Your mortgage is half way through and you have enough in the bank to pay it off..... What do you do and why?
Paying off early could easily save you $200,000$ on interest you will not pay! Look catefully at your mortgage contract, talk to your lending institution, then go fo it!
Thanks, got it done few weeks ago. Done deal, off my mind. It feels weird and good at the same time !! ? Of course I am pretty happy about it
Well it's a done deal.... right or wrong, I have paid off my mortgage today. Thanks everyone for your feedback and comments, all helps. Quck story while at it, the girl at the bank handling everything seemed a bit stressed out, I told her - "You don't do this everyday, do you?" .... She said nervously "Nnnnoooo...!!??" Then I said neither do I, don't worry about it !!.... It was downhill from there. At certain point she was relaxed and confident that when I handed over the check (Not the same bank as the mortgage) she looked up and with a very self assured eye contact told me "Are you cheating on me already???"...... Anyhow, it is a big day for me
Now your somebody! WTG!
You calculate how much interest you will pay over the remainder of the lease and determine if you can make enough income from your nest egg to cover the interest you will pay, you consider the write off you get on your taxes, but most of all you talk to your accountant and they help you through all the numbers
If you have stable income, pay it off, possibly massive interest savings, then save what would have been the payment each month.
Does anybody know what is the impact on the tax return (if any) once the mortgage has been paid off?
Less than having no mortgage payment.
Personally, I'd pay it off. That way it's done and over with. If you were able to save up enough to pay off the house halfway through the mortgage then honestly you'll really be saving if it's paid off. In the meantime, if something were to happen and you needed a large amount of immediately you could borrow against the house. It would be counter productive but it could be done IF necessary.
Doesn't this depend on what the interest rate of the mortgage is and what the interest rate of any of your investments is and how much cash do you need in liquid form for a potential emergency?
Yup, too many variables.... Starting to look like pay off is the way to go
I pay extra but not all of it off because I still need money for food, gas, bills, and emergencies
Do I roll for initiative
It depends. If you are earning more from your investments than you would pay in home loan interest, maintain the home loan. If you are earning less from your investments, pay the loan off.
Exactly.
Continue making payments - the interest is tax deductable & the reserve cash can be invested or used as an emergency fund.
If it's a fixed rate that's lower than current market conditions, I'm not going to pay a single penny extra or early.
This is not completely hypothetical for me. I consolidated my student loans years ago at a very good fixed interest rate. I could have paid them off already if I wanted (and I could pay them off tomorrow if I change my mind), but the rate is so low that I plan on taking every one of the 25 years they offered me. I use auto pay to send exactly the amount due, exactly on the due date each month.
Do I have just enough to pay it off? Was it a 30 year mortgage or a 15?