Hello, everyone. This is my first post. I am impressed by the collective wisdom of this group, so here goes:
I own a building lot on a golf course that I'm holding for investment and/or possible retirement home. I anticipate building or selling in 3-5 years.
I have sufficient funds (currently parked in a tax exempt money market fund--I'm in the 35% bracket) to pay off this loan right now ($110,000 @ 5% interest-only; balloon due in 2 years).
This MMF constitutes 10% of my portfolio, and represents the bulk of fixed income portion of it. I will be receiving a non-COLA pension as early as age 55 (I'm 53), so I'm comfortable with such an aggressive equity component. Any new $$ I get in the coming years will be added to the MMF, so I'll be raising the fixed-income percentage as I get closer to retirement, no later than age 59.
Question is: am I better off reducing my carrying charges by paying off the note or continue to pay the interest and have it be offset by the interest on the money market fund? The loan is a second mortgage, so the interest is deductible.
Thanks.
I own a building lot on a golf course that I'm holding for investment and/or possible retirement home. I anticipate building or selling in 3-5 years.
I have sufficient funds (currently parked in a tax exempt money market fund--I'm in the 35% bracket) to pay off this loan right now ($110,000 @ 5% interest-only; balloon due in 2 years).
This MMF constitutes 10% of my portfolio, and represents the bulk of fixed income portion of it. I will be receiving a non-COLA pension as early as age 55 (I'm 53), so I'm comfortable with such an aggressive equity component. Any new $$ I get in the coming years will be added to the MMF, so I'll be raising the fixed-income percentage as I get closer to retirement, no later than age 59.
Question is: am I better off reducing my carrying charges by paying off the note or continue to pay the interest and have it be offset by the interest on the money market fund? The loan is a second mortgage, so the interest is deductible.
Thanks.