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09-07-2008, 06:01 PM
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#1 |
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Registered User
Join Date: Sep 2008
Posts: 1
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Pay off my morgtage or not
I am 61 and semi-retired. I owe about $50K on my 15 yr. 7% mortgage. Payments are $750 and I've been paying $900. I have about 60 mo. left to pay-off. I have about $725K in annuities and $100K in Credit Union which pays an average of about 3.5%. I will be losing my son as a tax dependent for 2008 tax year. Should I take money out of the CU and pay off the mortgage or continue with monthly payments? Also, my car has 177K miles and It will need replacing soon. Your suggestions will be apprectiated.
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09-07-2008, 10:17 PM
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#2 |
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Harold Hecuba Productions
Join Date: Sep 2004
Location: New Berlin, Illinois
Posts: 934
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Not knowing the entire picture it's hard to say for sure - but if you simply take the two items alone, your mortgage and your CU savings, it makes more fiscal sense to pay off the mortgage with the CU savings (7% versus 3.5%).
The complete picture, including what your income needs are, how your annuities are structured, what your expense picture looks like otherwise, etc., would be necessary to fully answer this question...
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jb IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). |
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09-09-2008, 04:31 PM
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#3 |
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Registered User
Join Date: Jul 2008
Posts: 46
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You should consult a tax advisor about that.
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09-09-2008, 06:12 PM
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#4 |
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Registered User
Join Date: Mar 2007
Location: Ohio
Posts: 324
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I would say pay off based on earning 3.5% and the loan costing you 7%.
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Light is faster than sound. That is why some people appear bright until you hear them speak. |
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09-10-2008, 02:20 PM
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#5 |
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Registered User
Join Date: Aug 2008
Posts: 135
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Math answer is that you should not pay it off because you can make more money on your investments.
Human answer is this would reduce stress a huge amount. Your home would be safe no matter what happens to our economy |
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09-10-2008, 02:38 PM
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#6 | ||
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Harold Hecuba Productions
Join Date: Sep 2004
Location: New Berlin, Illinois
Posts: 934
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Quote:
That is incorrect - you are assuming that the OP is willing to take on more risk in order to achieve a higher return with investments. He has already indicated that he is making 3.5% on his money presently, which is far less than the cost of the loan. Henceforth, unless we change the circumstances, mathematically speaking, it is more efficient to pay off the loan. Quote:
You're assuming that the OP is stressed out about carrying a mortgage - we have no idea (unless you and the OP have conversed outside this thread). And paying off a loan does not make a home safe. Insurance makes a home safe, regardless of equity or economy.
__________________
jb IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). |
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09-28-2008, 07:53 PM
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#7 |
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Registered User
Join Date: Jul 2007
Location: Austin, Texas
Posts: 58
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I would pay it off at this point. I assume full retirement is on the horizon and the mortgage tax deductions are probably not that significant anymore. But every situation is different.
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10-02-2008, 04:22 AM
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#8 |
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Registered User
Join Date: Sep 2008
Posts: 28
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i would just put more into my payment to pay it off.
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11-22-2008, 10:58 PM
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#9 |
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Registered User
Join Date: May 2008
Location: MI. (USA)
Posts: 27
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Pay off the 50K (from CU)to save on interest going to the bank,have a mortgage burning party.Your account from CU will recover faster than making house payments till payed for.If you use annuity it will show as earned income on taxes and put you in a higher tax bracket.
Good luck
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You cant win the Kentucky Derby on a donkey |
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11-23-2008, 09:56 AM
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#10 |
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Registered User
Join Date: Nov 2008
Location: SE PA
Posts: 7
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$900 for 60 more months is 54K. So you would be saving 4K one time if you paid it off now. 50K at 3.5% is 1,750 per year. If you can redirect the 900 per month back to the Credit Union savings you will be ahead by paying it off. But many people are not that disciplined so unless you know you will do that I wouldn't pay it off.
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