Money Matters
cnstarz
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Paying off mortgage early
Hey ladies!
I know the general idea around here is that you really shouldn't bother paying off mortgages early. Do y'all say that because of the tax deduction for mortgage interest or is there another plus that I'm not seeing? We don't itemize, so I'm wondering what to do with some extra $$$.
Thanks!
Re: Paying off mortgage early
I've heard its only recommended to pay off the mortgage early if the house you are in is your FOREVER home. If it is not your forever home, then use the extra money to save towards your next/forever home or other savings projects.
I think people on this board are split on paying the mortgage off early. The less risk averse crowd would say that historically you could earn more money in the market than you would get by paying off the mortgage early. (Which you could then use to pay off the mortgage)
The other side says I don't want to worry about loosing money in the market I want my home paid off early. Once I pay off the mortgage I have the freedom to do whatever I want with my life, ie quit my job, follow my passion, or I'll just start saving outside of retirement vehicles.
We personally are split on this, we want the benefits of the market but also want to pay off our home early. So we have a little money outside retirement that is earmarked to pay off the home. We also pay extra on our home each month.
Depends on how long your staying, if less than 10 years I would just save up for putting more money down on my next house. Over 10 years the interest you will save will compound.
For example on a 100,000 note, 30 years, 5% interest, If you pay a 100 a month extra for 10 years you will save about 3500 in interest. At 5 years the savings is only about 1500.
People who say that they dont pay it off early because of the tax dedution I think are crazy. Say your in the highest tax bracket for every 100 in interest you pay a year you will only save 35 bucks on your taxes so its still costing you 65 bucks.
Some people say that its better to invest the extra money than to pay it off early. Depends on how much of a risk taker you are. Personally I would rather pay off the mortgage as the market can tank (like last year) and lose a portion of the extra money. On the other hand it can go way up and you can make a lot of money.
Actually depending on your income you can deduct 2500 of SL interest.
Thanks guys! Your input was very helpful! We plan to stay here at least ten years, so I think we'll do a split with the extra $$$- putting half toward a future dp and half toward the principal of our current mortgage.
We just put our house on the market right now and have 2 mortgages (both fixed rates) but after the sale we are hoping to not bring any money to the table if we can help it.
Do you think we should go ahead and pay off the second mortgage right now? or what and see if it even sells.