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Old 05-07-2016, 03:22 PM   #21
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Things to consider--
Do you get any mortgage deduction on your taxes? This changes the cost of borrowing against the home.

Can you get a 0% credit card? Put expenses on that and pay the extra toward the car. Discover occasionally has an offer with 0% interest and no transfer fee. Easy way to make a big payment towards the car.

I favor the idea of paying extra toward the car--perhaps using a 0% credit card to accelerate the process. Easiest, fastest, least risky mechanism.

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Old 05-08-2016, 06:42 PM   #22
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I'll say ditto the the others.

Refinance your car loan. Alliant CU, Penfed, etc. are under 2% for a car loan.
We refi'ed our 2009 car 3 times before it finally got paid off. The last loan was 1.25%

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Old 05-08-2016, 09:29 PM   #23
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Originally Posted by mbnj77 View Post
Of course, the rub is market performance and our time horizon is not long enough for these dollars to underperform.
I think you just answered your question.

Many times it pays to be real cute with these move. But when it doesn't pay, it may really, really not pay.

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Old 05-09-2016, 12:54 PM   #24
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You cannot compare uncertain, volatile market returns with the guaranteed return that comes from paying off your car loan.

You should prioritize paying off the car. By reducing some retirement savings and cutting some other expenses you should be able to pay it off within 2 years. Then you'll have an extra $1000 every month to invest, in retirement accounts and elsewhere.

I took out a car loan once and invested the balance. But my interest rate was 0%. The arbitrage advantage was guaranteed.
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Old 05-09-2016, 01:14 PM   #25
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Hi, all; I have a similar question about a possible refinancing and condo purchase, and thought this might be the string to ask...

Currently 66 and "semi-retired"...working about 100 or so days year; spouse (58) is taking a "sabbatical" to finish her Ph.D. after taking early retirement from an international development bank. In addition to my p/t income (about $80,000/year), we collect about $155,000 in cola-ed annuities and have another $120,000 in cola'd annuities and social security kicking in in the next 3 about $4.5 million in other liquid assets (40/60 post tax/retirement). So we're in pretty good shape.

Currently own an urban town house in high income/high tax area that we love, worth about $1.2-1.4 million with a 4.75%, 30 year mortgage (in the seventh year). Thinking of refinancing with a 2&7/8% 15 year mortgage, which will cost us an extra $600/month ($5,000 total vs. $4400, including taxes & insurance). So, we pay a little more each month, but we pay off the loan much quicker with MUCH less interest. Seems like a no-brainer, but....anybody have any thoughts?

Also, thinking of soon buying a second home (condo) in a no-tax state (FL) and making it our primary residence. This would save us $25,000/year or more in state income tax when our additional annuities and RMD's kick in. Our understanding is that we couldn't spend more than 183 days in our current residence, but that would probably work if we combined it with 2-4 months each year traveling and 2-4 months per year in FL. Anybody have any experience with this kind of thing?

Thanks much!

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