- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Paying home mortgage off early
Posted on 3/15/19 at 10:51 am
Posted on 3/15/19 at 10:51 am
I'm thinking of paying my home off early but some have said it's a bad idea. My mortgage isn't up until 2025 but i'm about to have enough cash in savings to just pay the house off and be done with mortgage ect...it's a 15 year loan at 3.5% APR. It would be a good feeling for me at 43 years old to have my home paid for and would free up a big chunk of $$$ monthly in my pocket. What are the drawbacks to doing this?
14
Posted on 3/15/19 at 11:09 am to Gigoleaux
You are 9 years into a 15 year loan at 3.5%, the way amortization works, you are paying practically nothing in interest at this point. So, it's not a "bad" idea as long as you still have a 6 month cash reserve after paying it off, and don't have to touch any of your retirement accounts, and all of your other interest bearing debt is already paid off (car, credit card, etc).
Posted on 3/15/19 at 11:30 am to Gigoleaux
Congratulations! Pay it off! I can’t wait to be in your shoes. I’m in my mid 40’s, wife in her late 30’s and we should have it paid off before I turn 50. Our goal is to pay it off and use that payment for private school once the kids hit 7th grade. Timing should be perfect as the kids are currently in 2nd and 3rd grade.
Posted on 3/15/19 at 11:31 am to Gigoleaux
What else could you do with that money to earn interest?
Everyone talks about stock market average returns over time, but for just 6 more years when the market is at all time highs, maybe you could only consider dividend payouts from blue chips?
Everyone talks about stock market average returns over time, but for just 6 more years when the market is at all time highs, maybe you could only consider dividend payouts from blue chips?
Posted on 3/15/19 at 12:43 pm to Gigoleaux
Paying off the mortgage is never a "bad" idea. It may not net you the most for your money over time but eliminating debt has a value that isn't black and white. You gotta figure out what that is worth to you.
I'm jealous. Wish I could get rid of my mortgage right now.
I'm jealous. Wish I could get rid of my mortgage right now.
Posted on 3/15/19 at 12:53 pm to deeprig9
quote:
You are 9 years into a 15 year loan at 3.5%, the way amortization works, you are paying practically nothing in interest at this point. So, it's not a "bad" idea as long as you still have a 6 month cash reserve after paying it off, and don't have to touch any of your retirement accounts, and all of your other interest bearing debt is already paid off (car, credit card, etc).
I agree, I would just add to be diligent with your newly freed up cash. Don't turn it all into discretionary spending, make sure you are investing in something (whether that's the market, RE, etc is a different discussion).
Posted on 3/15/19 at 1:00 pm to Gigoleaux
paid mine off 7 years ago at a younger age than you. it is completely up to you. all situations are different.
i am glad i did.
i am glad i did.
Posted on 3/15/19 at 1:31 pm to Gigoleaux
I paid mine off a few years ago, was a few years younger than you are now. Yes with a rate that low, you probably could make more investing the money. But the feeling that you are done with paying a mortgage is worth it.
Posted on 3/15/19 at 1:57 pm to TigerintheNO
The math would say you can do better by investing the cash and paying the lower interest rate mortgage. But this guy nails it when he says,
Exactly right - it's difficult to quantify peace of mind or being "debt-free". Could you do better by investing? Yes? Would it feel better to not have a mortgage? Only you can decide that.
quote:
Paying off the mortgage is never a "bad" idea. It may not net you the most for your money over time but eliminating debt has a value that isn't black and white. You gotta figure out what that is worth to you.
Exactly right - it's difficult to quantify peace of mind or being "debt-free". Could you do better by investing? Yes? Would it feel better to not have a mortgage? Only you can decide that.
Posted on 3/15/19 at 2:01 pm to Gigoleaux
There are checking accounts that are paying more than 3.5% right now. Origin Bank has one for 4% and a few other do as well.
Posted on 3/15/19 at 2:22 pm to TigerintheNO
quote:
Yes with a rate that low, you probably could make more investing the money. But the feeling that you are done with paying a mortgage is worth it.
yep. totally up to him. we do not know his situation.
Posted on 3/15/19 at 2:42 pm to deeprig9
The way I think about it is that I cant take off chunks of my house to pay for things, and then put those chunks of my house back on later.
With cash, you can.
Liquidity has value. Even if theres a tiny trickle of interest involved.
With cash, you can.
Liquidity has value. Even if theres a tiny trickle of interest involved.
Posted on 3/15/19 at 2:47 pm to Gigoleaux
No drawbacks. Do it. I did the same thing, have been debt free for 7 years now.
Unfortunately, I'm about to build a bigger house.
Unfortunately, I'm about to build a bigger house.
Posted on 3/17/19 at 7:53 pm to Gigoleaux
Pay it off man peace of mind. Then start building your retirement with the monthly payment you would of had for the mortgage.
Posted on 3/18/19 at 9:55 am to Gigoleaux
If you're coming into a big chunk of change, why not throw it into savings (2.2 savings, 2.75 12mo/cd)? I would pay a few extra hundred on the principal, and a few hundred into VTSMX. That way you speed up the mortgage pay-down, build some wealth by DCA into a trusted index, plus you maintain some liquidity in the event things go south. As someone else mentioned, you're barely paying any interest on your mortgage. Take your time and build some wealth, safely.
Posted on 3/18/19 at 10:47 am to Hermit Crab
quote:
There are checking accounts that are paying more than 3.5% right now. Origin Bank has one for 4% and a few other do as well.
Why would a bank offer this kind of rate?
4% on up to $40K is the best I've seen. Most of the others with high rates only allow $2-5K at the teaser rate then drops to 0.2-0.5%.
LINK /
Posted on 3/18/19 at 10:48 am to Oenophile Brah
quote:
If you're coming into a big chunk of change, why not throw it into savings (2.2 savings, 2.75 12mo/cd)? I would pay a few extra hundred on the principal, and a few hundred into VTSMX. That way you speed up the mortgage pay-down, build some wealth by DCA into a trusted index, plus you maintain some liquidity in the event things go south. As someone else mentioned, you're barely paying any interest on your mortgage. Take your time and build some wealth, safely.
I think this is the more prudent financial advice, but never under estimate the power of psychology.
Posted on 3/18/19 at 10:54 am to Gigoleaux
Pay it off. You will be able to make even more money with the new freedom you have. There is no better feeling than making an investment or business decision knowing even if you lose you will still have a roof over your head. It will allow you to make much clearer investment decisions.
This post was edited on 3/18/19 at 10:56 am
Posted on 3/18/19 at 10:57 am to Hermit Crab
quote:
There are checking accounts that are paying more than 3.5% right now. Origin Bank has one for 4% and a few other do as well.
They are usually capped. Origin is capped at $40,000.
Page 1 of 2
Back to top
Follow TigerDroppings for LSU Football News