Pay off mortgage or borrow off of house

[truckin 79]

I see things on internet all the time about not paying off your mortgage but to borrow and use this to invest for retirement. So I owe about 60K on house and have the means to pay it off out of our savings. So if we stay the way it is and just keep paying mortgage off it will take 5 years to pay off house. If I pay house off and start putting money away that would have gone to mortgage company it would take about 5 years to build that up in our savings account again. My wife wants to keep making payments to mortgage company and I want to just pay it off. Doesn't it make sense just to pay it off?

[LS short box]

If you have the cash not in a 401K account I would pay it off tomorrow. I would never borrow against the house to invest.
I'm kind of a Dave Ramsey guy.

[truckster]

A simple way to answer the question is to compare the money you'll pay in interest on the mortgage versus the money you'll earn in interest on the savings.

[Steeveedee]

Originally Posted by truckster

a simple way to answer the question is to compare the money you'll pay in interest on the mortgage versus the money you'll earn in interest on the savings.

^^^ this ^^^

[Loco83]

Both my wife and I retired at 66, paid off the house 6 yrs early and have no car payments, with her state retirement and SSI and my military retirement and SSI, life is good, paying off the house and our last new car we are very comfortable in our retirement. Pay it off.

[best view]

Not to make fun of the wife but pay the fuc ing thing off holly sh t are you kidding me they should have this in high school instead of this other stupid stuff they’re teaching, unless they’re is no interest the bank is charging you.

[dagnabbitt]

If you are extremely financially secure, then go ahead and pay if off. It does make financial sense, the math is clear. Have a mortgage burning party, they're fun.

Me, though: I like having cash on hand. You never know when you will need it. I like to stay liquid, and the interest on the last five or six years of a mortgage is minimal. Personal preference.

[HO455]

I faced the same decision some 8 or 10 years ago. I paid the house off. Then I put 50% of what was my mortgage payment into my 401k every month since and the rest in to savings. At this point I have a paid for house, my savings is back above where it was when I paid the house off, and the money in the 401k been making more interest towards my retirement. Oh, and my home owners insurance and property taxes are less now the bank isn't taking a skim off the top.

Absolutely one of the best things I've ever done for my future.

And, in your case if you want to borrow against the property in future you still can.

[jerry moss]

my dad asked me the same question last year, he has money in checking and savings and his social security and retirement every month, i looked at the amount he was giving the loan company every month in interest and i told him that's like flushing it down the toilet so he paid it off completely and is still living comfortably with money in the bank.
i agree-pay it off as long as it won't put you in a financial bind by doing it.

[57taskforce]

Originally Posted by best view

Not to make fun of the wife but pay the fuc ing thing off holly sh t are you kidding me they should have this in high school instead of this other stupid stuff they’re teaching, unless they’re is no interest the bank is charging you.

Absolutely this!!! I hate debt of any kind.

[farmall]

The finance radio show I listen to says to keep paying the loan, invest what you have and keep taking the tax credit.
I would rather love to know that it is mine and only the tax man can take it from me.

[Dead Parrot]

If paying off the house will still leave some cash left over to cover something like the AC/Heater dying, then pay off the house. But would really suck to pay off the house, then have to take out a high interest loan to cover some unexpected expense.

One advantage of paying off the house is it removes the temptation to use the savings money for some other purpose.

You could always split the difference and pay off half the remaining balance now and reevaluate in 6 months to a year.

[LockDoc]

-
I had everything paid off before I retired, in 1998. Makes sense to me to be debt free before retiring. I have owned 3 houses in my life and I have paid every one of them off early. It has served me well. I have been retired for 26 years debt free. Life is good.
.

[franken]

The question was "Pay off mortgage or borrow off of house."
Never secure debt with a house that was secured by nothing other than your credit rating (credit card debt for example). The OP then adds info that may indicate they mean something else.
Once the standard deduction is more than itemized deductions, it may make sense to pay off the loan.

[4u2nv]

Here in Canada if you put money into a rrsp (registered retirement savings plan) or any other investment the government gives it to you up the a$$$
I just took $10,000 net out of a investment and it cost me $3000
THAT'S AS MUCH AS IT MADE IN INTEREST OVER THE YEARS
Better off stuffing it in the mattress

[Warrens69GMC]

Add 1500 to 2000 to principal every month, whether income or savings.

That will still allow you to have savings, and pay it off in less than 3 years.

[A1971Blazer]

Being debt-free is a liberating feeling. I made it a priority to pay extra toward the principal on my home loan whenever I could.
After it was paid off, I started putting the regular payment amount and any additional funds into savings strategies for the future, just in case I need them down the road.
I'm currently receiving my Social Security benefits, but I still work part-time in my own business mainly to earn money to support my addiction (not drugs) but rather my passion for 1967-1972 Chevy vehicles.

[70STOVEBOLT]

Originally Posted by A1971Blazer

Being debt-free is a liberating feeling. I made it a priority to pay extra toward the principal on my home loan whenever I could.
After it was paid off, I started putting the regular payment amount and any additional funds into savings strategies for the future, just in case I need them down the road.
I'm currently receiving my Social Security benefits, but I still work part-time in my own business mainly to earn money to support my addiction (not drugs) but rather my passion for 1967-1972 Chevy vehicles.

This. There is no penalty for early payoff (typically), and any extra amount paid over the payment amount goes directly to the principal, which in turn will shorten the loan period, meaning less interest paid over the life of the loan.

[Mid-Pack]

You and your wife could split it down the middle and start paying double payments per month. You get it paid off in 2 1/2 years and your savings account doesn`t take such a hit, in case of emergency.

[raggedjim]

At 5 years left of a 30 year loan the damage is done. The interest portion of the loan has dropped to the point that it probably isn't going to hurt to have the mortgage for the next five years.

The time to pay off a mortgage is at the start. First by taking only 15 year fixed rate mortgages. Then pay extra on the payments as much as you can while still saving for retirement, and emergency savings. I have paid off 2 different houses in 7 years each.

Don't borrow money against your house to invest unless you can afford to lose the house.

Good luck, Rg

[72c20customcamper]

The end of the mortgage period is mostly principle so you’ve already given the lender their profit . What’s your interest rate? Hopefully you refinanced when interest rates were low . You should be able to see what your interest payment is per month if it’s less than your savings interest I would keep the savings . Are your savings liquid?

Being debt free is great I paid my loan off about 10 years early . But I did this by paying more on the principal since the inception of the loan.

[Boog]

Originally Posted by 70STOVEBOLT

This. There is no penalty for early payoff (typically), and any extra amount paid over the payment amount goes directly to the principal, which in turn will shorten the loan period, meaning less interest paid over the life of the loan.

We have applied that habit to every loan we have had and paid all of them off early.
Like minimum payment amounts on credit cards isn't set for your convenience so much as it is intended to extend the payoff time to make the cc company more in interest.

[TATE228]

Spend the money on truck parts.

[truckin 79]

Thanks for all the good info a lot of good stuff there. The only real debt we have is the house everything else is paid off. I will be 55 next year and just want to make my money start working harder for me. My wife is the suspicious type and thinks everyone is out to steal our money, I guess she is right to a degree. I really need to talk to a finance advisor and maybe he can convince her we should invest more or our money sitting in the bank doing nothing but earning 0.08%.

[Warrens69GMC]

Originally Posted by truckin 79

Thanks for all the good info a lot of good stuff there. The only real debt we have is the house everything else is paid off. I will be 55 next year and just want to make my money start working harder for me. My wife is the suspicious type and thinks everyone is out to steal our money, I guess she is right to a degree. I really need to talk to a finance advisor and maybe he can convince her we should invest more or our money sitting in the bank doing nothing but earning 0.08%.

I invested 15k in BITO, and I'm on par to to:get 53% in dividends back this year.