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re: Payoff house or keep money invested?
Posted on 2/19/24 at 1:47 pm to DarthRebel
Posted on 2/19/24 at 1:47 pm to DarthRebel
Agreed
I'd probably keep the mortgage and potentially refinance the mortgage if the situation avails itself.
That way you maximize your amount returned from the S&P Fund.
I would have answered otherwise 20 years ago to be free and clear of the mortgage but I have since become more comfortable with the concept that money is merely a tool, rather than an end, in and of itself.
I'd probably keep the mortgage and potentially refinance the mortgage if the situation avails itself.
That way you maximize your amount returned from the S&P Fund.
I would have answered otherwise 20 years ago to be free and clear of the mortgage but I have since become more comfortable with the concept that money is merely a tool, rather than an end, in and of itself.
1
Posted on 2/19/24 at 1:53 pm to soccerfüt
quote:
I'd probably keep the mortgage and potentially refinance the mortgage if the situation avails itself.
Would he actually get a lower rate on the refinance though? He may as well just pay X amount extra towards principal until 15 years hits or 10 years hits if that's the route to take.
Posted on 2/19/24 at 3:12 pm to MrJimBeam
quote:
Would he actually get a lower rate on the refinance though?
Who knows, doubt it now.
Posted on 2/19/24 at 3:43 pm to DarthRebel
Refinance costs would have to be looked at for a break even if I refinanced but right now I don’t think rates are lower than 5.5% to refi. Also I have no idea how long we will be in this house could be 5 years could be forever
Posted on 2/19/24 at 4:03 pm to Redstickbaw
You payoff the house "and then what?"
Humans aren't static creatures.
Are you dumping all of that money into the market each month?
Or you looking at another home (lakefront/riverfront/beachfront/mountainview)? Would you need a kiddie condo in the future? Is there a business opportunity?
I'm a fan of paying back debt. But if there is a chance that you could use the money to avoid financing anything at higher rates, then you are best to hold tight on such a big decision.
Your downside risk would be to make the move too soon (payoff but have a need for capital) rather than too late.
Humans aren't static creatures.
Are you dumping all of that money into the market each month?
Or you looking at another home (lakefront/riverfront/beachfront/mountainview)? Would you need a kiddie condo in the future? Is there a business opportunity?
I'm a fan of paying back debt. But if there is a chance that you could use the money to avoid financing anything at higher rates, then you are best to hold tight on such a big decision.
Your downside risk would be to make the move too soon (payoff but have a need for capital) rather than too late.
Posted on 2/19/24 at 4:50 pm to meansonny
If I paid it off tomorrow the extra money would just restart back in the brokerage account in index funds
Posted on 2/19/24 at 7:24 pm to Redstickbaw
Peace and security of no mortgage vs market fluctuations
Posted on 2/19/24 at 7:34 pm to kywildcatfanone
I’m more secure with liquidity and math.
I’ve never once been concerned with my mortgage since owning a home. I rarely even check how much is still owed. It’s practically irrelevant. I’ll pay on it until it’s done at 30 years and won’t think twice.
I’ve never once been concerned with my mortgage since owning a home. I rarely even check how much is still owed. It’s practically irrelevant. I’ll pay on it until it’s done at 30 years and won’t think twice.
Posted on 2/19/24 at 8:14 pm to Redstickbaw
quote:
If I paid it off tomorrow the extra money would just restart back in the brokerage account in index funds
No kids?
No spouse?
No retirement goals?
Posted on 2/19/24 at 8:16 pm to meansonny
Yes a wife and a few kids. Retirement goal is at 55 and I’m well on track for that. I don’t have to put another dollar to my retirement account and it should grow to what I need by 55.
This post was edited on 2/19/24 at 8:20 pm
Posted on 2/19/24 at 8:17 pm to lynxcat
quote:
Keep money invested. Don’t overthink this.
100% but I don’t think much of having debt. I’d rather put the money to work.
Posted on 2/19/24 at 9:31 pm to Redstickbaw
quote:
Yes a wife and a few kids. Retirement goal is at 55 and I’m well on track for that. I don’t have to put another dollar to my retirement account and it should grow to what I need by 55.
If the dream is to retire at 55, I would keep the money in the market working for you.
If buying a kiddie condo makes sense (college is cheap. A 19 year old covering room and board isnt), I would keep the money in the market (you can pay cash for the condo in the future).
If you truly have a static life (no big plans for the future), go ahead and pay off the mortgage. I was asking about the family because it may be their "calling" which creates the dynamic big purchase ideas which could benefit from a large capital infusion in the future.
Posted on 2/19/24 at 11:37 pm to Redstickbaw
quote:
I owe roughly 150k on my 30 year 5.5% mortgage with 25 years remaining.
No. It's a small balance in the grand scheme.It's likely not a long term house as well.
It's your primary house. You will likely ever owe ZERO tax on it if you're married depending on future sales price.
This post was edited on 2/19/24 at 11:39 pm
Posted on 2/20/24 at 10:44 am to Redstickbaw
Cash flow is fine we usually have an extra 500-1k per month to invest in taxable brokerage after 401k, ira, and hsa contributions (the p&i portion of our note is $900/month). We have the discipline to invest extra if we had no mortgage as we are doing it now. Yes I have wife and kids
______________
Cudos to you on the discipline to spend less than you make! Knowing this about you makes me think you will be fine regardless the direction you go on this decision.
I would say this is the biggest problem that I see with the majority of friends and family. Most spend too much money and have little to invest. I don't remember who taught me this, but I used the "pay yourself first" strategy for years. I saved/invested some money before non-critical expenditures. The majority decide to buy things every month and see if they have money left to invest. Doesn't work too well. Of course, many low income folks don't have this luxury but those folks are probably not reading this.
Anyways, be proud of yourself in this regard!
______________
Cudos to you on the discipline to spend less than you make! Knowing this about you makes me think you will be fine regardless the direction you go on this decision.
I would say this is the biggest problem that I see with the majority of friends and family. Most spend too much money and have little to invest. I don't remember who taught me this, but I used the "pay yourself first" strategy for years. I saved/invested some money before non-critical expenditures. The majority decide to buy things every month and see if they have money left to invest. Doesn't work too well. Of course, many low income folks don't have this luxury but those folks are probably not reading this.
Anyways, be proud of yourself in this regard!
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