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I would never leave 200k "just sitting in the bank". I have $200k parked not-so-easy-to-access things like retirement accounts, taxable brokerage accounts... and my property...
I'm not sure advising someone to keep $200k in the bank is such a great idea. Better to invest, no?
Your point was about flexibility as was my counter not about the greatest return.
The main divide I hear is from the Dave Ramsey "debt-free" types.... who sometimes seem chicken little to me, and people that don't fear "good" debt and value money in investments. I waffle back and forth on how Dave Ramsey-ish I am.
I've also been considering a middle ground of putting about $30K down & re-financing ~60K at a lower rate. My credit score is much better now than it was when I bought it so I think I could get about the best rates available.
I should note also that my plan for the house is to keep it as a rental when we do move up to a better one.
You've got so much cash, just pay off the mortgage. You can put the rest (after setting aside an emergency fund) in 100% stocks, knowing that your mortgage prepayment is as good as a bond allocation. Of course, this requires a stomach that can handle downturns. But it should be easier knowing that in a down economy, the bank can't do anything to your house!!!
"Neither partner knows much about investing and one partner is terrified of it because of bad experience during the 2008-09 crisis & always sees the next crisis around the corner, never right time, etc.."
I am not sure what went wrong in 2008-09. Some people lost jobs and drained their finances for daily living. Others panicked, sold their investments low and missed out on the rapid recovery. Those are past mistakes many never learned from.
Step 1. You and your partner need to be on the same page and need to learn some basics so that you can take care of your finances...preferably with some outside help. Can you find an evening course on personal finance and investments? Both of you need to get up to speed and as I said be in agreement. My wife and I started by attending an evening course at a local high school. At the end of the course we were offered a "free" consult. We took the consult but avoided any further dealings with that individual. Next we went to a TIAA advisor who was paid on salary. Fidelity is also another choice that is likely to work out. I had Prudential call and come to the house selling junk. Anyway you need to listen, learn and make your own decisions.
Step 2. Would be to begin investing so your money works for you and is as safe as feasible. I recommend keeping at least a year's worth of expenses in cash or CDs or very short term bonds. I would not be in any hurry to rush out and make changes. Learn first then move slowly. Time averaging your investments is always a good idea. Decide how much you want to invest (everything over 1 years income for example) then invest about 1/3 of that amount each year. You already know I would have some specific recommendations. Do not tie up money in your house by paying down the mortgage. If you plan to live in the same place a long time you could consider refinancing and if you are determined to pay down the mortgage look at a 15 or 20 year fixed. Rates are very low. You seem are responsible with credit cards. Do not throw them away. Use your cards and pay them off monthly, every month. Build a strong credit rating while enjoying the convenience and fraud protection the cards provide. I also pay everything I can with a card that pays points. I like taking a vacation without paying for air fare.
Step 3. Always remember you are investing for the long term. You need to weather the down times in the market without selling due to panic. You need to find the best allocation consistent with your risk tolerance. I am only comfortable with very diversified investments. I avoid buying individual stocks and bonds and certainly do not invest by buying real estate. All of my investments are in low fee mutual funds. Of course you also want to take advantage of qualified investments where taxes are deferred. Remember the tax bill will be due eventually so you also want non-qualified investments without deferred taxes.
You did not say how far into your 30 year mortgage you are. From it being $89k on a property worth $155k I will guess that you are about 15 years into it.
If you pay $640/month for 15 years, that means you would pay a total of $115,200 over the life of that mortgage. Paying it off for $89k saves you a bunch in the end.
You are paying 4% on your debt. There are few other places right now where you could put money and gain 4%.
You did not say how far into your 30 year mortgage you are. From it being $89k on a property worth $155k I will guess that you are about 15 years into it.
If you pay $640/month for 15 years, that means you would pay a total of $115,200 over the life of that mortgage. Paying it off for $89k saves you a bunch in the end.
You are paying 4% on your debt. There are few other places right now where you could put money and gain 4%.
There were no 4% mortgages in 2001, so OP is not 15 years into a mortgage.
Fine, so you do the math. How many years are left on the mortgage and how much would be paid in total?
You don't have enough information to even make an educated guess at this. You'd need more info
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