davemartin88
Full time employment: Posting here.
- Joined
- Aug 26, 2008
- Messages
- 812
Early retiring at the end of the month and will be getting a lump sum pension payment from a pension plan that was ended in 1995- will be about $140K which we're planning to use to pay down our mortgage a bit. In some ways, this is found money because really didn't expect it to be there when I left the business.
We have an interest only mortgage on our house at 5.62% so the required payment would decrease by about $650 per month if we put this money on that mortgage. We also have a rental house with a $140K mortgage at 6.75%, $1310 P&I payment per month, that we could eliminate so from a cash flow perspective, this seems like the way to go. This load is at a considerably higher rate as well so just seems like it makes more sense.
Understand that our "profit" on the rental house will increase but we've been limited because of our income for the last few years anyway for writing off this profit. We'll be selling the rental house in a few years but the idea of not having to make that payment is tempting? Net is that we don't really seem to be seeing much of a real tax savings from this mortgage interest because of income levels (a good problem to have, LOL) but thought I'd get some other perspectives?
Thanks in advance.
We have an interest only mortgage on our house at 5.62% so the required payment would decrease by about $650 per month if we put this money on that mortgage. We also have a rental house with a $140K mortgage at 6.75%, $1310 P&I payment per month, that we could eliminate so from a cash flow perspective, this seems like the way to go. This load is at a considerably higher rate as well so just seems like it makes more sense.
Understand that our "profit" on the rental house will increase but we've been limited because of our income for the last few years anyway for writing off this profit. We'll be selling the rental house in a few years but the idea of not having to make that payment is tempting? Net is that we don't really seem to be seeing much of a real tax savings from this mortgage interest because of income levels (a good problem to have, LOL) but thought I'd get some other perspectives?
Thanks in advance.