silver in your yard or into mutual funds or whatever floats your boat.

Or do the math. See how much your house will have cost overall between the mortgage and interest now if you paid it off this year. Compare that to the total of if you paid it off in 15 or 23 years. Big difference, correct? Then decide which way you want to go.

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(If you're curious, 2003, 2006, 2008, 2010, and yes, it's a busy house)
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#29 of 70 Old 02-15-2010, 08:14 AM
 
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Long post, sorry, but wanted to address everything to help you and others understand why I'm thinking the way I am.

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Originally Posted by newbymom05 View Post
I'm no expert but have read a lot of experts too, but not Dave Ramsey.
I don't like Dave Ramsey, either, but what you are saying is pretty much what he preaches. Not sure if you knew that you are agreeing with him.
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Originally Posted by newbymom05 View Post
That being said, I disagree w/ the old idea that carrying a mortgage as part of your wealth. Lots of gurus have been vocal about saying the opposite.
Who? Seriously, I haven't heard anyone saying to pay off a mortgage with a lump sum. I'd like to read these gurus and understand their rationale, as all perspectives are valuable.
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Originally Posted by newbymom05 View Post
Right now we're in a deflationary period. Inflation is actually around .8%, the lowest it's been in decades. The Fed pumped a crapload of money into our economy, the prime rate is near zero, and we still have no inflation. That's not good!
Not true. Our current inflation rate is 2.7%. That's low, but it's being kept artificially low. The Fed has that power. Just as Greenspan manipulated rates in the 90's. It's pretty simple economics... we have an inflated dollar and at some point inflation will follow. I don't believe it will be Hyperinflation as some do... that's only happened a couple of times in recent history (Zimbabwe and Argentina that I know of). I lived in Russia during the 90's and even then, with high inflation, it wasn't Hyperinflation. It was still VERY difficult. Same thing had happened... the ruble had been artificially valued just like our dollar is and when they couldn't do that anymore, they had inflation. I've lived through high inflation, so I know what to expect. Paying off my home would be the LAST thing I would do right now. Well, I guess it is, since we could pay it 5 times over again still don't. I feel confident in our path and the financial planner we occasionally consult agrees.
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Here's why I stick to my opinion to pay off the mtg on a house that has already appreciated in value:

**mtg at 5% means 5% ROI guaranteed plus whatever appreciation her area enjoys
**no investment--mutual fund, bond fund, index fund--guarantees either a return or a protected return. My Fidelity's last prospectus for large cap over a 10 yr span gained 2% Over a decade! Ups and downs and even Warren Buffet can't time the market. I don't see another bubble coming anytime soon.
**CDs/money markets are guaranteed, but you won't get a 5% rate.
**a house is an asset in hand. She can sell, she can take out equity, she can rent it. It's already appreciated in value over time, so at this point she can't lose money, unlike buying stocks, bonds, precious metals, etc.

The only downside I see is she'll no longer be able to write off the interest, but most likely she takes a standard deduction anyway. That's another thing-- investment gains will be taxed and that's almost certain to rise, maybe 20%, maybe more, unless of course she puts it in an IRA, but then she can't get at it and I go back to what investment is safe/likely to rise. With cost avg she'd be better to put in monthly amounts rather than a lump sum now, esp since P/Es are still high and we just came off a big rally.
*On a 5% loan, that's saving 5% over the course of 30 years if you pay it off at the very beginning. However, mortgage amortizations FRONT LOAD the interest in a loan... so you're paying more like 90% interest up front and .01% interest in years 28, 29, 30 and it averages to 5% over 30 years. If you're already several years into a mortgage, then you're not actually saving that 5% by paying off the rest of the loan... you've paid tens of thousands in interest already. If you pay it off in a lump sum at the beginning (which doesn't make sense, anyway... why get a mortgage if you can pay cash?), THEN you're actually saving 5% over 30 years. If you pay it off say, 10 years in, you're actually only saving about 2.5% on your loan.

*There's a heck of a lot more to investing than just Funds and CDs. That's why diversification will allow you to expand your wealth in all market situations. If you're not sure how to diversify your investments across many different vehicles, then you're right... you either need a CFP or not invest at all. Also, if you're not in it for the long run (15, 20 years), then it becomes riskier, yes.

*We've already seen that a house is not necessarily an asset in hand. How many people here bought a home, who can now not afford it and have had to take major losses on them? A home is not a guaranteed investment any more than the stock market is. Even owning a home is not guaranteed. If you can't afford the taxes and insurance, you still might lose it. And if all of your money is tied up in a home, then if you CAN'T sell it, getting out and starting anew somewhere will be impossible. You can still lose your home to the tax man. This was common in the 30's. Putting all of your money into a home, especially if it's a SHORT TERM investment, is no different than putting all of your money into a single stock.

*Dollar cost averaging is not an option... she already invested a lump sum. She would have to cash out her investments to pay off the mortgage. At this point, she might have to take a realized loss to take the money out of her investments or have to pay capital gains if she's made gains. At this point, she's just paying marginal tax rate on any realized dividends and gains and I don't think that is going up for the middle class anytime soon. I'm not sure what relevance the P/E ratios has to anything... are you saying the market is still overinflated and you expect a crash again? Most of the Dow has done some self-correcting.
Quote:
Originally Posted by newbymom05 View Post
To me, paying off the mtg is free $$.

ETA I don't think paying off your mtg is the answer for everyone, just for the OP who has college/retirement/emergency funds, an appreciated property, and a wad of cash to invest. To me it seems like the best use of her money.
We have all of the above, although our biggest "wad of cash" is diversely invested and our other "wad of cash" is just a 1yr emergency fund in MMMF. I don't think it's right for us to pay off our house, however dh is a tenured professor with great job stability, he's 11 years from retirement at 65 and our house will be paid off before then. I said as much for the OP... mentioning stability in job, family, and wanting to stay in the home as criteria under which I would say DON'T pay it off. I don't think it would be right for *most* people to pay off their mortgage because you're putting all of your eggs into one basket.
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#30 of 70 Old 02-15-2010, 11:20 AM
 
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I don't believe it will be Hyperinflation as some do... that's only happened a couple of times in recent history (Zimbabwe and Argentina that I know of).
Actually, it's happened a lot more frequently than that : http://en.wikipedia.org/wiki/Hyperin...hyperinflation
It seems that whenever you have a paper currency backed by nothing, hyperinflation is bound to happen eventually. And you did actually live through hyperinflation in Russia, so congrats! Anytime the inflation rate exceeds 10% per month, it can be considered hyperinflation.

Having said all that, I wouldn't pay off my mortgage if I were you. With 23 years left and a low fixed rate along with housing prices poised to fall morethis year, I would put the money in an asset that isgoing to gain value, real estate and keeping it in cash are out.

Mother to one (8/08) with another on the way (04/11)
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