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Just think how fast you could save up for a vacation if you didn't have a mortgage payment and interest. Pay off the mortgage, save and pay for the vacation in cash. You will likely be more frugal on your vacation if its coming out of money you saved vs free money.
I have no other debts live comfortably/simple on my salary. Drive 15 year old cars.
I'm with the wife.
If you don't use this windfall lump of CASH to indulge yourselves now I suspect you never will.
Take a nice trip with at least half of the $20K... put the rest into a rainy day CD.
If $20K is enough to settle the mortgage balance then it's all principle.
Little benefit to zeroing it out now vs playing that out for a few more years.
I dont' know how much this windfall is, but we've had a paid off house. Yes, it felt great. However, our new house has a mortgage. Why? Because it was cheap money. Because that interest allows us to itemize on our taxes. And primarily, because our investments are doing better than the mortgage rate is costing us.
Despite the request for enough information to make good analysis the OP has chosen to be vague.
That's his right of course but it rather thoroughly negates any benefit to asking for insight or sugestion.
We will have close to 100K in inheritance money, mortgage left on the house is $120k. I can come up with 20K from savings and pay it off.
We are in early 40s with kids in school. With money saved from mortgages, I could start saving for College or retirement. I make close to 80k, would be able to save for vacation in few years.
We will have close to 100K in inheritance money, mortgage left on the house is $120k. I can come up with 20K from savings and pay it off.
We are in early 40s with kids in school. With money saved from mortgages, I could start saving for College or retirement. I make close to 80k, would be able to save for vacation in few years.
I might not be popular here but payoff the house! I had a guy years ago tell me his #1 priority was to pay off his house (he cleared 25K a month at the time!).....When I asked why he said he wants to "own his own dirt!" It didn't make sense to me then but it sure does now!
Tell your wife not having that mortgage bill in the mailbox will be a vacation every month! I strongly suspect the extra 100K will get pi$$ed away after the 20K vacation is over.....well we have 80K left honey and since we can't payoff the house then lets get new cars, now the kitchen needs to be redone, might as well get some new furniture etc.
The interest deduction is a joke on 120K and after you factor in the tens of thousands in interest you will pay in the future you really will kick yourself for not paying it off while you had the chance.
We will have close to 100K in inheritance money, mortgage left on the house is $120k. I can come up with 20K from savings and pay it off.
We are in early 40s with kids in school. With money saved from mortgages, I could start saving for College or retirement. I make close to 80k, would be able to save for vacation in few years.
Why pay it off? Compromise. Payoff $75k on the mortgage which will leave a mere fraction of it left, meaning most of the new payments will be taking off a lot of principle. Its a $45k luxury car loan at that point. Take another $10k for savings. Then spend a bit less like $15k on a few vacations which should be plenty.
You can never get time back and you are not taking any with you. And unless you have a high rate $45k and falling is going to cost squat in interest, a couple of bills for a year or two and then chump change to fully paid off.
Talk to a Certified Financial Planner I'm sure they are going to give a better plan. They'll explain the low cost of money , the return on investments and insurance, yada yada. Would you represent yourself in a law suit, would you operate on yourself. It is good that you are getting ideas from others here but run it by a professional. If I were you and didn't want to see a CFP, I'd get a HELCO to pay off the mortgage then pay off the heloc. you said you don't have credit card debt, is it because you pay them off or never use them. The heloc is a credit card secured by your house. As long as your home has some value, you'll be able to use it incase of an emergency. Do you have adequate insurance? Now you need to protect the equity of your home. You have no credit card debt so you seem disciplined enough to do this or is it , you have not credit cards?
Answer to your question - an unpopular one- go on vacation- you work to live not live to work. if you aren't going to enjoy you money why are you earning it, just to give it to the bank, saving for when you are old and can't move , and then you have to pay to have someone wheel you around on your vacation?
When you get back, buy another nice house which you can pay off all of the expense with the rent and try to pay it off before the kids go to college.
Get a nice house which you'll be able to depreciate a lot, maybe one near where you kid might end up for college. Talk to an accountant if you don't understand depreciation.
Last edited by thelopez2; 09-25-2013 at 07:29 PM..
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