redview
New Member
Cash: $ 0.70
Posts: 3
Joined: 04 Oct 2005
Location: indiana
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I have an extra 40K 
My mortgage is at 6% 
The most I can get on CDs or ING account is say around 4% 
(because I dont like tieing up large amounts)
my retirement is pretty steady at about 8% so I will put ten more K there.
I am wondering if it would just make more sense to put an extra
200 a month on my mortgage payment instead of
doing all the other stuff, and keep the rest in a ING account where I can
use it if I need to. 
What do you think? No car,credit or other debts, Not a risk taker. 
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Tue Oct 11, 2005 1:50 pm |
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jlee1224
Full Member
Cash: $ 12.65
Posts: 63
Joined: 26 May 2005
Location: Baltimore
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How much do you make a year? How long you gonna live in this house? How much do you have left on your mortgage? How big is your emergency stash? Have a 401k with match? Have any IRAs? Married?
6% loan, with the tax deduction, is probably about 4-5%, depending on how much you make. So you have to compare that to what you could be getting if you invested.
If you have no emergenncy money, or not enough, then I'd put the $40k to that (people say 3-6 months of expenses, in case you get fired, disabled, etc.)
There's just so many variables (thus, the questions). If this is truly extra money, you can fill in holes in your financial picture. Are you under-insured? You contributing to your 401k to full, or at least to any employer match? You have an IRA - a ROTH if your income is low?
But taking into account that you said this is an extra 40k, and you are not a risk taker, then paying $40k off your mortgage will make you feel better, and not a bad return for a non risk taker of 4-6% short term.
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Tue Oct 11, 2005 2:38 pm |
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