Pay off the Mortgage or not – after sub prime crunch


This is a question that was posed just after the credit crunch hit (was in the forum but moved to the blog)

I have been patently sitting on the edge of my seat watching my taxable investments loose 30% of their value. I have 15 years before retirement. My home is worth $325,000 and I owe $45,000 on that loan. I have no other debt. Does it make good sense to cash in some of my investments and pay off the mortgage now; in doing this I would be accepting the decrease value in the mutual funds I sell and loose the interest deduction.

Reply by Mod:

Chances are you lost 40% or so on your mutual funds/investments. I wouldn’t cash anything out if you’re 10 years away, they’ll recover. IF you have a steady job then keep on trucking with existing payments. (In fact, buy buy buy!) you’ll regret selling anything right now. if you still have a job don’t sell a thing. by the time you start retiring you’d have recovered and gained.

2 responses to “Pay off the Mortgage or not – after sub prime crunch”

  1. I’m very suspicious of “investments” for the average American. My 401k has netted me ZERO return for 20 years. The crooks on Wall Street get to profit with my meager savings and give me none of their gain.

    I say pay off your mortgages as soon as possible. Banks get a lot of wealth from the interest they gain from you and since they created the principle for the mortgage out of thin air, they deserve NONE of it. Bankers are evil.

  2. It’s also a good example that to rely on your 401K as a sole source of retirement income is no longer enough. Plan for more.

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