I paid off my mortgage in 2014. Best thing I ever did. I still invest , still save.
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Payoff the Mortgage or Invest?
- Thread starter Vincent Vega
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That sounds like an interesting thought but I can't wrap my mind around that. Can you explain? In my mind it seems that if I invest in the market and the after tax return exceeds the interest cost after tax I would be paying on the mortgage then I'm better off investing.
Seems most lenders want to charge some ‘fee’ to setup the bi-weekly payment on your mortgage. Can you just send them 1/2 of your monthly loan amount every 2 weeks and they have to process it ?
I went to a 15yr mortgage and am 7 yrs into it. Would love to pay the rest off asap as well. Nothing like knowing if life throws a real hard ball at you, you may not have electric and gas...but you have a roof over your head.
I went to a 15yr mortgage and am 7 yrs into it. Would love to pay the rest off asap as well. Nothing like knowing if life throws a real hard ball at you, you may not have electric and gas...but you have a roof over your head.
You can set it up yourself but have a conversation with someone at the mortgage company before doing it. If you don't tell them what you are doing they might just apply the extra payments to future payments instead of extra principal. I've done this with my rental houses tat had mortgages and having paid for properties beats payments. Just make sure you ar maxing out your retirement accounts and have an emergency fund..
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Paying off your home is a form of 'insurance'. What is the return on the vast majority of traditional insurance?
Remember, the capital gains on your home are tax FREE (generally speaking).
But there is no correlation between the investment return on your home and the amount of debt carried against it. That is a function of the selling price of the home over the original purchase price regardless of the loan (or lack there of) carried against it. Unless I'm missing something the only return recognized by paying off the loan early is the interest.
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Yes. And what ever value you place on basically eliminating any threat of foreclosure.
I think my plan needs to be to have a 1/4 of my original mortgage paid off within the first 3 years. I think that's aggressive but doable with a little discipline. I mentioned this earlier but it's pretty amazing what front loading the principal payment does to reduce the interest over the life of the loan.
Investing is likely to generate a better return, the knowledge that you own your home, should things go wrong, is reassuring.
I'm old and relatively broke, (taken a couple of sever financial beatings over the years), so retirement is going to be grizzly any which way. However, paying of the mortgage before I die is on the priority list.
I'm old and relatively broke, (taken a couple of sever financial beatings over the years), so retirement is going to be grizzly any which way. However, paying of the mortgage before I die is on the priority list.
