You have a 350k mortgage......you acquire 350k cash from somewhere.....WHAT DO YOU DO? (California, heloc)

[Norsky1]

I would quit paying my mortgage, live there for free, let it go into forclosure and buy it back with cash for 48 cents on the dollar for what i bought it for last time.

duh.

[TouchOfWhimsy]

I'd pay off the mortgage immediately. The money that was then spent on the mortgage would then be invested.

[sterlinggirl]

E. I'd ask myself if I'd rather live in a $350K house with zero dollars in the bank or live in a $175K house with another $175K in the bank.

[MotleyCrew]

We had always wanted to be mortgage free and when we finally arrived at that point we slept much better. I would not pay down a mortgage and still have $100,000 debt on a home. Life goes upside down as we are learning ever day in the news and people have lost homes over as little as $10,000 in mortgage debt when things hit the fan. House rich is a good thing.

[Mathguy]

Originally Posted by Iwillthink4u

Do you:

A: pay off the mortgage completely?
B: Invest the money?
C: pay 'some' of the mortgage off and invest the rest?
D: take the money to Vegas, gamble in the hopes of doubling it (please don't choose this option lol)


Note: i'm aware that like almost all other situations, the real answer is "it depends".

I actually had this happen to me (not quite that big of amount though).

Seeing as how my mortgage rate is around 5.5%, by paying it down it's like getting a guaranteed 5.5% return risk free. So, I paid some of it down while staying liquid with enough in case I were to be laid off etc.

I have a fair amount of money in my 401k with stock market exposure so I view paying down the mortgage as somewhat balancing to my overall planning.

I have a 5th and 6th grader and I will have the house paid off before they hit college which will be nice.

[Ceece]

I would probably invest it and just accelerate my principal paydown. I would rather stay liquid and not pay off my house, which may continue to drop in value, knowing I would BE ABLE to either pay it off or pack up and leave on a moments notice. I like having options.

[revelated]

Personal opinion. Mind you, it's based on California and other states where houses are overpriced, not places like Detroit where you could put a house price on a credit card.

Anyone whose answer did not include some variation of "pay off/down/towards the mortgage" isn't using sound fiscal thinking. Consider this hypothetical, and you can chalk this up as a single individual and/or a single income household:

Monthly take home: $4,000
Monthly mortgage payment: $1,800

Right there you have effectively, when including property tax, slashed your disposable income in half. Now let's keep going.

Credit card payments: $700 (assume minimum required payments)
Non-revolving expenses, i.e. utilities: $500
Insurance of whatever kind: $500

That leaves you with $500 a month to keep yourself/your family fed, clothed, and entertained. Doable? Sure. Easy? No. Divide that amount by 28 and you can see that it really isn't that much money at all. Even if you threw tons of money at your debts and bills, you'd still be saddled with a $1,800 mortgage payment. Now what if you got disabled, or worse, laid off? Now, you have no income with which to do anything about that mortgage payment. This is what has gotten so many people foreclosed; not thinking farther ahead. Trust me folks - having a few credit cards in collections is a LOT better than having tax liens or foreclosures on your credit report.

Now, assume you took that lump sum of cash, and paid off all but $10,000 of the mortgage, then threw the rest at whatever debts you had. Chances are (unless you're less fiscally responsible than I'm guessing you are) you will be able to eat out a significant chunk of what you owe with the left over, plus you'd still have your salary to supplement it. You then, in theory, could take out a small personal loan for the remainder, pay off the house completely, and then pay down the loan in your own good time without having to worry about losing the roof over your head should something catastrophic happen.

[20yrsinBranson]

Originally Posted by Iwillthink4u

Do you:

A: pay off the mortgage completely?
B: Invest the money?
C: pay 'some' of the mortgage off and invest the rest?
D: take the money to Vegas, gamble in the hopes of doubling it (please don't choose this option lol)


Note: i'm aware that like almost all other situations, the real answer is "it depends".

I pay off mortagage and put my monthly mortgage payment in the bank. This is assuming I have no other consumer debt.

20yrsinBranson

[Sgoldie]

You're not going to get much of a return in the market right now and certainly not a decent guaranteed one. Best to have a paid off home.

I'd reverse things from my normal advice of paying off the highest interest (credit cards) before the house as having no mortgage payment at all would allow for a quick resolution of the cards. Refinancing costs money in itself.

[Niftybergin]

1) Pay off any outstanding (non-mortgage) debt I still have, including a HELOC if I have one of those.
2) Put the equivalent of 12 months' expenses aside for savings if I do not already have this.
3) Put any remaining money toward my mortgage.