paying off house

Safe? There is no such thing. Pay off the house. You're paying interest. The interest is almost certainly more than you can earn on any (legal) investment. Paying off the mortgage gives you security and makes you start earning that interest instead of paying it. We pay our debt as fast as possible. This means living without stuff, buying used for what we must have, being very frugal. But it is well worth it.

Cheers

-Walter
Sugar Mountain Farm
Pastured Pigs, Sheep & Kids
in the mountains of Vermont
Read about our on-farm butcher shop project:
http://SugarMtnFarm.com/butchershop
http://SugarMtnFarm.com/csa

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SugarMtnFarm.com -- Pastured Pigs, Poultry, Sheep, Dogs and Kids

I always thought the reason to go to work was because it is fun.... oopps my mistake my reason is I am into pain and suffering

what year did you buy that? 1950?

The official US govt. price of gold was raised to $34 an ounce in 1934. Raised to $38 in 1972 and 42.22 in 1973. In 1968 the floating price(free market) came into effect. The lowest price since then was lowest in 1970(36.02 was the average price for the year)

Momof2kids, you may want to show your hubby this thread. There is plenty of food for thought here.

And please let us know what you decide to do.

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I yam what I yam and that's all what I yam.

Popeye

Good chance the 50k is CASH money, not earned on the books. Suddenly coming up with 50k cash to pay off the mortgage is not only bad idea, it's a terrible idea. You will set off alarm bells all over the place.

Live off the cash money, but groceries and holidays with it, and ramp up the mortgage payments with the "on the books" money.

Don't be stupid.

Pete

Pay off the house.A no brainer under nearly any circumstance.A home that is paid for is a big deal.

1) where did the 50k come from? is there a tax liability attached?

2) what is the remainder owed on the mortgage?

3) how old are you, your husband and any other dependants?

4) what is the rest of your debt?

5) what are the rest of your assets?

6) are there any other sources of income, present or future?

7) what are your financial goals?

8) can you earn more on the 50k than what you owe on the mortgage?

9) what is your shoe size?

PLEASE, sit down with someone who can look at your ENTIRE financial picture and give you some valid options. As much as I love this site, HT is not the place to find THIS answer.

Paul, I respectfully disagree.

We paid off our mortgage from money we had saved.

The only alarm bell going off was at the bank. Three levels of management, plus all of the cashiers were very worried that we were taking our accounts elsewhere.

It really was quite comical.

The idiot branch manager, even as we were leaving with a cashier's check, stopped us, and tried to convince us that we should take out a loan "to go on vacation, buy new furniture, or treat yourselves to a kitchen remodel."

That gal even tried to use the old standby "there are tax advantages to keeping a mortgage" and to "keeping your cash liquid."

I asked her to put the numbers down on paper, and show me exactly how that could be true. Part of me was open to learning if what she said was remotely true, and the other part was just wanting to needle her a little bit. She is one of those "I'm a hot babe with a year and a half of college, and I have this job where I sit at the front of the branch where everyone can see me (and how hot I am), and the only reason I got this job was because I was so cute and beautiful."

It was funny to see her squirm under pressure, and she never did answer my question, except to say "uhhhm" quite a few times.

Thanks for the push.

We don't have $50K to spare now (DD17 hasn't picked a college yet so that cost is still unknown and DH DOES want to retire on schedule) but I plunked a small fraction of that toward paying off my mortgage thereby trimming about 14 months off the end of the loan.

DBro is my financial advisor and keeps telling us don't pay off mortgage, put more in stock market. Best friend says pay off mortgage like she has. But her husband is always buying high and selling low and making plenty of other money mistakes so it is hard to believe they are a good advisor for me.

And I have feared until about now that if we needed to move again it might for some reason be easier to ditch this white elephant of a house if the mortgage were bigger- ie buy a new home for cash and walk out on this one if need be and we were really tempted to rather than have no cash, a house not selling or selling for only the little we owed on it, and a need to live elsewhere. Every house we've sold ends up paying off the mortgage minus a few thousand so it feels like the more the mortgage is paid off the more we pay for the privilege of having owned for those few years.

But even at 4.5% mortgage we get, well, 4.5% interest saved (or 3.5% tax free after the tax deduction) on extra paid into the mortgage and that tops anything else I can do with cash, and why buy stocks now I'll have to sell later (after we quit working) to continue paying this mortgage thereby gambling that the market will earn over 3.5% every year until we sell those stocks to pay those mortgAge payments.

And as I was explaining to DH about having cash laying around or not, he won't just be able to pave the driveway or buy the sports car he's been longing for so quick once I deplete our 'just in case we suddenly have an opporunity' fund. Which led me to realise that paying off the mortgage is somethign I much prefer to DH buying a sports car.

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US Army veteran, military retiree spouse, and military; civilian; British NHS; and VA doctor.

I don't put money in the stock market neither does anyone in my family. I have had many friends lose their shirts on the stock market so frankly that has not held any attraction to me. Don't put the money in the stock market!

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Ted H

You may all go to Hell, and I will go to Texas.
-Davy Crockett

Some mining stocks are making great progress.Im stuck in a 401K and my mining stocks are up 60% in 24 months.Glad I jumped in with both feet when the first rumble came thru the market and got out of retailers that had been doing OK.Only Blue chip I kept was Coke,history says they not only survive depressions,but pay a dividend doing it,anybody can buy a coke.

When the economy is collapsing under fiat dollars,lost forever jobs,etc.... there are other options.Metals (in many forms) are one.Im not investing 10 cents more in market,but Im not giving what I earned to goobermint either,I'll lose it before I'll give it to em!

Pay off the house,just to stay on track,LOL! Then invest all that extra cash you are betting on always having in the future on other things.Because if youre wrong (no job,ill health,deaths,whatever).....you will still have a home.If youre right,its just a temporary delay for the other investments.

As far as Im concerned 50,000 wont break or make me,but a house,thats security.Get that FIRST in your 'investment' portfolio for safety.Being homeless stinks.Big time.

FWIW,works for me,but not for others,we all have different opinions for sure on what works or doesnt.

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Visit Life on the Homestead,a Friendly Forum

Thank you all for the comments . You all have helped me convince my hubby to pay off the house. Thank to all of you
kelly

Wonderful news Kelly! We are just 10 years away from pay off and working to shorten that ourselves!

A little late to the party, but totally, pay off the house. We have no debt, it is a great way to live.

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Growing trees and food in Costa Rica.

Must have been the 60s......

The only thing I still own from the 60s is my name!

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Taxes, in excess of what are needed to fulfill the constitutionally authorized activity of government, are theft

The decision to pay off or not is more complicated than can be adequately answered by us here, with the limited info we have.

Unless I missed it, we don't know quite a bit about the OP financial situation, their mortgage, etc.

I just went through this same analysis myself. I came to the decision that it was better to leave $150k in Roth IRAs earning 4% tax free, and convert to a 3.75% fixed mortgage vs paying it off. After the interest deduction, I will come out ahead...plus I have the flexibility of having the cash, and the security of not having too many of my eggs in one basket.

If I had paid the mortgage off, I would not only net less interest income, I would lose liquidity and I would have almost 20% of my current net worth tied up in the house. I want to be more diversified than that.


Tim

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Taxes, in excess of what are needed to fulfill the constitutionally authorized activity of government, are theft

I sold some a couple of weeks ago. A little silver also and will sell some more silver real soon.

No, a little too high for me now. Just like everything else, there is a time to buy and a time to sell. For me now is the time to sell.

AWESOME!!!!!!

Get the pay off amount ASAP, and get that check in the mail PRONTO.

We jacked around for a few days, waiting to see if we had made the right decision, and then so both DW and I could go to the bank together.

That jacking around was STUPID on my part. The interest was ticking away. In the big scheme of things, the few days interest wasn't that much, but it still sickens me to know I gave them money that I didn't have to.

A few days time could mean $70 to $100 in additional interest.

What would you spend $100 on, if it were just there for you to spend????

Go to the bank first thing Tuesday morning, and then directly to the post office!!!!