Financial advice

[Tight Lines]

would you rather have the money you spend on interest each year, or the much smaller amount that you save in taxes by paying the interest?

If you paid 10,000 in interest, it might save you 3,000 in taxes. If you paid off the loan, seems to me that would save you 7,000.

I also tend to finance cars...because my credit score allows me to get the very best...0.0%, 0.9% or 1.9%. That financing is great...free money...

 

[NE GA Pappy]

I finance cars at 0% too. and I use my Amex card to pay a lot of bills, pay it off every month and save up my points. I just bought an $800 pellet smoker and a bunch of accessories with my points.

 

[Tight Lines]

I finance cars at 0% too. and I use my Amex card to pay a lot of bills, pay it off every month and save up my points. I just bought an $800 pellet smoker and a bunch of accessories with my points.

Same here...I have several cards that I use that really help with travel and vacations...

 

[Dialer]

My home. 2.5 acres with my own creek running through the Chattahoochee-Oconee National Forest. Sure leaning toward paying off!

 

[livinoutdoors]

My home. 2.5 acres with my own creek running through the Chattahoochee-Oconee National Forest. Sure leaning toward paying off!View attachment 1117248

Pay it off. It will be all yours and you will sleep much better at night knowing your home is yours not the banks.

 

[Tight Lines]

Talk to a financial advisor and get one who can get you at least 5-10% on that $500K without much risk...it's easy to go all cash in about 15 minutes if the markets go south...there is really no reason to sit in conservative investments as long as your downside is protected.

 

[The Original Rooster]

Talk to a financial advisor and get one who can get you at least 5-10% on that $500K without much risk...it's easy to go all cash in about 15 minutes if the markets go south...there is really no reason to sit in conservative investments as long as your downside is protected.

That's right, because once the money is spent, it's gone for good. There are plenty of other ways to pay the house off early but still get to keep your nest egg.

 

[livinoutdoors]

That's right, because once the money is spent, it's gone for good. There are plenty of other ways to pay the house off early but still get to keep your nest egg.

The money isnt gone, its in his house. Right now its the banks house. If you pay it off its your house.

 

[The Original Rooster]

The money isnt gone, its in his house. Right now its the banks house. If you pay it off its your house.

The immediate liquidity of that money is gone once it's tied up in the house and your ability to generate additional income from that money is gone as well. I'm not saying to not pay the house off early. I'm saying don't use that lump sum to do it all at one time and lose the financial advantages that large sum of money gives.

 

[Tight Lines]

The money isnt gone, its in his house. Right now its the banks house. If you pay it off its your house.

What will appreciate more, the house or the investments? If I had a $500K nest egg, I could turn that into $750K in 4-5 years, then pay off the house and still have what I started with. If I pay it off, then I'm cutting my investment capital in half, and the house may or may not appreciate as much as the investments. But it really needs to be a plan with a financial advisor and a CPA...there is not enough known about taxes, cash flow, etc. to have the right answer...

 

[livinoutdoors]

I'll put one more in here and then i'll leave it be. The folks giving you numbers based on percent of payback carrying cheap debt vs market returns are not wrong on paper, right now. If you can earn 5% while servicing debt at 2.5% then yes, you are ahead. No doubt aboout it. But until you cash out that investment its just on paper, nothing more. It IS actual wealth for certain, but it also might not be in the future. Right now markets are at historic highs. The higher they go and the longer they stay there the bigger the chance they will lose value at some point. The house will still be there. It could be worth less than it was, but it will still be a place to live. I know from reading your posts on here that you just moved to your dream home and plan to stay. That makes the value of your home less important. You can then take your monthly payments and invest them knowing that if you lose some or all of that money, you still have your home.

 

[Tight Lines]

I'll put one more in here and then i'll leave it be. The folks giving you numbers based on percent of payback carrying cheap debt vs market returns are not wrong on paper, right now. If you can earn 5% while servicing debt at 2.5% then yes, you are ahead. No doubt aboout it. But until you cash out that investment its just on paper, nothing more. It IS actual wealth for certain, but it also might not be in the future. Right now markets are at historic highs. The higher they go and the longer they stay there the bigger the chance they will lose value at some point. The house will still be there. It could be worth less than it was, but it will still be a place to live. I know from reading your posts on here that you just moved to your dream home and plan to stay. That makes the value of your home less important. You can then take your monthly payments and invest them knowing that if you lose some or all of that money, you still have your home.

You are not wrong, and there isn't a right per se. That's why talking to a good financial advisor and CPA is so key. This should not be an emotional decision it should be a financial one. The markets are going to correct, and with that so will housing. But if they just rise another 10% that's $50K then go all cash. It's a process that you have to be willing to stomach I get it...

 

[Buford_Dawg]

Great conversation here, I think each side of the debate has both pros/cons. It is really up to the OP if he wants to have any risk at all with the markets and play the markets or spend the $$$ and pay off the house. He is in a good situation to do both, so it really is if you want peace of mind paying off the mortgage OR very likely investing the money in the market and making potentially enough money to pay the home off PLUS keep his original savings.

 

[huntfish]

Great conversation here, I think each side of the debate has both pros/cons. It is really up to the OP if he wants to have any risk at all with the markets and play the markets or spend the $$$ and pay off the house. He is in a good situation to do both, so it really is if you want peace of mind paying off the mortgage OR very likely investing the money in the market and making potentially enough money to pay the home off PLUS keep his original savings.

Most definitely. And the one truth is that the stock market has always performed over time.