Paying off our mortgage.
When my mother passed away last year she left me a nice sum of money. Not a fortune by any means. My husband wants to use most of it to pay off our mortgage. We owe approximately 95,000.00. We are both in our mid sixties. I’m just not sure that’s the best way to use the money. We have other investments/savings so doing this wouldn’t wipe out all of our available funds. What do you think?
Terry Says
I hate to see you become “cash poor” — although holding cash these days doesn’t earn you much money. This is a decision that is best made in the context of a complete financial plan. Check one of the blue boxes in the top right corner of my website to find a FIDUCIARY financial planner — one who charges only a fully-disclosed fee and is not out to sell you stuff!
As an example, you might be better off investing a portion in a long term care insurance policy that gives your heirs a death benefit if you don’t use it. For sure, pay down any credit card debt at high rates. And consider how long you plan to stay in your home — and whether it might need repairs, or higher taxes might be coming. there are a lot of moving pieces in a decision like this — and you can’t go wrong leaving it in the bank right now, even though you don’t get any return. You won’t lose money either, while you consider all the possibilities with some help from a pro who is on your side.
I’ve always thought it was a good idea to pay off your mortgage before retirement. But now I think that if you can lock in a 15 year loan (refinance) below 3% you might be glad you did. You’ll have to keep paying, but I think there is a good potential for inflation to push rates higher in future years, given all the “money printing” we are doing.
