I’m trying to pay down my mortgage ASAP

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  • #82376 Reply

      I have 250k left on a 310k home. I have two paid off cars worth around 40k each. Does it makes sense to borrow money against my cars and pay towards mortgage because even though rate is higher car loan is simple interest whereas mortgage amortized.

      #82379 Reply

        Maybe and I mean *heavy* maybe it could make sense to get a cc loan if the transfer cost is extremely low and you *know* you can pay it off before they nail you with extreme charges.

        I did that 2x for big expenditures lol sadly cc companies figured that out so they don’t give freebie checks much now.

        #82380 Reply

          If you’re dead set on paying your mortgage off early, don’t do it by paying a little bit more here and there. Save up all of you cash until you can pay it all off at once. If you put all your money into your mortgage for the next 5 years and pay the principal down to just $10k…the bank can still foreclose on you, and you would have more money wrapped up in the property that you could lose all in one day.

          If nobody can convince you not to pay it off early, what you should do is take all the cash that you were going to use to pay extra on your mortgage and put it into a high interest savings account until you have enough saved to pay it all off at once. The reason, the current interest rates on high yield savings accounts are probably right about the same as your mortgage interest rate (4.5%) so your net cost is zero. (You gain the same amount in interest on your savings account as what you are paying on your mortgage). But your savings account is highly liquid and federally insured.

          I know most people want to pay their mortgage off early for “security” but in volatile economic times having $200k in a savings account can give you a lot more security than having mortgage free housing. You lose flexibility and add risk when all of your wealth is tied up in a single asset that can be destroyed in 10 minutes by a malfunctioning hair dryer.

          #82381 Reply

            I will not understand why people pay so much for vehicles, let alone 2 of them. I get you have to have transportation but a really good used car is like half the price or less. A huge amount of debt that can just eliminated from smarter choices.

            #82382 Reply

              No, mortgage debt is good if you have a low rate. Keep your mortgage if it’s a low interest rate. Make your extra money work on its own…

              #82383 Reply

                Sell your 80k worth of cars and buy 20k worth of cars and put the rest on the house.

                #82384 Reply

                  What on earth, why would you want to do this? What are you trying to achieve? Definitely don’t do this.

                  #82385 Reply

                    In fact, don’t pay off your mortgage early. Your mortgage rate is virtually guaranteed to be lower than inflation right now. The bank is paying you to keep their money.

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