Home     Forum     401k     401k Rollovers     Crypto Forum
    Register   Login   Members   Search   FAQs     Recent Posts    



mortgage dilemma

Reply to topic
Money Talk > Personal Finance

Author Thread
maccaphil
First Time Poster


Cash: $ 0.25

Posts: 1
Joined: 13 Dec 2005

mortgage dilemma  Reply with quote  

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.
Post Thu Dec 15, 2005 4:09 am
 View user's profile Send private message
aopp
New Member


Cash: $ 1.25

Posts: 6
Joined: 11 May 2005

 Reply with quote  

Hi. You should ask Dave Ramsey that question. I believe it's deavramsey.com.

Good Luck
Post Thu Dec 15, 2005 11:12 pm
 View user's profile Send private message Send e-mail
ushomeloans
Full Member


Cash: $ 10.55

Posts: 57
Joined: 08 Sep 2005
Location: Sacramento
 Reply with quote  

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,
Post Wed Dec 21, 2005 11:58 pm
 View user's profile Send private message Send e-mail Visit poster's website
Rolo
Yo' Daddy


Cash: $ 309.70

Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
Re: mortgage dilemma  Reply with quote  

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! Very Happy ) Relative to your age and income, you are poor. It's time to turn that around...PRONTO!

"Expect me when you see me."
Post Thu Dec 22, 2005 3:52 pm
 View user's profile Send private message Visit poster's website
rockhound
Preferred Member


Cash: $ 26.45

Posts: 132
Joined: 03 Feb 2006
Location: West Virginia
Re: mortgage dilemma  Reply with quote  

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!
Post Sat Feb 04, 2006 12:07 am
 View user's profile Send private message Yahoo Messenger
El Presidente
Full Member


Cash: $ 13.85

Posts: 69
Joined: 22 Apr 2006
Location: Colorado
Re: mortgage dilemma  Reply with quote  

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.
Post Sat Apr 22, 2006 6:21 am
 View user's profile Send private message
Kiaser
Senior Member


Cash: $ 43.05

Posts: 209
Joined: 12 Apr 2006

Re: mortgage dilemma  Reply with quote  

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.
Post Sat Apr 22, 2006 3:55 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      


Money Talk © 2003-2022

Crypto Prices