I just turned 38 and I have about 160k(its worth about 320k) I currently owe on my house and my 5/1 ARM just went up from 2.575 to 4.575 in June and will more than likely go up again in 2020. I make about 130k per year and max out my 401k every year around 17500 per year. I dont have any other debt besides my home. I have about 600k in my 401k and about 280k in other investments. I am single and not married. I like the thought of being debt free but also dont want to miss out on better gains that I could potentially gain with that cash rather than paying off the mortgage. Also opetn to refinancing on a fixed 15 year note. Would like to hear various inputs that you may all may have with my current situation. Thanks!
Hi @jonhamman, welcome! Our real experts will chime in, I’m sure, but to clarify, are you asking about taking some of your other investments to pay off that $130K? Or diverting whatever extra cash you have now toward paying it off more quickly?
My vote would be to investigate that fixed 15-year loan in any case. Whether the savings go into investments or big screen TVs, better it’s in your pocket than the bank’s.
Otherwise, sounds like you’re ticking all the boxes. Congratulations!
We have a 15 year loan at a very favorable interest rate. While we could pay off our mortgage nearly completely, the payment is well within our means to pay monthly, and we are able to use the money we have in accounts to manage things like house maintenance and the occasional fun trip, which, for us, is worth making a monthly mortgage payment now.
Personally, I don’t love the idea of reducing a good investment balance for the sake of paying down your mortgage if you can get a good rate that allows you to continue to bulk up those long term savings.
Thank you for your input. I think that’s the way I’m leaning towards-the 15 year note.