Invest or Pay Off Mortgage?
REM #F702
By Ilyce R. Glink
Summary: It is a nice decision to have to make. Do you pay off your mortgage or invest the money? Ilyce gives personal finance advice to the lucky reader who is facing this decision.
Q: If I have the cash to pay off my existing mortgage (it’s at 5.75 percent)
and still have money in the bank, would it be smart to do so and then let the
house payment become a monthly contribution back into savings/investments while
living debt free?
A: It sounds like you have a smart financial plan, but whether you do it should
depend on what you're going to do with the money if you don't pay off your mortgage.
If you’ll invest it in a way that it returns more than 8 percent annually
to you, then keep the mortgage and invest the cash.
But if you're just going to leave it in a bank account earning 2 percent, then
pay off your mortgage.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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