Camas Lilly
Recycles dryer sheets
- Joined
- Sep 18, 2007
- Messages
- 318
Assuming you have funds set aside to fund your retirement expenses, if you had an additional $411,618 in savings you could set aside, invest and use solely for the purpose of paying a $432,225 mortgage, what would you do?
Assuming the interest rate you will get for a 30 year loan is 3.5%. I am trying to figure out if I should just pay the mortgage off or set it and forget it for however long makes sense.
1) Would you pay it off and not worry about a mortgage?
2) Would you pay chunks? If so how many?
3) If you financed, how long a term would you do?
4) What would you invest in to make it worth the risk?
5) What rate of return would you expect on these funds?
6) What about the “what ifs”? What is the worst that could happen? What if the market falls and a set it and forget method it backfires?
I am struggling with this one. I hate debt, but I also understand the benefit arbitrage. This is a pretty good chunk of money to take on much of any risk, so then you wouldn’t really earn that much over 3.5% the cost of the mortgage, right?
The other thing is if you pay in chunks, your minimum payments never change unless you refinance, and that costs as well, so you are still stuck with a large payment in the event of an emergency, not that this even matters.
We have separate funds and a comfortable retirement budget set up, so this money is solely for this debt.
Thoughts?
Assuming the interest rate you will get for a 30 year loan is 3.5%. I am trying to figure out if I should just pay the mortgage off or set it and forget it for however long makes sense.
1) Would you pay it off and not worry about a mortgage?
2) Would you pay chunks? If so how many?
3) If you financed, how long a term would you do?
4) What would you invest in to make it worth the risk?
5) What rate of return would you expect on these funds?
6) What about the “what ifs”? What is the worst that could happen? What if the market falls and a set it and forget method it backfires?
I am struggling with this one. I hate debt, but I also understand the benefit arbitrage. This is a pretty good chunk of money to take on much of any risk, so then you wouldn’t really earn that much over 3.5% the cost of the mortgage, right?
The other thing is if you pay in chunks, your minimum payments never change unless you refinance, and that costs as well, so you are still stuck with a large payment in the event of an emergency, not that this even matters.
We have separate funds and a comfortable retirement budget set up, so this money is solely for this debt.
Thoughts?