There is 9 years left on the mortgage. I lose the tax deduction if I pay off the mortgage. I lose the appreciation potential if I sell the stock. I gain ~$900. a month by not having to pay the mortgage, if I pay it off.
2007-02-27 12:11:30 · 5 answers · asked by duke 5 in Business & Finance ➔ Personal Finance
I'd say yes. The amount of interest you will pay by continuing to pay according to the mortgage terms is more money out of your pocket. The value of the stock may rise or fall but it's a gamble.
Ask yourself "If my house were paid off would I take out a $50,000 loan against it to buy stock?" I doubt the answer would be yes.
You can always buy more stock with the money you're saving every month and none of it would be wasted on interest.
It would also be a great mark on your credit record to have that paid off.
You also should consider the impact it will have on your tax filing for the year. The capital gains from selling the stock will put you in a higher tax bracket for the year any you won’t have the sizable deduction from the interest paid. You would eventually pay on the capital gains when you sell anyways, so it’s just a matter of whether this year would be suitable to enough to do it.
I hope this helps.
2007-02-27 12:30:45 · answer #1 · answered by Steven S 2 · 0⤊ 0⤋
The way mortgages work, you pay the interest up front, so 98% of your payment goes to interest, and 2% goes to principal (for example).
If you're down to 9 years, you're probably paying mostly principal, which means you won't save anything by paying it early.
And with what happened to the stock market today... I'd hold on to your money. Not to mention that the housing market sucks, so if you had to get your money back out, you'd be hard pressed to do it.
2007-02-27 20:17:13 · answer #2 · answered by T J 6 · 0⤊ 0⤋
It depends. Is the amount of your dividend more than what you are paying on interest in mortage? If your stock is outperforming the mortage interest rate, I would advise against it since in the long run you will be making more with your stocks than what you are saving by paying off the mortage.
2007-02-27 20:21:11 · answer #3 · answered by Mariposa 7 · 0⤊ 0⤋
Paay it off , what about the interest you are spending , and with the $900. extra a month you can go buy more stock.
2007-02-27 20:20:29 · answer #4 · answered by Anonymous · 0⤊ 0⤋
It's a very good feeling to have your home paid for.
2007-02-27 20:47:36 · answer #5 · answered by martywdx 4 · 0⤊ 0⤋