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Mortgage principal paydown
Posted on 7/23/22 at 2:17 pm
Posted on 7/23/22 at 2:17 pm
Close to the middle of a 15 year home mortgage fixed at 30%. Owe about $170k and sending in a $20,000 principal payment this week to knock down to $150k. Still have about $75k in cash after this.
55 years old and SICK of the corporate grind. 5 year plan to retire at 60 and cannot get here soon enough!!!
Heineken Light iced down and ready to pop!
55 years old and SICK of the corporate grind. 5 year plan to retire at 60 and cannot get here soon enough!!!
Heineken Light iced down and ready to pop!
12
Posted on 7/23/22 at 2:18 pm to FlowMaster
3% that is :)
Posted on 7/23/22 at 2:19 pm to FlowMaster
What is the home value?
Posted on 7/23/22 at 2:32 pm to AUCE05
About $650k - $675k conservatively
Posted on 7/23/22 at 3:02 pm to FlowMaster
Something to think about. You could refi and cash out some equity. For example. Dumping 500k in SCHD would cover your house payment per month while still giving decent growth. You could retire sooner.
Posted on 7/23/22 at 3:24 pm to AUCE05
quote:
Something to think about. You could refi and cash out some equity. For example. Dumping 500k in SCHD would cover your house payment per month while still giving decent growth. You could retire sooner.
Outside of the fact that you won’t find another 3% rate right now, this is probably a bad idea
Posted on 7/23/22 at 3:35 pm to AUCE05
(no message)
This post was edited on 4/29/23 at 7:38 pm
Posted on 7/23/22 at 3:39 pm to AUCE05
Yes, OP should refinance his 3% mortgage for a 6% one. Brilliant
Posted on 7/23/22 at 4:06 pm to Upperdecker
Why is the op even asking …sell now and rent. Buy when you figure out where you want to retire to…
Posted on 7/23/22 at 4:21 pm to natsoundup
Keep in mind that you are now on the aggressive side of the amortization curve. The overall majority of your monthly payment is now going straight to principal vs the other way around in the beginning of your mortgage. Will be even more after the principal reduction.
Posted on 7/23/22 at 4:30 pm to FlowMaster
quote:Owning your home outright is never a terrible option. Personally I don't have any mortgages. However, while inflation is 9.1% you might want to consider putting that $20k to use somewhere else. You can always pay down the mortgage later with a larger nut. You're hedging inflation and "sticking it to the man" right now with the 9.1% inflation / 3.0% mortgage spread.
Close to the middle of a 15 year home mortgage fixed at 30%. Owe about $170k and sending in a $20,000 principal payment this week to knock down to $150k. Still have about $75k in cash after this.
55 years old and SICK of the corporate grind. 5 year plan to retire at 60 and cannot get here soon enough!!!
Heineken Light iced down and ready to pop!
Posted on 7/23/22 at 5:29 pm to FlowMaster
Put the $20k in I bonds and earn 9% for now. Probably best to invest vs pay down a 3% mortgage. Do you already have plenty saved for retirement? If not, probably need to be more aggressive with that $ to make retire by 60 feasible. If you do have enough, look into rule of 55 to access 401k early no need to wait until 59.5 if you want to leave the grind.
Posted on 7/23/22 at 7:04 pm to FlowMaster
quote:
fixed at 30%
I almost had seizure on your behalf!
Whew, 3%!
Hear you on corp grind!
My thoughts would be to rid of bloat in lifestyle first and reduce cheap debt (eg, 3% mortgage) in descending sequence, all based upon what your nest egg is projected to produce in income to cover expenses.
If mortgage principal paydown is necessary part of the financial math, good on you and make it right as soon as possible to meet your "elimination of corp grind" (applaud you for that!).
All things equal, I tend to think cheap debt elimination goes last in financial math descending order of things that need to happen to enable exiting the corporate grind. However, having just spent a couple of weeks at HQ of my company's worldwide office, I hear you loud and clear.
Good luck!
Posted on 7/23/22 at 7:21 pm to AUCE05
quote:
Something to think about. You could refi and cash out some equity. For example. Dumping 500k in SCHD would cover your house payment per month while still giving decent growth. You could retire sooner.
Horrible advice. Just wow.
Posted on 7/23/22 at 7:44 pm to Fox McCloud
quote:
Something to think about. You could refi and cash out some equity. For example. Dumping 500k in SCHD would cover your house payment per month while still giving decent growth. You could retire sooner.
Dumbest advice ever. If cashing out do a damn HELOC, but that would Even be dumb
Posted on 7/23/22 at 8:33 pm to FlowMaster
Math will usually tell you to invest and not pay down a mortgage.
Psychology and peace of mind say pay down the mortgage.
I’m 63 and I retired at 61 with no mortgage. It was worth it to pay off for me. Debt hangs over you when you are not bringing in an income.
Psychology and peace of mind say pay down the mortgage.
I’m 63 and I retired at 61 with no mortgage. It was worth it to pay off for me. Debt hangs over you when you are not bringing in an income.
Posted on 7/23/22 at 11:57 pm to TorchtheFlyingTiger
quote:
Put the $20k in I bonds and earn 9% for now. Probably best to invest vs pay down a 3% mortgage. Do you already have plenty saved for retirement? If not, probably need to be more aggressive with that $ to make retire by 60 feasible.
This.
There is basically no immediate benefit for a partial pay down on a low interest mortgage. A goal of being debt free at retirement is fine but build that nest egg as big as you can then deploy at your final debts at retirement. IBonds are perfect for that $20 right now and maybe the next year plus.
Posted on 7/24/22 at 2:14 am to Auburn80
Was going to post this too.
At 3% he is essentially MAKING MONEY by not paying this off early because of the inflation at 9%. You’d basically be paying an extra 6% to pay down a little principal now. I’d invest that amount now and revisit paying down the mortgage when inflation eventually comes back down
At 3% he is essentially MAKING MONEY by not paying this off early because of the inflation at 9%. You’d basically be paying an extra 6% to pay down a little principal now. I’d invest that amount now and revisit paying down the mortgage when inflation eventually comes back down
Posted on 7/24/22 at 8:46 am to Im4datigers
quote:
Dumbest advice ever.
IKR. that much principal dumped into a dividend paying only 3.4% in this current climate? wow. quote:
If cashing out do a damn HELOC
yup. he can use it with velocity banking IF he wishes to pay down later.
quote:
but that would Even be dumb
yeah at his interest rate and based on amount he owes i'd sit tight for now in this climate and invest.
Posted on 7/24/22 at 8:53 am to FlowMaster
Good for you bro!
Most people never know the feeling of waking up and not having any real debt.
When you don't have a car payment or a house payment your life decisions are 100% different.
Most people never know the feeling of waking up and not having any real debt.
When you don't have a car payment or a house payment your life decisions are 100% different.
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