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Old 02-24-2014, 06:36 AM   #1 (permalink)
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Should I pay off my house?

I know... go talk to a financial advisor... but I'm asking anyways. I'm in a position where I can just pay off my house today if I wanted to, I owe $64,xxx on it. My interest rate is 5.875%, which is a bit high, but it's the rate we started at when we bought the house in '03. Thought about refinancing a time or two, but it just seemed like a big pain in the ass, so we never did. My taxes and homeowner's insurance is currently taken out of escrow automatically. Obviously if I pay off the house, I'll only have to worry about paying these things. Mortgage payment is $730±, but I've been paying $830 a month since day one.

I have a pile of money in a Capital One 360 account that earns 0.75%. Yes, that sucks, but it's something. Just seems like I'd be smarter to get out of paying 5.875% than worry about the little bit of interest it's making in the Cap One account. If I pay off the house, I'd just start pumping that mortgage payment back into the Cap One account and see what other safe options (if any) there are to try and make some money back.

Is there a benefit to holding onto and continuing to just paying the mortgage every month? Thoughts?
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Old 02-24-2014, 06:38 AM   #2 (permalink)
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i'd pay it off, today!
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Old 02-24-2014, 06:39 AM   #3 (permalink)
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Pay it off.
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Old 02-24-2014, 06:40 AM   #4 (permalink)
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I would as long as it wont completely wipe out your savings.
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Old 02-24-2014, 06:41 AM   #5 (permalink)
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How is this a question?

If worse comes to worst or whatever, you always have options! You own a completely paid off house.


Oh yea, and go buy something for 16K - the amount you just saved.
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Old 02-24-2014, 06:41 AM   #6 (permalink)
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You should definitely refinance if you don't pay it off. You can also pay off a large chunk without doing it all, and drop the bank loan insurance..
I would pay off any other debts first, if uou have anything like a car payment.
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Old 02-24-2014, 06:41 AM   #7 (permalink)
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Originally Posted by Welby View Post
I know... go talk to a financial advisor... but I'm asking anyways. I'm in a position where I can just pay off my house today if I wanted to, I owe $64,xxx on it. My interest rate is 5.875%, which is a bit high, but it's the rate we started at when we bought the house in '03. Thought about refinancing a time or two, but it just seemed like a big pain in the ass, so we never did. My taxes and homeowner's insurance is currently taken out of escrow automatically. Obviously if I pay off the house, I'll only have to worry about paying these things. Mortgage payment is $730±, but I've been paying $830 a month since day one.

I have a pile of money in a Capital One 360 account that earns 0.75%. Yes, that sucks, but it's something. Just seems like I'd be smarter to get out of paying 5.875% than worry about the little bit of interest it's making in the Cap One account. If I pay off the house, I'd just start pumping that mortgage payment back into the Cap One account and see what other safe options (if any) there are to try and make some money back.

Is there a benefit to holding onto and continuing to just paying the mortgage every month? Thoughts?
I would lean to paying it off, but talk to your advisor. They might have something you could invest it in and make enough to cover the interest on the house and some extra.
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Old 02-24-2014, 06:42 AM   #8 (permalink)
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You should definitely refinance if you don't pay it off. You can also pay off a large chunk without doing it all, and drop the bank loan insurance..
I would pay off any other debts first, if uou have anything like a car payment.
If he's been paying since 2003, I'm sure the loan insurance need is already fulfilled
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Old 02-24-2014, 06:43 AM   #9 (permalink)
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Pay it off.

Any tax advantage is gonna cost you $3 for every $1 you save on taxes, more or less.

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Old 02-24-2014, 06:44 AM   #10 (permalink)
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Unless the money is making more than interest is costing you. It's a good move to pay it off..... or , better yet, move the money to somewhere that makes more money than your interest cost you and make even more.
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Old 02-24-2014, 06:44 AM   #11 (permalink)
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Pay it off. In this economy climate there is no telling if the economy is going to totally collapse or not, if your house is paid off you won't have to worry about where you're going to live. In case you lose employment then it's one less worry.
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Old 02-24-2014, 06:45 AM   #12 (permalink)
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I would lean to paying it off, but talk to your advisor. They might have something you could invest it in and make enough to cover the interest on the house and some extra.
Exactly!
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Old 02-24-2014, 06:48 AM   #13 (permalink)
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I would pay off any other debts first, if uou have anything like a car payment.
This ^

Payoff anything with a higher interest rate first, anything left over put down on the house payment.
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Old 02-24-2014, 06:51 AM   #14 (permalink)
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This ^

Payoff anything with a higher interest rate first, anything left over put down on the house payment.
With what he saves with not having the house payment he can put that towards his car payments, or any other loans he has. Making sure your home is paid off and secure is far more important than a car payment at this point in the economic climate today.
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Old 02-24-2014, 06:52 AM   #15 (permalink)
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Unless the money is making more than interest is costing you. It's a good move to pay it off..... or , better yet, move the money to somewhere that makes more money than your interest cost you and make even more.
i'm sure the money is making more than 5.8% interest right now. but for how long. in my experience, there are very few investment vehicles making over 2% that are a guaranteed return.

paying off the house in guaranteeing at least a 5.8% return on investment, the additional piece of mind that comes with having a paid for house off is invaluable in my opinion.
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Old 02-24-2014, 06:55 AM   #16 (permalink)
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Only concern I have in paying of a house is the potential risk of losing it during a lawsuit w/o a 2nd party interest in the dwelling... I'm sure, though, thee are other options...
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Old 02-24-2014, 06:56 AM   #17 (permalink)
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With what he saves with not having the house payment he can put that towards his car payments, or any other loans he has. Making sure your home is paid off and secure is far more important than a car payment at this point in the economic climate today.
If his employment is that shakey, then yes. If he's got a secure job and income.... You pay off your debt based on interested, highest to lowest. And you make minimum payments on every debt with lower interest than the highest. Even if one of the lower interest ones could be paid off in 3 months, it saves you money to put that money toward high interest sources of debt.

That's if you have lots of debt from multiple sources. It doesn't sound like this is the case for Welby though.
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Old 02-24-2014, 06:57 AM   #18 (permalink)
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Pay that bitch off, not having to pay rent or a mortgage every month is the best decision I ever made for myself. Not the nicest, or biggest house but it's mine and I don't have to come up with xxx.xx amount every month or the bank takes it. Shit, right now I'm profiting $4k/year by subletting.

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Old 02-24-2014, 06:59 AM   #19 (permalink)
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I'd go buy a brand new truck in cash then refi for money for a lift and upgrades and all that shit.
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Old 02-24-2014, 07:03 AM   #20 (permalink)
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The loan insurance is long since paid off. The only other obligation I have other than typical utility bills is, I owe about 5 grand on my Mustang. Really, I could just pay it off at the same time.

I mainly have everything sitting in the Cap One acct. because it's "safe" and at least earning a tiny bit. I've found the stock market to be complete shit and I'm not tolerant of risking the money. I've been frozen in place on trying to do any investments because of the fear of watching it slowly disappear. Again, the money's only earning 0.75%, but it's not losing squat, which is vital to me.
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Old 02-24-2014, 07:04 AM   #21 (permalink)
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How is this a question?

If worse comes to worst or whatever, you always have options! You own a completely paid off house.


Oh yea, and go buy something for 16K - the amount you just saved.
This...
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Old 02-24-2014, 07:04 AM   #22 (permalink)
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I'd go buy a brand new truck in cash then refi for money for a lift and upgrades and all that shit.
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Old 02-24-2014, 07:05 AM   #23 (permalink)
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Not having to worry about a place to live certainly takes a lot of worry out of your daily grind. It will free up your decisions you make about how much shit you take at work.

There is some silly stuff in this thread, but you are sharp enough to see that.

I'll reiterate what others have said, talk to your financial adviser before you make a major money move. Unless he told you to put it in that sorry return account! J/K there are reasons to keep money at easy access.
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Old 02-24-2014, 07:07 AM   #24 (permalink)
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Only concern I have in paying of a house is the potential risk of losing it during a lawsuit w/o a 2nd party interest in the dwelling... I'm sure, though, thee are other options...
Check into homesteading the property. Not sure how bulletproof it is anymore, but its one avenue. An umbrella million dollar liability policy can also be had pretty cheap, and will protect you from most normal liability issues.

Now, if you have a meth lab in the back forty, YMMV.
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Old 02-24-2014, 07:10 AM   #25 (permalink)
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pay it off and put the 830 away in an account. You will have 10g's every year. Play money, etc.
i pay 2500/month (way more than i should) and i look forward to 30 g/year going into a retirement account.
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