Anyone do it? Like - cash some stuff in, pay the penalties or whatever and write the check out.

I was wondering - given the raise of the standard deduction - if that doesn't make the pain of the mortgage interest a little less tolerable.

Plus stock market at all time high has made the capital pool quite deeper.

I may have an opportunity to do this and wonder if any of the members here did it and what your thoughts were.

Also - from a peace-of-mind standpoint - it would be nice to be mortgage-free forever.

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We paid ours off a year ago the old fashioned way. We buckled down and stopped spending money unnecessarily until we paid it off.

We were 45 at the time and there is no better feeling than to be debt free.

In my opinion it would not be a good idea to cash in your retirement to pay it off. You need that money in there compounding for your future.

If you are the end or three quarters of the way in, the interest left isn't worth it.

I was going to pay mine off when I had three years left and when I added up the interest deduction, it was almost nothing. I'm all principal now.

Personally, I would let it ride. If you want to pay extra payments to cut down principle, that is a great idea but I wouldn't pay penalties to pay it off.

I paid mine off 10 years ago. We didn’t have any pre-payment penalties and damn it felt good! Have since got a home equity loan but it just sits in case it’s needed. Mine and the wife’s credit score is very good so I don’t worry about it.
If you don’t have any penalties I’d pay it off!

What's your age, and how do you want to live the rest of your life?

Seven years ago we made the decision to pay off our 15 year mortgage 5 years into it. There were a couple of young, smart guys at work who tried to show me the math and talk me out of it, and someone will probably show up here and do the same for you. If you want to micro-manage the taxes and sharp-shoot the numbers with tax savings of a mortgage vs. the investment potential of equivalent sums over time - all fine and dandy. But that wasn't how I wanted to spend my life. There's a HUGE benefit that is difficult to quantify in dollars knowing the house is yours as long as you pay the taxes. That's an increase in quality of life as far as I'm concerned, and at age 55 that's what I've been concentrating on for the last decade.

So what did we do with the monthly savings? We've been putting the equivalent mortgage payment amount into some investments. I haven't (and won't) take the time to do the math, but after seven years and the recent stock market performance I'm convinced it was the right decision at our age and financial circumstance. We haven't owed anything to anybody for seven years, and we enjoy moving forward in life unencumbered by debt and not looking back.

Ours will be paid off this year, like others have said, if there are no penalties, you might as well get it done.

We look at doing this once in a while, but I have two problems with it.

1. The money we use to pay it off would all be taxable the same year and would be taxed at a higher rate. (We would look wealthy for that year.)

2. Much of our "mortgage" payment actually goes into an escrow account to pay our property taxes each year. So our house payment won't all go away when we pay off the house.

Looking at it that way, it isn't worth it to us. Although taking advantage of the high-flying markets right now might be good.

Haven't had a mortgage for 15 years. We couldn't see paying the bank a dollar to get 25 cents back on our taxes. We paid as much as we could towards the principle each month and paid off a 15 year loan in seven. It was a struggle, but well worth it.

quote:

Pay off the mortgage ? Yes or No

Anyone do it? Like - cash some stuff in, pay the penalties or whatever and write the check out.

I'm a simply man.
If you have to pay any penalties, then no.
If you can afford to, without any penalties, then yes.

It all depends on your situation and many viewpoints are presented.

If there is any potential that you are going to move, don't.

If you haven't paid off unsecured debt, don't until you pay that off.

If you aren't investing for retirement in at least an IRA or some 401K, don't until you are able to.

Don't cash anything in that involves penalties and/or taxes.
Pay as much extra as possible each month until it's paid off.
Doesn't matter if you are going to move, your payoff will be lower. Yes, pay off any higher rate debts first and then use the extra cash each month to pay on the mortgage.
The piece of mind you get owning it free and clear, priceless.

Hell yes, paid our 30 yr mortgage off in 12 years.
It's the ONLY way to go but start with ALL your other higher interest rate debt FIRST.

I'll be 40 this year and have no mortgage - pay it off as quickly as you can. I make decent scratch but not rich - knowing as long as I pay my property taxes no one can take my house feels pretty good - never know when you could lose a job. Where I live average mortgage payments are around $1700/month - that's a lot of play money once the mortgage is gone and i'm still young enough to enjoy it

quote:

Anyone do it? Like - cash some stuff in, pay the penalties or whatever and write the check out.

Why?
Why pay penalties? How much are they?
What's the interest rate?
How much time is left?
What's your alternative use for the money?
Are you saving adequately for retirement?

I understand living debt free... it's a good feeling. But, have you paid off all other debt first?

The benefit of writing off the interest requires paying the interest. Paying no interest at all beats the heck out of having the government help with your interest. Simply being able to say to yourself, “I don’t owe anybody anything.” is an incredibly nice feeling. Also, the lower your monthly nut, the more options you have.

(I'm no financial expert, so my response might be imprecise.)

I asked the CFO where I work about paying off a couple of years ago. His advice was that if interest on the house was low, it made more sense to invest the money, as the investment would probably make more than what I'd save by paying off the house.

For example, interest on my house is just over 3%, whereas right now I can make 10-15% on investments.

quote:

Originally posted by rusbro:
(I'm no financial expert, so my response might be imprecise.)

I asked the CFO where I work about paying off a couple of years ago. His advice was that if interest on the house was low, it made more sense to invest the money, as the investment would probably make more than what I'd save by paying off the house.

For example, interest on my house is just over 3%, whereas right now I can make 10-15% on investments.

Don’t forget about risk.

Paying 3% for money to invest at 10-15% is a real good idea, as long as there is no risk of losing the money.

Risk happens!

quote:

Originally posted by JALLEN:
Don’t forget about risk.

Paying 3% for money to invest at 10-15% is a real good idea, as long as there is no risk of losing the money.

Or at least the risk is acceptably low.

That was our thinking when we bought my Jeep. Were going to take out a temporary car loan, then pull the money out of the retirement account and pay it off this year. Then thought "Hmmm... Retirement account has been pulling down better than 8% over its history. Car loan is 2½%..."

Conversely: Home mortgage is down to nearly all principle and we want to own our home free and clear.

Here's the bottom line, for us: Perfect storm: Our retirement account tanks and they reduce our SS benefits. We'd have to cut back severely. If that meant we'd take a bath on the Jeep, or just plain lose it: Not good, but survivable. But if we lost the house when it was nearly paid-off?

So this year I'll cash-out what remains of my 401K and we'll pay off the mortgage. We'll let the car loan ride.

We haven't had a mortgage for quite a few years but I can still remember the first month I didn't need to write that check. Sure, we've got to put money aside for taxes and insurance, but dang it feels good not having that hanging round our necks.

If you can afford to do it without penalty, I say go for it.