Poll: Should Engineer pay off his house with savings...

[AgaBoogaBoo]

Originally posted by: Engineer

Originally posted by: spidey07

Originally posted by: Engineer

Originally posted by: spidey07
no way, not a chance...no...no way. no good reason to do such a thing unless you like wasting money.

Not paying 7% interest is wasting money?

you have a job? You pay taxes? You can do better than 7% in the market.

but if it's only 10K, and you still have 6 months of liquid/cash around then do it.

Hell, I don't have 6 months of liquid cash around right now!

(Well, I guess I could tap a Roth IRA or two (the wife) if an emergency came up)

tap the wife, eh?

 

[JS80]

What you should have done was refinance and take maximum cash out when rates were at 4% and invest that money.

Even if you're rate is at 7%, it's not worth saving a few bucks and risking a short term cash squeeze. Just stay liquid.

 

[Engineer]

Originally posted by: JS80
What you should have done was refinance and take maximum cash out when rates were at 4% and invest that money.

Even if you're rate is at 7%, it's not worth saving a few bucks and risking a short term cash squeeze. Just stay liquid.

I, as much as I would like investing, would have no interest in mortgaging my home for investing purposes. There is NO guarantee that I would make more than the interest or even a guarantee that I wouldn't lose money. Not worth the risk, IMO. Safe bet = 7% paid off quickly (too quick to worry about refinancing, payback wasn't quick enough). I could have refinanced earlier, but the closing costs toward the house payment was almost a break even situation and I really hate the paperwork involved in refinances!

(ugh)

Edit: Looks like I'll wait a few months to pay it off. I've estimated a few thousand back in Feb. for tax refunds that will accelerate the payoff to maybe the end of Feb. anyway. I'll monitor the polls and follow up posts as I like to see peoples opinions on the subject.

Thanks in advance. OH, and it will be a great feeling being debt free!

 

[ponyo]

Originally posted by: spidey07

Originally posted by: Engineer
By the way, I'm at the 6.5 year mark of 30 years. Of course, I paid a little extra along the way!

now just imagine how much more you would have had if you invested that.

Investments can fail. Debt that's paid off can never fail. I had plenty of chances to pay off my house and all debts during the bubble of 1998-2000 but didn't due to greed. Well market crashed and my investments with it and now I regret not paying off my house when I had the chance.

Engineer, Congrats! Paying off 30 yr loan in 7 yrs is remarkable. I still have about 6.5 yrs left on my 15 yr. It's time for you to get a second home and another mortgage!

 

[Sphexi]

Well if your employment isn't guaranteed, then blowing your savings isn't a great idea? Just hold out the last few months, most likely the difference would only be a few hundred bucks anyways.

 

[Engineer]

Originally posted by: Sphexi
Well if your employment isn't guaranteed, then blowing your savings isn't a great idea? Just hold out the last few months, most likely the difference would only be a few hundred bucks anyways.

Oh, I'm guaranteed a job as long as I want it (well, as long as the plant is open). I'm not sure that I want it as much as I used to because they drive me into the ground with TOO much work. Paid OT is another consideration that's hard to leave, but 3,400 hours spent in the plant this year (not counting vacation time) is tough to swallow!

 

[jadinolf]

Originally posted by: TallBill

Originally posted by: jadinolf
I paid off my 30 year mortgage in 14 years. I got a lot of flack for doing it but you know what? I'm lovin' it.

Flack from who?

Mostly friends.

 

[Zim Hosein]

Should Engineer pay off his house?

Absolutely, liquidate your savings to the bone - The American way!

 

[alchemize]

I think you should Refi 80% of it into a home equity loan, and blow it on strippers and gambling. Then you will be like the rest of us instead a freak of nature.

JK - With tax writeoff you are roughly breaking even. Let it work it's course and stay liquid.

I personally just finished paying off my second car - now working on the wife's student loans (the 3rd car basically - and a BMW at that). House has about 11 years left in it.

 

[TitanDiddly]

Originally posted by: gooseman
If you're that close to paying it off anyway I'd just make the regular monthly payments and keep the savings.

 

[Perknose]

The trouble with all strict "utilitarian" viewpoints is that they don't factor in how one's emotions color one's quality of life. You obviously want to pay it off, I say go for it.

I did, long ago, it just made me feel better, screw the nit-picky odds. We think we are in control of our lives, of our destinies, bwahahahahahahahahahaha.

Especially since a nuts and bolts case can be made for paying it off, my good friend, do it.

Smiles are worth one hell of a lot, and we're a long time dead. :beer:

Just my zwei pfenning!

 

[EatSpam]

I'm going to be doing the same thing in a few months. I'll be using 50% of my savings to pay off the mortgage on my condo. It will eliminate a monthly payment, plus my 5/1 ARM is going to start going up next year.

 

[CrimsonChaos]

1. Congratulations
2. Why are you asking for financial advice from ATOT?
3. The answer is obvious. Pay it off.

 

[Engineer]

Originally posted by: CrimsonChaos

2. Why are you asking for financial advice from ATOT?

There's some, *gulp*, pretty respectible people here once you wipe the dirt off of them!

 

[LS20]

pay it off; i hate having debt.... dont need to complicate it with calculating all these 2ndary things... my parents paid off their house... knowing you own it 100% and not having to make further payments is a great feeling

 

[Engineer]

Originally posted by: LS20
pay it off; i hate having debt.... dont need to complicate it with calculating all these 2ndary things... my parents paid off their house... knowing you own it 100% and not having to make further payments is a great feeling

Well, you never truely own it. The local "property tax man" always keeps his hands on the door...just waiting for you to miss a tax payment!

 

[jadinolf]

Originally posted by: LS20
pay it off; i hate having debt.... dont need to complicate it with calculating all these 2ndary things... my parents paid off their house... knowing you own it 100% and not having to make further payments is a great feeling

Sure is.

 

[Taggart]

Originally posted by: LS20
dont need to complicate it with calculating all these 2ndary things

If you make more money by not paying off the house, or will be left with no savings then it is ok to complicate

 

[Whoozyerdaddy]

Nah... If you're done in three months anyway I'd say keep the money in the bank (or put it to work somewhere else).

Hint: If you buy into a 4-plex you can rent it out, make some money and still take your interest/prop tax deduction on your tax returns for '06.

 

[PlatinumGold]

Originally posted by: AtlantaBob
Depends on the interest rate on the home loan... if it's low, you could probably make money by putting it away in a money market or CD (if you might need it soon) or investing it in the market (if you don't need it within <10 years, just to be safe).

Of course, also depends on your tax bracket, and how much you can write off with the interest, and how much you value having a "safe" home that's already paid off...

If it's a low interest rate, though, I'd lean towards paying the regular monthly payment... my two cents.

uhh, if he's only a couple of months away from paying it off via monthly payments anyway, he's not paying hardly any interest at this point.

the only reason to do it would be to say you did.

i'd wait.

 

[PlatinumGold]

Originally posted by: Engineer

Originally posted by: spidey07
no way, not a chance...no...no way. no good reason to do such a thing unless you like wasting money.

Not paying 7% interest is wasting money?

are you sure it's 7%. check your amortization schedule. i doubt you are paying much in interest at all at this point.

 

[Engineer]

Originally posted by: PlatinumGold

Originally posted by: Engineer

Originally posted by: spidey07
no way, not a chance...no...no way. no good reason to do such a thing unless you like wasting money.

Not paying 7% interest is wasting money?

are you sure it's 7%. check your amortization schedule. i doubt you are paying much in interest at all at this point.

Interest rate is good for the life of the loan. Do the math and look at the amortization table. Interest each month approximately = current balance * .07 /12. The payment is figured to allow an exact amount of time, but the interest is calculated normally.

 

[PlatinumGold]

Year Month Total Principal Paid Total Interest Paid Outstanding Balance

30 1 $1,694.15 $104.50 $19,205.73
30 2 $1,702.62 $96.03 $17,503.11
30 3 $1,711.13 $87.52 $15,791.98
30 4 $1,719.69 $78.96 $14,072.29
30 5 $1,728.29 $70.36 $12,344.00
30 6 $1,736.93 $61.72 $10,607.07
30 7 $1,745.61 $53.04 $8,861.45
30 8 $1,754.34 $44.31 $7,107.11
30 9 $1,763.11 $35.54 $5,344.00
30 10 $1,771.93 $26.72 $3,572.07
30 11 $1,780.79 $17.86 $1,791.28
30 12 $1,789.69 $8.96 $1.58
Totals for year 30 $20,898.30 $685.50 $1.58

this is what an amortization schedule looks like. for year 30 over 20K paid comes off principal and only $685 is credited to interest.

unless you have an unusual mortgage.


edit

hmmm, mb you are right. so let me get this straight, you are saying that the amount credited to interest in year 30 is 6% (the figure i used for this amortization table) of the amount of principle i owe for that year?

but that would mean $685/20k = 6%/12 right?

 

[Engineer]

I know and my mortgage is not special. My interest is around $62.xx for this month.

10.7k * .07 /12 ~= $62.42 or so. Amortization tables mean little because of the speed and randomness that I've paid on this house!

 

[Accipiter22]

Originally posted by: Coquito
If it'll save you money in the long run, & you say you can stand the pressure, then yes. Does mommy agree with Bobby? Then we're good.

your name means coconut in spanish. I had a gf who had that nickname