Question for retirement saving/mortgage payoff

[tvguy]

Maybe. My kids are all out of college, DH is retired, and I read a lot of financial publications/sites. Unless an advisor is going to reimburse me for any losses incurred as a result of his/her advice, no thanks.

They are worth listening to, even if you don't decide to take their advise.

 

[cedricandsophie]

My husband had a good year, he’s an attorney, several years ago and insisted on paying off our mortgage which was in the six figures with a low interest rate . Our financial consultant counseled against it but he really wanted to for peace of mind. Was it a good idea? Hard to say. We lost about 40% of our investments back in 2009 but got it all back and more by 2012. If we had that large amount of money I’m not sure it would make a difference. But I would definitely recommend a financial consultant to do your retirement analysis with and without paying it off so you can make an informed decision

 

[bluehen]

They are worth listening to, even if you don't decide to take their advise.

The smartest thing anyone can do is understand they do not know everything. Like others I do make my own decisions, however every year I go to our adviser and go over everything. The small cost has been well worth it. As much as I think I know I am not an expert in investments. insurance, social security, taxes, and estate planning

 

[MrsPete]

Several thoughts:

- With only 26K left on your mortgage, you're not paying PMI anymore and you're not paying as much interest as you were earlier in the loan ... so you have less to gain that someone "just starting" to pay the loan. Doesn't mean it's not worthwhile.
- People who focus on the numbers alone would tell you that you could invest that money and make more than you'd save by paying off the loan. This, of course, is hypothetical because you cannot know how much you'd earn on that invested money.
- Once you pay off the house, definitely start investing what you were paying -- don't "up your lifestyle" now that you have more free money.
- Absolutely nothing feels as good as knowing your house is 100% paid for -- it's about security. With your house paid off, you can live on so much less.

 

[Eastern]

I would pay off the house.

 

[sk8jdgca]

Will you have a penalty to pay off your mortgage early? If so how big of a lump sum payment can you do now? Are you able to double up your payments each month? If you could do that and IF there are no transaction fees for withdrawing from your investment, you would be using dollar cost averaging to withdraw from your investments.
If you have to pay a penalty to pay off early, keep your money invested.

 

[holden]

Our mortgage was paid off a few years ago. We are now in our late 40s. I hate having debt, but our financial advisor has given us great advice about which debts we should pay off and which we should keep making payments on. I’d say get a financial advisor. They are professionals and know what’s best.

We are basically debt free except one small car payment and our mortgage on our vacation home. I can’t wait until they are both paid off!

 

[Frwinkley]

OP here:

After speaking with the broker that handles our investments, we decided to take $26k and pay off our mortgage.

We will use the monthly mortgage payment to increase our retirement contributions. We'll exceed the 401k limit, but will use the excess to either fund a Roth IRA or make further contributions to our traditional IRA.

 

[bluehen]

OP here:

After speaking with the broker that handles our investments, we decided to take $26k and pay off our mortgage.

We will use the monthly mortgage payment to increase our retirement contributions. We'll exceed the 401k limit, but will use the excess to either fund a Roth IRA or make further contributions to our traditional IRA.

The good part is when you make smart financial decisions along the way, you get into the nice position you are in. And the best part part is in this situation there are no wrong answers.

 

[mjkacmom]

We have a mortgage, DH is a financial planner, and he sees no reason to hurry and pay it off. Our monthly property taxes are higher than our mortgage payment, and they’re never going away.

 

[OhMari]

We have a mortgage, DH is a financial planner, and he sees no reason to hurry and pay it off. Our monthly property taxes are higher than our mortgage payment, and they’re never going away.

Ugg, isn't that the truth. My DHS talked me into a new home we built, because he felt he deserved it after his hard work for so many years. I want to go back to a home that is paid off or nearly paid off. This huge mortgage and high property taxes payments are ridiculous. Sorry OP, I wish I was in your situation.

 

[ceecee]

See if you have a penalty to withdrawal any from the investments and if so make sure it isn't more than 3.2% interest that you have on the 26,000 mortgage. My husband is a financial advisor and paying off the mortgage was a big thing for us and it is a wonderful feeling. If you are a credit union member they do offer advisors with no consulting fees.

 

[tvguy]

We have a mortgage, DH is a financial planner, and he sees no reason to hurry and pay it off. Our monthly property taxes are higher than our mortgage payment, and they’re never going away.

Wow. My property taxes are $2,100 a year. That would be about 2 months house payment when my mortgage was at 12.25%, and about 3.5 months payment when my mortgage was 6.25%.

 

[pklein09]

Wow. My property taxes are $2,100 a year. That would be about 2 months house payment when my mortgage was at 12.25%, and about 3.5 months payment when my mortgage was 6.25%.

NJ here...property taxes $15,000/year on a house appraised at $456K.

 

[2TxAgs]

our property taxes are almost $6k/yr. even without a mortgage, we'll be paying >$500/mth in taxes and insurance

 

[tvguy]

NJ here...property taxes $15,000/year on a house appraised at $456K.

Is there much difference between the appraised value and the market value there? Mine is appraised at $198,557, and the market value per realtor.com and Zillow is about $416,000.

 

[pklein09]

Is there much difference between the appraised value and the market value there? Mine is appraised at $198,557, and the market value per realtor.com and Zillow is about $416,000.

Not much difference right now...maybe $10K +/-, depending on the day. The entire township was reassessed about 6 years ago and the tax rate adjusted. Our taxes actually went down about $1,000, but there were a lot of older houses whose appraisal value went way up and their property taxes went up as well even with the new rate.

 

[tvguy]

Not much difference right now...maybe $10K +/-, depending on the day. The entire township was reassessed about 6 years ago and the tax rate adjusted. Our taxes actually went down about $1,000, but there were a lot of older houses whose appraisal value went way up and their property taxes went up as well even with the new rate.

We had a taxpayer revolt here in California in 1978. Proposition 13 limits to property taxes to 1% of what you paid for your house, with increases of no more than 2% of that amount per year.
But back in 1978 there were actually senior citizens who had been in their houses 40 or 50 years, whose property taxes were more than they paid for the house. The houses had soaring in value, so much so, most could not afford to buy them at their current value.

 

[pklein09]

We had a taxpayer revolt here in California in 1978. Proposition 13 limits to property taxes to 1% of what you paid for your house, with increases of no more than 2% of that amount per year.
But back in 1978 there were actually senior citizens who had been in their houses 40 or 50 years, whose property taxes were more than they paid for the house. The houses had soaring in value, so much so, most could not afford to buy them at their current value.

Oh that would be lovely! We paid $270K. Even when we moved in 19 years ago, the taxes were $8800. But, this is NJ....everyone has a hand out for something, and it hits us in our wallets....

 

[Judique]

Is there much difference between the appraised value and the market value there? Mine is appraised at $198,557, and the market value per realtor.com and Zillow is about $416,000.

That is interesting to me. Here in Maryland, appraised value (for tax purposes) is pretty close to market value on most houses. Condition, of course will make the values vary, but for a house in good condition, you can almost bank on the assessment.

And, even though we have a cap that keeps our taxes lower, I want your tax bill. Mine is close to double. But I am very close in to our Nation's Capital. Ten miles away, you can find 1/2 the tax for a similar home, but I enjoy my proximity.

And New Jersey residents, I feel your pain!