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- Apr 14, 2006
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- 23,232
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
You must be new to this married business.
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
You must be new to this married business.
You must be new to this married business.
How does tying up money in the house help with cash flow? Yes, you need less to live on, but you also have less money to help fund it. I draw the opposite conclusion, that to improve cash flow it's keep the mortgage, and have more money in the bank.There is also the cash flow consideration. Right now you are very close to retiring. If you have mortgage paid off, then you need less each month to live on, aka your budget. Not knowing your income situation and tax related issues, combined with the emotional aspects, there is not a straight forward simple answer. Yes the bonds pay more than the interest, but you also have to come up with the principal amount each month once you are no longer working and that has to come from somewhere.
Isn't this risk arbitrage? The bank is probably considering you an AA risk and you're relending it at BBB risks. Also, aren't you really paying the mortgage from that 1.7% MM fund?
Do you have other lower yielding investments that could be redeemed to pay off the mortgage? That way you can both win... sell the lower yielding investments and use the proceeds to pay off the mortgage and keep the corporate bond portfolio.
.... Right now I have a substantial balance in a Vanguard MM paying 1.7%, and that is my liquidity source that could cover 3 years of expenses if everything else somehow stopped. Paying the mortgage off would come out of there, and I don't feel like giving up the flexibility of that highly liquid money and convert it into home equity.
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
Nope, you must be.You must be new to this married business.
This is a key point - flexibility. Once the loan is paid off, the funds are locked in the house and unavailable any longer unless you refinance or sell.Right now I have a substantial balance in a Vanguard MM paying 1.7%, and that is my liquidity source that could cover 3 years of expenses if everything else somehow stopped. Paying the mortgage off would come out of there, and I don't feel like giving up the flexibility of that highly liquid money and convert it into home equity.
What about happy husband-happy life? Shouldn't that result in nothing else to discuss?
You must be new to this married business.
Nope, you must be.
I don’t agree with the overwhelming pay it off crowd. Going into retirement with a mortgage is perfectly OK if your cash flow can cover it and you have a terrific deal there.
I appreciate the humor that other people have brought to the discussion; I had hoped that the title of the thread might create the space for that.
... Right now I have a substantial balance in a Vanguard MM paying 1.7%, and that is my liquidity source that could cover 3 years of expenses if everything else somehow stopped. Paying the mortgage off would come out of there, and I don't feel like giving up the flexibility of that highly liquid money and convert it into home equity.