No Brainer?? Financial Question

[Cindy in NY]

We have been paying extra on the mortgage in order to get it paid off before DH hopes to retire in about 3 1/2 years. We owe a little less than $13,000 and have an interest rate of 5.25%. I've been making payments of $927 a month including an extra $120 in principal. One of our savings accounts has enough in it to pay off the mortgage now and is currently earning only .84%.

Using this money will not affect our emergency money or retirement money. We don't have enough deductions to itemize the taxes so the loss of mortgage interest is not an issue. We would still need to put away $335 a month for insurance and property taxes. That would still leave us with $600 a month to save in something with a higher interest rate and possibly pay for a new car for DH - 13 years old and starting to fall apart.

So - am I missing something or does it make no sense to pay 5.25% when we are only earning .84%??

[Harry Chickpea]

Credit report. If you follow through to the end of the mortgage with the additional, you might be a few points higher on your credit score. Credit scores are increasingly important as insurance rates are now tied to them. Dollar for dollar, you are probably only talking about the cost of a couple meals out.

Plus, having a savings account with 13K in it can make you a preferred bank customer in smaller banks.

I do like the way you think though.

[hercsmama]

I'm certainly no financial wiz, but I'd pay it off, ONLY if doing so will not effect any emergency funds.
We have a Harley payment every month of 426.00 every month, we are currently looking at paying off the remaining 6,000 ourselves. Just to be done with it.
The extra cash will go into savings for us, so If you look at it that way, you could re-save that money in a short time.

[JoePa]

Pay off the mortage

[farmerj]

pay it off and put the savings in mortgage payment into mutual fund payments.

[PackerBacker]

Originally Posted by JoePa

Pay off the mortage

Tomorrow.

[Travis in Louisiana]

I would pay off the loan. Then I would take the money that you would have paid on the note and put in some type of savings.

[PackerBacker]

At this point I would find something safer than a bank to store your money in.

Like a mason jar.

[clovis]

Pay that mortgage off, and do it tomorrow morning.

[MO_cows]

Congrats! If you have other savings for emergencies, heck yes, pay it off. And then do the happy dance!

[TNHermit]

Pay it off!! And check the paper work when you do. Make sure everything is in order. GET A DEED!!
Forget credit scores. I haven't had one for 15 years. HOpefully your readaing this on the way to the bank

[Alice In TX/MO]

Pay it off. If this is your long term home, a credit report score doesn't mean anything to you anyway.

Congratulations!

[oneokie]

Pay it off, get the lien release and have a mortgage burning party.

[Suzyq2u]

Make sure you don't have an 'early pay-off penalty' first...then PAY IT OFF
Congratulations

[MS Farm Chick]

I would pay it off in a heartbeat!

The paint will look fresher, the grass will look greener, and the birds will sing louder. A paid for home is every American's dream.

[Sawmill Jim]

I'm in the pay it off vote . I'm also not a big fan of keeping money in banks . I like silver coins and mason jars . We got a lot of usable things like food ,food, guns ,ammo and silver after you get plenty of the rest .

Should the banks start the old take your money as other country's have there is going to be lots of yelling ,but what else can one do but yell . I think the dollar is going in the tank .

[Rick]

Here is how I see it.

If you don't pay it off, and the banks and the dollar collapse, you have savings the bank will not release, or the money is worthless, AND someone else owns your house, and you CANNOT finish buying it back from them.

[Sawmill Jim]

Originally Posted by Rick

Here is how I see it.

If you don't pay it off, and the banks and the dollar collapse, you have savings the bank will not release, or the money is worthless, AND someone else owns your house, and you CANNOT finish buying it back from them.

Gee someone else get it . Now if you owed say $150,000 i would give a completely different advice

Pay it off! Not sure why you would even question it? Way to go btw!

[Michael W. Smith]

Originally Posted by Suzyq2u

Make sure you don't have an 'early pay-off penalty' first...then PAY IT OFF

Yep, just make sure there isn't an early pay off penalty, and if not, get rid of that payment. Once it's paid off, just continue making your "payment" into savings to build it back up.

Congratulations!