What would you do?

Pay the house off

  • Total voters
    15
mvnvltn

mvnvltn

Part's Limit Tester
Aug 22, 2007
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Sykesville, MD
If you had the opportunity to pay your house off would you do it, or would you just build on and keep paying on it?

I'm looking at the way the economy is going and am trying to decide what would be a good decision.

Bad idea, good idea?

Pro's, Con's.
 
LBZ

LBZ

Super Moderator
Staff member
Jul 2, 2007
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LarryJewell said:
But lose a tax write-off
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Really!!!?? Not in my country.

If heaven forbid you end up unemployed at least you got a place to live-as long as you can make taxes!!

Someday I might buy a house....
 
LarryJewell

LarryJewell

Back with his honey :)
Jan 21, 2007
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San Angelo
mvnvltn said:
What's a couple thousand once a year, versus $1200 every month?

How much interest could be saved over the next 25 years?

I spend that on my dually every couple month's.
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Good point

LBZ said:
Really!!!?? Not in my country.

If heaven forbid you end up unemployed at least you got a place to live-as long as you can make taxes!!

Someday I might buy a house....
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Call me, I buy fixer uppers :D
 
D

dmaxtruck

Perfect Sleeper
Jan 22, 2008
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I think it all depends on what interest rate you're getting. TBH at 5.5% or less it probably would pay you to stay around 40% leveraged on your house. You'd get a writeoff, you'd have the lion's share of your house paid off, and you'd have the money from the bank to invest elswhere.

The theory being that at 5.5% or lower interest, you could pretty easily reinvest that money into your house making improvements and increasing the value of the house, or put the money into some other investment. Either way the idea is to get a higher return than what you're paying in interest on your mortgage.
 
Diesel Pilot

Diesel Pilot

Hat? Suitcase? 50 BMG?
Aug 9, 2006
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Exactly what I would say!

All depends on your current interest rate. If it is lower than 8% you could easily make that money back plus more if you invested, even in a low risk type of investment.

Also, maybe talk to an accountant to determine how your taxes will shake out with or without a house payment.

The only correct answer is really what you would feel more comfortable with.
 
02freighttrain

02freighttrain

Team Salad Bartender
Aug 13, 2006
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sootville, Fl
Take out a huge mortgage and buy a new LMM Dually to pull your new Drag truck and your new sled pull truck. Also order 2 spare Banks type D motors.

Just Kidding, I'd keep a small mortgage and maybe even take out a second to free up some cash to invest. A bit risky, but as the old saying go's.....nothing ventured, nothing gained.
 
robertleeii

robertleeii

LMM Fanatic
Sep 2, 2006
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Houston, TX
being in the financial industry. my general answer (with out knowing your details) would take the money that you are planning on paying off the the house with and investing it. that way you can keep your tax wright off and make more money THAT YOU CAN ACCESS. your equity is not liquid and your investments would be.

paying off your house loans off eairly are not always the best moves. it is easy to show clients ways to use the money you would normaly use to "pay extra" on the house to invest it right so you create money to pay it off faster than if you put that money straight in the the principal of the loan.
 
mvnvltn

mvnvltn

Part's Limit Tester
Aug 22, 2007
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I have enough cash to pay my house off, and more than that already available in equity. My house rate is 6%. I figured pay it off, remodel with what is left. And if I need to, dip in the equity use what I need then refinance that. Does that sound ok?
 
LarryJewell

LarryJewell

Back with his honey :)
Jan 21, 2007
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San Angelo
LBZ said:
Actually Larry, I do plan to talk to you in May. I might buy in your area. Or maybe California - just as an investment property more than a permanent residence.
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I was buying investment houses here several years ago, but too many people got to watching the late nite invest in real estate with no money down shows and now theres no good deals to be had. I ended up with 26 houses that sometimes get to be real headaches, especially around tax time.

We have had a lot of people from California buyng homes here for investments lately, seems our prices are a lot cheaper than what they pay back home, there's several homes at the San Angelo Country Club that were purchased as rentals recently and one hugh house that was bought as a 2nd home buy an investor from California to come and stay in a few times a year while he oversee's his other investments here.
 
MaxFarmer

MaxFarmer

<--Heavy Smoker
Jan 22, 2007
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Albion, Nebraska
Wow, good thread. I actually asked about this last week I think in the tell us about yourself thread (hijacked, I know). Our house is gettin small with the 2 kids and the wife wants 2 more :eek: We were going to build a new house, but I was trying to find the right time also. Lately we've been discuessing just adding on to our house. I've heard stories that after adding on, it would have been better off building new and vice versa. Its just another one of those things that I wanna do right the first time. I still havnt gotten an answer as to wether or not building supplies are still high or if they are coming down in price yet? It seems to me that all commodities seem to keep getting higher and higher in price.....
 
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