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Question about paying off a house loan
Posted on 1/25/13 at 12:16 pm
Posted on 1/25/13 at 12:16 pm
With the current market the way it is, would investing 40k into eliminating your remaining house payment be a good investment? Rate is 3.75
Posted on 1/25/13 at 12:20 pm to LSUzealot
loaded question... what else would you do with the 40k?
if you can go get 10% return on it then i have your answer... if you don't want that risk then i have your answer
if you can go get 10% return on it then i have your answer... if you don't want that risk then i have your answer
Posted on 1/25/13 at 12:31 pm to LSUzealot
When did you buy the home? How much did you buy it for and what is the current estimated value? 3.75 is a great rate. Do you want to continue living there or looking to move soon?
Posted on 1/25/13 at 12:31 pm to bryso
Yea I figured as much. I know jack shite about investing and I don't like the idea of money being held up in high risk investments.
Even low risk to me, the 3% return over a year, 1,200 bucks; big deal to have no access to the funds. I guess I need to look more long term as that interest compounds over time.
40k invested; 3.5% return each year
What's my net gain in 10 years anyone? It's been a minute since I took a finance class
Even low risk to me, the 3% return over a year, 1,200 bucks; big deal to have no access to the funds. I guess I need to look more long term as that interest compounds over time.
40k invested; 3.5% return each year
What's my net gain in 10 years anyone? It's been a minute since I took a finance class
Posted on 1/25/13 at 12:33 pm to BigAppleTiger
2 years ago for cheap. It's a small condo that went as a short sale. I honestly will likely move out before the year is over but will rent it out as I want to keep it bc of the great value.
Did a 10 year loan so I'm still paying heavy interest vs principal. I think I paid out $1,500 in interest alone this year.
Bought it for 65k. Recently a 1 bedroom sold for 75. 2 are on the market now for 90.
Did a 10 year loan so I'm still paying heavy interest vs principal. I think I paid out $1,500 in interest alone this year.
Bought it for 65k. Recently a 1 bedroom sold for 75. 2 are on the market now for 90.
This post was edited on 1/25/13 at 12:35 pm
Posted on 1/25/13 at 12:39 pm to LSUzealot
If you plan on renting it out it may be a good idea to pay it off and start saving up for any remodeling ,repairs, or contingencies that may come up while renting.
Posted on 1/25/13 at 12:41 pm to LSUzealot
quote:
2 years ago for cheap. It's a small condo that went as a short sale. I honestly will likely move out before the year is over but will rent it out as I want to keep it bc of the great value.
So you're thinking long term investment. Looking at the rental market right now it is very strong. If you can can cover your payments, insurance, and taxes with a rental payment- I would save the money and start looking for your next property. It is a buyer and landlord's market right now. The market is kind of perfect for your situation at the moment. I am assuming Baton Rouge.
Posted on 1/25/13 at 12:43 pm to LSUzealot
Although the market is strong in both those two facets right now- end of the year it may not be the same. Likely...but no guarantee.
Posted on 1/25/13 at 1:15 pm to LSUzealot
quote:
would investing 40k into eliminating your remaining house payment be a good investment? Rate is 3.75
I do not believe so, especially if you are deducting mortgage interest. If you are in the 25% tax bracket then your rate of return is actually 3.75 times (1-0.25) = 2.8%.
Keep in mind that this is not much better than inflation.
Posted on 1/25/13 at 3:39 pm to LSUzealot
just curious where is the condo?
ETA: and where did u get a loan for a condo project?
ETA: and where did u get a loan for a condo project?
This post was edited on 1/25/13 at 3:40 pm
Posted on 1/25/13 at 4:25 pm to bryso
I'm not telling people where I live
I put 20% down. Pretty standard with good credit I thought.
I put 20% down. Pretty standard with good credit I thought.
Posted on 1/25/13 at 4:47 pm to LSUzealot
not typically on a condo... but if u put 20% down likely not an issue..
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