Is it better to pay off a my mortgage or keep the cash?

Question

I will be receiving a $125,000.00 inheritance in several months. My mortgage balance is $80,000.00.

My husband & I are 5-8 years sway from retirement. Is it wiser financially to pay off the mortgage now, or continue to make payments & put the cash in a CD, annuity, or some other type of investment?

(I like the idea of security that a paid mortgage would provide. We also have 401k accounts)

Answer 1

Pay off the mortgage as soon as possible. By paying off the home you will have one less bill to worry about and you never know what might happen later. You will also sleep better because you will have less worry.

If I had that amount in inheritance coming to me I would pay my home off fast.

Let's say you won the lottery and you had $500,000 after taxes. Would you pay off the house?

Answer 2

My own feelings on this are : Look at the interest you will be saving. And you will still have 45000 left over. I would pay the mortgage in a heartbeat.  I am 84. No youngster.  [ That interest adds up to a whopping amount over a period of time.]   Money saved is money earned.  And remember, the interest on your mortgage is figured differently than thatv on an IRA or CD. Check the bank and find out how nuch you pay in interest each month. It may open your eyes.

Answer 3

I would say it is better to pay off your mortgage.  Unless you can make more interest that you are paying on your mortgage, you will be losing money.   Depending on your mortgage interest rate.  A CD now is paying maybe 3%, but your mortgage is let's say 6%, it is costing your 3%.  Not to mention, if you pay off your mortgage, you can put your monthly payment into some other investment (e.g., an indexed mutual fund).  You will come out way ahead.

Answer 4

i tiank if you pay off the mortgage from the inheritance then it work out ilke this 125,000.00-80,000.00 that is 45,000.00

you said that you have 401k in accounts. Will can use some of thisinsome form of investment. this way you will still make same cash.But look after your inestmets carefuly. As the cash you make can go up or down.

Answer 5

I'd like the piece of mind from being debt free.  But if you can make a much better return over the next 10 years by keeping the mortgage and investing your money somewhere, then you should do that.  It all depends on your financial situation like if you can already support yourselves on 401K etc. Tough to say with the stock market and interest rates the way they are right now, but they should bounce back in 5 years or so according to the way the pendulum swings!