Paying off Mortgage and Equity loan
My wife and I are over 70 and retired. We have a yearly gross income of about $80,000. We have an annuity about $160,000 which I can use to pay off my mortgage and equity loan. My mortgage is about $20,000 at 3.5% but I have only been paying the variable interest on my $120,000 equity loan. Should I cash in my annuity and pay everything off? I don’t have any other tax-deductible items other than my mortgage and equity interest payment.
Thank you!
Terry Says
You should pay off the home equity loan as soon as possible, but likely not cash in the annuity. You’d have to ask about any penalties, and how much cash you could get out, and the tax implications of cashing it in.
Your original mortgage at 3.5% is fine to hold. But check the terms of your home equity loan. One day there will be a balloon payment due! Do you know when that is, the required total payoff?
You don’t mention other savings, but you should be thinking about the implications right now.
Are you sure you want to remain in this home, given this much debt? Is it time to just sell the home and be out of debt, and maybe move to a senior rental community? Just a thought! This is part of a big picture discussion of your financial future.
You might want to find a fee-only FIDUCIARY advisor to advise you — about your entire financial future. Read this:
https://www.terrysavage.com/pam-krueger-wealthramp/