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I wouldn't pay off the mortgage now because your free cash balance of $33,000 is (guessing) 6-12 months of expenses. They say have 3 months, but these days I make it higher given how long it takes to find a job. Plus, the absolute value of the free cash balance I would not want to fall below say $20,000 because you never know what expenses can come up like medical.
If you paid off your house and then something catastrophic happened to either of you, where would all your cash be? In your house and very difficult to recoup. Don't do it.
If you paid off your house and then something catastrophic happened to either of you, where would all your cash be? In your house and very difficult to recoup. Don't do it.
There are always home equity loans. With 100% equity, it should be easy to get one. And what do you mean by 'catastrophic' - do you mean the death of a spouse? A good life insurance policy will solve that problem (well, just the financial end). If you mean a serious illness, that's where good medical coverage comes in. Our house is completely paid off, we have hefty life insurance policies, and good medical coverage. Life without a monthly mortgage payment feels wonderful!
There are always home equity loans. With 100% equity, it should be easy to get one. And what do you mean by 'catastrophic' - do you mean the death of a spouse? A good life insurance policy will solve that problem (well, just the financial end). If you mean a serious illness, that's where good medical coverage comes in. Our house is completely paid off, we have hefty life insurance policies, and good medical coverage. Life without a monthly mortgage payment feels wonderful!
It doesn't have to be something like the death of a spouse -- a major illness and loss of job could do it, too. It can take time to get your full disability payments, and in the meantime there are bills to be paid, potentially quite big ones even if one has has decent insurance. They're suggesting dipping into their 30k emergency fund to pay off the mortgage. That doesn't seem wise. What's the rush? By not touching that money they'll still pay off their house soon, but won't need to touch their savings. I'm sure paying off the mortgage feels great (and they're still on track to do that very, very soon), but so does having enough emergency savings in the bank so that if you have a medical emergency or other event and being able to pay cash for it without worrying about it. But -- and I write this from experience! -- many medical policies still won't cover everything. Hotel stays for family members while the patient seeks treatment in a distant medical center, for example. Travel. Stuff like that can add up fast. It's not likely, and odds are they'll be fine, but what's one more year of mortgage payments at this point if it means leaving that emergency fund alone?
It doesn't have to be something like the death of a spouse -- a major illness and loss of job could do it, too. It can take time to get your full disability payments, and in the meantime there are bills to be paid, potentially quite big ones even if one has has decent insurance. They're suggesting dipping into their 30k emergency fund to pay off the mortgage. That doesn't seem wise. What's the rush? By not touching that money they'll still pay off their house soon, but won't need to touch their savings. I'm sure paying off the mortgage feels great (and they're still on track to do that very, very soon), but so does having enough emergency savings in the bank so that if you have a medical emergency or other event and being able to pay cash for it without worrying about it. But -- and I write this from experience! -- many medical policies still won't cover everything. Hotel stays for family members while the patient seeks treatment in a distant medical center, for example. Travel. Stuff like that can add up fast. It's not likely, and odds are they'll be fine, but what's one more year of mortgage payments at this point if it means leaving that emergency fund alone?
Yes, if they don't have disability insurance and not so great medical coverage, then they should probably just ride out their loan.
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