paying off house

mightybooboo · #21 09/02/10, 10:52 AM

Quote:

Originally Posted by Txrider

But they are insured for deposits, it's no risk. And everyone should have a few months worth of income in savings they can get to for an emergency.

Outside that emergency fund, pay off the debt.

No mortgage payment puts that savings cushion back real fast. Couldnt believe how fast our Bank accts grew when we were debt free. And peace of mind? When I couldnt work for 2 years we ALMOST had to start liquidating things,never could have lasted that long with mortgage and debt.

Look how many folks LOSING their homes,not a time for home risking in a very fragile economy.Pay it off,ASAP! Then as economy tanks you will sleep a lot better than those facing debt payments,BTDT!!

mightybooboo · #22 09/02/10, 10:56 AM

Quote:

Originally Posted by Sparrow

No brainer...pay off the mortgage. 50 grand won't go very far once you start taking a thousand here, a thousand there, a few hundred here, you'll nickel and dime the savings and you'll be broke in a year and still owe the mortgage, pay it off.

Listen to Sparrow,this is EXACTLY 100% spot on!

OK,several posts by me,you can see this is a topic near and dear to my heart,HOME is Number One security first and foremost,waaaaaay before 'its an investment' its a roof,warmth,hearth,etc.

BTW,I took EVERY dime beyond 2000 in Bank and applied it to mortgage and saved many many many thousands in interest. We made good enough money but had zero cash,I bought a car and had to finance it,but paid it off ASAP too during that time.Think we wound up with an 11 year mortgage or something,maybe 14? Whatever,saved a FORTUNE in interest payments.

Only 2 people in our Family amongst the whole clan debt free.Guess which 2 families are best off?? Sure isnt the SIL 'who only travels first class' and turned up her nose at our Old Motorhome,who HAD a time share in Hawaii? The 2,500 dollar sink in the bathroom home addition?The new LEASED vehicles that are long gone.You know,the ones in bankruptcy? So much for 'The Princess'

My little house,small property,priceless to us NOW.Not what i WANT,but oh so thankful its what we NEED.

agmantoo · #23 09/02/10, 11:24 AM

Many factors enter into how to best utilize the $50k. Current and future income, credit obligations, age, goals, etc. I would use the money to make more money provided I had no issues with making the current mortgage payment. Interest income from a bank would not even be a consideration. It is difficult to do what everyone else is not doing but that is where money is to be made IMO. Everyone knows that there are a lot of cheap properties on the market. Not everyone realizes that there are folks that have some money that would like to have a place of their own but do not qualify for a conventional loan. I would search the area I live and find a decent mobile home on a very good lot/acreage. These places can be bought for $20K or less. I would buy a couple of these and clean them up, set a new value, and then do an owner finance but with a sizable down payment. The down payment will offset a lot of risks in the purchase. Should the buyer forfeit the down payment will restore the home to put it back on the market. Over time, less than you may first imagine, it is possible to double your money with minimal risks. During the meanwhile, you will have the income, still have title to the properties and can pay the mortgage to your personal home without having earned income plus $10k of the original $50K.

momof2birds · #24 09/02/10, 12:01 PM

Quote:

Originally Posted by Txrider

But they are insured for deposits, it's no risk. And everyone should have a few months worth of income in savings they can get to for an emergency.

Outside that emergency fund, pay off the debt.

Putting money aside is a good idea, but put it into something tangible that has doubled and tripled in value over the last 10 years...precious metals (gold/silver). I don't mean to go off-topic, but our government is printing money like crazy to buy down their own debt, including your deposit insurance. I cannot trust banks any further than I can throw them.

Alice In TX/MO · #25 09/02/10, 12:44 PM

DO NOT BUY GOLD OR SILVER.

Pay off the mortgage.

FrontPorch · #26 09/02/10, 12:50 PM

There are some tax advantages to having a mortgage. You would need to check and see how it would affect you. Although if you have a high interest rate it would do away with any tax savings. Also, in this day and age it would be good to have enough money in the bank as a reserve in case of job loss or disability. Really it depends on your overall financial situation and how disciplined you are.

TedH71 · #27 09/02/10, 12:52 PM

Craziest idea I ever heard. Pay off the house! When he's retired, he'll want the mortgage paid off, trust me. Your income drops drastically upon retirement usually.

BamaSuzy · #28 09/02/10, 12:54 PM

I'd pay off the house as QUICKLY as possible with that money and then NEVER EVER let ANYBODY talk you into taking out another mortgage "to help on taxes" or for any other excuse! Once it's paid off, no matter what happens you have some place to live!

bruce2288 · #29 09/02/10, 01:01 PM

Before you make any decisions, check and see if your mortgage has a prepayment penalty. On a dofferent track, If you owe 50,000 @6%, putting your money in a safe will cost you $3000 in one year.

momof2birds · #30 09/02/10, 01:06 PM

I did say, "pay off the mortgage." Why would a person NOT buy gold or silver after that? I am most interested in that reasoning.

jlrbhjmnc · #31 09/02/10, 01:08 PM

If it were our house, we'd finish paying off the consumer debt, replenish the emergency fund (6 months' household expenses + car replacement fund since our car is how I get to my clients to earn a living) and put the rest on the mortgage (we do not have a prepayment penalty). If you earn an average income, you pay the bank 3 or 4 times more in interest than you get "back" in the tax deduction. Doesn't seem worth it. You might sit down together and check our your tax return from last year and compare the mortgage interest deduction to the amount of interest you paid the bank on the loan.

rxkeith · #32 09/02/10, 01:24 PM

my wife and i, paid off our first house in less than 5 years, back in 1997 when real estate and the stock market were having better times. houses in our area were appreciating at around 17% per year. that was the single best thing we ever did. we have been debt free ever since. i would definitely pay off the house if i had the money. as was mentioned earlier, you can pay yourself the money that was being paid on the mortgage. not having debt frees up your time to do things that you like to do, rather than having to work to earn money to pay a debt. time is more valuable than any perceived tax advantage to having a mortgage. if your husband is reluctant to pay off the mortgage, the two of you can make a list of the pros and cons to paying off the mortgage. on the pro side, FREEDOM, will be pretty hard to beat.

keith

Dutchie · #33 09/02/10, 01:28 PM

Buy an investment property.

Danaus29 · #34 09/02/10, 01:42 PM

I would not buy gold or silver because the prices are very high right now and the coming change in the IRS investment/taxation on sales of gold and silver will guarantee you won't make any money after you sell the stuff.

Pay off all the debt you can while leaving several months worth of income in the bank for a "just in case" situation. Check with your mortgage company to see if you have a prepayment penalty. We do, a $250 prepay penalty. When we get closer to our payoff we will have to figure out how to get out of the penalty.

Txrider · #35 09/02/10, 01:50 PM

Quote:

Originally Posted by momof2birds

I did say, "pay off the mortgage." Why would a person NOT buy gold or silver after that? I am most interested in that reasoning.

Because it is at record highs and could drop by 25% or more in the next couple of years as the economy improves as it has done before?

I wouldn't go 100% into precious metals. In moderation though, yes.

I would pay off the mortgage, if there's no other higher interest debt, and I would keep an emergency fund of a few months income if I could.

There is little better security than having a paid off home, and no other debt, and the ability it opens up to learn to live by saving to buy things like cars and such in cash.

seagullplayer · #36 09/02/10, 01:52 PM

Pay it off if you can. We have about three payments remaining! I sleep better knowing I am that close. Only payment we have.

Imagine your life without a house payment! My company is a little rocky no worries, at this point I could live on unemployment forever...

mnn2501 · #37 09/02/10, 01:54 PM

In the past, it made sense to carry a low intrest rate mortgage because you could earn more by investing the money than you were paying in interest on the mortgage -- this has not been true for about a decade - and putting the money in a safe somewhere -- never ever a good deal, with inflation you are actually losing cash value.

Pay off your mortgage - get out of debt and stay out of debt.
Now do you have a prepayment penality -- if so you would have to run the numbers.

thaiblue12 · #38 09/02/10, 01:59 PM

Because the price of gold or silver will drop and you will loose money. Stock market prices fluctuate and it is not going to make you money for certain.

If I could pay off my house I would do it in a second. Everything I made besides the regular household bills would be mine and I could save up money for years to come Also if the housing market were to bounce back I would profit on the home and not have to pay off the mortgage and get what is leftover.
You can still claim the taxes on your home and a paid off mortgage would look good on your credit report.

The large banks that insure your deposit are not a risk. They cannot keep your money even if they closed. I would prefer to have it safe in the bank, then maybe being stolen or burned up in the house. It is also easier if it is right there to dip into it for this little thing or that little thing and it would dwinddle pretty quick and not get a dime of interest.

mightybooboo · #39 09/02/10, 02:14 PM

No,they cant KEEP your money.However,you can have a Bank Holiday and the Bank reopens with DEVALUED money,maybe 25-50% LESS value. happens all the time in Mexico and just recently Happened in Argentina A FIRST WORLD Nation!THEN they put limits on how much you could withdraw.

If you think money is Safe IN A BANK .....YOU COULDNT BE MORE WRONG. Nor is ANY FIAT currency safe,it can,and is,devalued at will,not to mention the insidious hugely under reported inflation numbers.

Couldnt happen here????
-------------------------
FDR's first act as President was to declare a national "bank holiday"

mightybooboo · #40 09/02/10, 02:20 PM

Gold/silver argument,wont go there.You either get it or you dont,and its YOUR choice,best to you however you play that play.