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Which is better, living off investment income and paying a mortgage, or living off less investment income and not having a mortgage? 6% interest rate. Thanks for your opinion.
Absolutely. Statistically speaking, you still have at least 10 years to be a citizen of the world. Hopefully, more. If you're doing OK with the status quo, keep it up. 6% ain't bad for mortgage, and you'll still need your nest-egg for unexpected expenses. Hope for the best, prepare for the worst.
I won't pay it off. equity is an asset but it is not easily liquidated. Keep your cash. Invest it in stable investments to offset the errosion of inflation and enjoy your retirement!
I won't pay it off. equity is an asset but it is not easily liquidated. Keep your cash. Invest it in stable investments to offset the errosion of inflation and enjoy your retirement!
That is usually the best advice. But its easy to speak in generalities. Do you have a financial advisor or planner you can go over your specific situation?
A lot of factors can affect which is the best financial option. In the end, there are more than financial concerns... such as how much risk you are willing to take. Equity is a good asset, so are long term CDs and stocks... but if you have an emergency and need to access your cash, liquidity is important.
Thanks so much for the reply. It's hard to accept advice from a financial planner as 'unbiased', considering that they make their living selling financial products! I agree that liquidity is important, but it's difficult to see the value of the portfolio going down, down, down.
Thanks so much for the reply. It's hard to accept advice from a financial planner as 'unbiased', considering that they make their living selling financial products! I agree that liquidity is important, but it's difficult to see the value of the portfolio going down, down, down.
House values can go down, down, down too (just watch the news). The only options that will almost never lose value offer very little return for the low-risk.
There are financial planners that do not sell investments and only offer prepare plans and offer suggestions, or those that work on flat fees and not commission. You will hardly ever get an unbiased answer, but if you get someone that is reputable you might get an honest answer.
I am in the mortgage industry by I often tell people not to buy or refinance. Sure its bad in making a short-term sale, but in the long run its the best business practice. Just find someone honest (I know it sometimes seems impossible) that will go over all your numbers.
If you dont have a problem with the monthly note keep making it. Mortgage interest is tax deductible.
If the house is nearly paid off, the interest deduction isn't enough to be concerned with.
Every situation is different. Plugging in figures and estimating likelihoods is the only way to get close to an answer.
House happens to be in a good market with appreciation at 10% per year, but owner plans to never sell. The house gets paid off. Investment value 0, security 10.
Paying off the mortgage is as much a personal choice as anything. The key, as usual, is diversification. Take a hit in one area, make it up in another. Keep the investments balanced. If the house is only 10% of net worth, pay it off. If it is 80% of net worth (equity) heck no, get a larger mortgage instead and spread the risk.
Not quite that simple, but you catch the drift.
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