maccaphil
First Time Poster
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Joined: 13 Dec 2005
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mortgage dilemma |
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need advice . . . am 57, wife 53. earn approx $70G a year together, living in NJ); hve 2 kids both at home. have $84,000 left in mortgage. house worth $400,000+ (cannot move), mortgage payment is $1230 per month including property taxes. have $90,000 in mutual funds, going nowhere. totalling all bills, have more going out than coming in. question...should we pay off mortgage leaving us with $600 per month payment in taxes? would be breaking even monthly at that point, leaving $6000 in savings and no stocks or mutual funds. better off if another 9/11 happens, giving us peace of mind? pay off mortgage or not? (also own free and clear, trailer worth $50,000-expenses on that about $3000 yearly). thanks.
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Thu Dec 15, 2005 4:09 am |
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aopp
New Member
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Joined: 11 May 2005
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Hi. You should ask Dave Ramsey that question. I believe it's deavramsey.com.
Good Luck
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Thu Dec 15, 2005 11:12 pm |
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ushomeloans
Full Member
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Location: Sacramento |
Most of the time, it doesnt really make sense to pay off the mortgage becuse the money is borrowed at suck a low rate, after tax deduction.
http://www.finance.cch.com/sohoApplets/MortgageTaxes.asp
Heres a calulator.
You are probably borrowing at 5% and many of your investments (CDs) will bring higher. Good luck,
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Wed Dec 21, 2005 11:58 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
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Location: Colorado/Florida |
Re: mortgage dilemma |
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Coaster nailed it.
Don't ditch the mortgage; that is cheap money.
If you have negative cash flow ("more going out than coming in"), then, obviously, you are spending too much.
quote: Originally posted by maccaphil $600 per month payment in taxes
HOLY CRAP! I hope your area is worth it.
quote: Originally posted by maccaphil $6000 in savings and no stocks or mutual funds. ... giving us peace of mind?
$6K away from poverty...not good.
quote: Originally posted by maccaphil have $90,000 in mutual funds, going nowhere.
A separate issue: find out why your investments are going nowhere. Are you paying fees/loads? Go elsewhere. Are your funds lagging behind the market? Ditch'em and pick quality funds. Stock market AVERAGE is 10.4%-12%. My average is 22%. Do your due diligence.
quote: Originally posted by maccaphil (also own free and clear, trailer worth $50,000-expenses on that about $3000 yearly)
There's one expense...unless you want to retire in that trailer, you need to ditch some luxuries/streamline your cash flow and live BELOW your means to have positive cash flow enough to retire how you want when you want.
You are what is called a 'hyper-consumer'...spend, spend, spend. Here is a rude awakening for you to motivate you to get down to business: You have 22 years on me but I have more retirement savings. I am a Gen-Xer telling you to delay gratification and plan for tomorrow (that's backwards! ) Relative to your age and income, you are poor. It's time to turn that around...PRONTO!
"Expect me when you see me."
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Thu Dec 22, 2005 3:52 pm |
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rockhound
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Location: West Virginia |
Re: mortgage dilemma |
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Let me preface my comment by stating that my only qualification for responding is that I am extremely fiscally conservative (read "cheapskate"), although this has served me well in practical terms. My guiding maxim is "The best way to save money is to not spend it." It isn't fancy, but it works.
We don't know why you have such an expensive house, but recognize that housing can be extremely expensive in the Eastern Megalopolis. At your age, it's nice to know that you have the security of $90,000 in mutual funds, and it would be tough to lose that. I would suggest that you address your negative cash flow. What are you spending money on every month? Poor Richard's Almanac--many small leaks will sink a great ship. Cancel cable, stop dinners out, cut down on utilities, cancel magazines, club memberships, cell phones. Now the tough one--at age 57, why do you have two kids living at home? Are they pulling their weight on expenses, or do they represent a big drain? It's great to help out the kids, but when you're worried about losing your house, something has to change. Maybe they need to start paying some expenses for rent/food/utilities. I would also suggest selling the trailer (not sure exactly what this is). That will not only save the $3,000/year upkeep that you mention, but if you could get the $50,000 value for it, you could use that to knock down your mortgage. Good luck!
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Sat Feb 04, 2006 12:07 am |
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El Presidente
Full Member
Cash: $ 13.85
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Joined: 22 Apr 2006
Location: Colorado |
Re: mortgage dilemma |
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quote: Originally posted by maccaphil house worth $400,000+ (cannot move).
Also factor a house that "cannot move" makes it very difficult to realize your equity in the home if you need really need money quick. Selling house = no where to live, which is an added stress you do not need if you are having some sort of short-term financial emergency. The investments would be easier to liquidate, although a bigger emergency fund like coaster recommends could prevent you from having to liquidate your investments at a bad time. Taking all or some of rockhound's advice should help you make that bigger emergency fund a reality.
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Sat Apr 22, 2006 6:21 am |
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Kiaser
Senior Member
Cash: $ 43.05
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Joined: 12 Apr 2006
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Re: mortgage dilemma |
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quote: Originally posted by maccaphil need advice . . . am 57, wife 53. earn approx $70G a year together, living in NJ); hve 2 kids both at home. have $84,000 left in mortgage. house worth $400,000+ (cannot move), mortgage payment is $1230 per month including property taxes. have $90,000 in mutual funds, going nowhere. totalling all bills, have more going out than coming in. question...should we pay off mortgage leaving us with $600 per month payment in taxes? would be breaking even monthly at that point, leaving $6000 in savings and no stocks or mutual funds. better off if another 9/11 happens, giving us peace of mind? pay off mortgage or not? (also own free and clear, trailer worth $50,000-expenses on that about $3000 yearly). thanks.
First things first, if your 2 kids are above the working age they need to be paying rent. Sure, give them a break on the rent (don't charge market prices in your area, charge under) but don't give it to them for pocket change either.
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Sat Apr 22, 2006 3:55 pm |
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