Opinion on paying off Mortgage / financial opinion

[03cobra#2]

Here's my scenario....i came across a inheritance about 2 years ago. Sold my house and bought another.... Then had it completely renovated. House is worth about $250k and I owe $107k. %3.4 Apr adjustable rate. 2 cars paid off, one I owe $28k on with a payment of $439 per month. I have a 5yr old daughter that I have $18k in a 529 and save an additional $200 per month for her. I make about 70-80 K per year, as I just took a lesser position to spend more time with the family. Wife does not work, we have about $550k in retirement saved and about $4k in savings. No other debt. Just the car and house. Right now I put %10 in my 401 K at work and my wife and I both are 43 years old.

Question is do I cash some money out and pay off the house or car or both? So tempted to. I Make plenty of money to pay my bills, and save plenty.... But the thought of no mortgage or car payment sure is nice. Thoughts?



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[derklug]

If you make more on your investments than your mortgage intrest, don't use savings to pay off mortgage. Consult am accountant or tax lawyer to review your best route.

 

[03cobra#2]

My investments are doing well for the most part, even in this slight downturn we have had. I'm not doing anything until I talk to a pro. Just looking for opinions.

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[MG0h3]

Typically no, paying off a house isn’t the best route. I just bought a brand new house two years ago and could pay it off this year when one of my rentals sells. Very tempted but it’s more wise to buy another rental or two.

If you aren’t on that path and have retirement maxed then I’d pay off debt starting with the smallest to largest.


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[riche]

I would suggest selling the car you owe on and pay that extra towards the house. I would also up your 401k %. Once you have everything paid off it will be a great feeling. I'm 40, we paid off our home 3-4 years ago. No debt and just maxing out investments and enjoying life

 

[MFE]

I'd pay that $439/mo car off first, then, $4k in savings? I'd shit my pants if that's all I had in savings, or at least immediately liquid.

 

[MFE]

I'd pay that $439/mo car off first, then, $4k in savings? I'd shit my pants if that's all I had in savings, or at least immediately liquid.

 

[riche]

Shit. Didn't even see just 4K in savings. Sell whatever car your making payments on and put some cash into savings. Maybe looking into Dave Ramsey's plan and read a book or two of his

 

[Brutal Metal]

I'm gonna milk my mortgage for 2 more years, I'm only paying about $1100 a year in interest as it's close to being paid off.

 

[LuuisHernandez]

I’d think about clearing debt (but not the mortgage), rentals, or investing.


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[03cobra#2]

Only problem with selling the car @ $439 is I have to turn around and buy something else. And yes I know $4k in the bank ain't much, bit I do have a couple credit cards wide open with $10k plus limits if I have a emergency. Also if the emergency is that bad I have family members financially able to step in to help with a major crisis if need be. Obviously I need more that $4k... I'm working on it.

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[_Snake_]

Cash some money out from where? That’s the first question.

Hopefully you’re not talking about the retirement fund.

 

[ford fanatic]

Consult a qualified financial advisor....

 

[03cobra#2]

Everybody keeps telling me to sell the car but what do I do for a replacement vehicle? I need to drive something. Plus I just bought the car a few months ago so I'm going to be upside down in it a little bit..... even with the 5K I put down

 

[Klaus]

If you make more on your investments than your mortgage intrest, don't use savings to pay off mortgage. Consult am accountant or tax lawyer to review your best route.

^this. Don't forget the interest on your mortgage is tax deductible so it is an embedded asset. Giving that up would be a mistake.

You need more cash/liquid savings - 6 months to a year of income worth.

 

[1wild-horse]

I would get rid of that adjustable rate mortgage. Refi for a fixed rate around a payment you're comfortable with.

 

[riche]

People make their own choices. Do what you want to. But have a credit card for emergencies and having a cool car don't make since. I would bet every month you are stressed with payments. Get rid of them. You will be much happier and your retirements/investments will grow at a much higher rate. Trust me I know. Three house paid off and a bunch of cars/toys is the garage, investments are growing. No stress, wife able spend more time with our kids and take time off work. And I make under 100k

 

[03cobra#2]

I would get rid of that adjustable rate mortgage. Refi for a fixed rate around a payment you're comfortable with.

I'm comfortable with the payment and even pay an extra $500 per month on it in addition to the minimum payment. I have thought about that tho

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[PaxtonShelby]

You are doing just fine. I would consider building up your savings to equal 6 months of your expenses should something happen with your job or you run into some unforseeable expenses.

Are you thinking about having any more kids? If that is a possibility I would increase the college savings.

The car payment isn’t brutal by any means but if it truly bothers you (doesn’t sound like that is the case ) you could sell it and buy something outright. Doing that you often lose your ass on the car so that depends on your situation. I didn’t catch how many months are left on the car - if not too long then it is a moot point.

I’m 50 and at your age was in a very similar place as you are, except my wife works and we don’t have car payments ( I always find clean used cars and pay cash ). Keep up the good work - you are far far ahead of most of America in your planning.

 

[VenomVeins]

^this. Don't forget the interest on your mortgage is tax deductible so it is an embedded asset. Giving that up would be a mistake.

The problem here (at least in my case, and many others as well) is that the new tax law makes that deduction less.

So in my case, it makes more fiscal sense to pay down the house significantly.

Since i plan on selling soon and cashing out on my investment, i wont be exploring that option.....yet.

Yes, you should also have 6-8 months of liquid money in case something goes sideways (work, health, ect) You just never know the curveballs life will throw your way.

Good luck, and congrats on being far ahead of the curve here. Feels good to have your shit together at a younger age.