Should They Pay Off the Mortgage?

[Newby]

I would think houses will sell FAST at the right price. If you have a guy with a $300,000 house and good credit I would think he could pull $100,000 loan out of it anytime he wants.

I think there are more factors to your example like bad credit or bad debt ratio or something.

 

[scagnt83]

Not sure of the exact circumstances of the HELOC; but the auto loan made no sense... although the bank has gone out of business now... lol.

 

[padthaiforlunch]

Well, he was retired and had little income. And the bottom was falling out of the housing market. And banks pretty much stopped lending to anyone with less than stellar credit.

I don't know his credit score, but I do know it took him two years to find a bank that would lend him money on his paid-off house.

 

[AtlantaLife&Health]

They can refi it and maybe free up a few hundred more bucks per month. Good stuff. Do not pay off the mortgage!!! You would be putting money into a depreciating asset. They very well may never see that money again. It's not smart putting your cash somewhere where you have to qualify to access it. Credit score better be good and income too. Let's not forget market values. Cash is King. Use other people's money. Safeguard your money. They have plenty of income and plenty to live on.

 

[billberry12]

I'm sold. Don't pay off the mortgage. Keep the cash.

 

[0b1kanobee]

If they have liquid assets of 900k, I would pay off the house myself given the situation presented. Without sitting down and getting to know them, their health, their wants, needs and a few other things, I would have to go with paying off the house. Unless they are in the upper income tax bracket I don't see much good in the mortgage interest deduction and just like all the other what ifs, that might go away one day with new tax laws I dunno.

Anyway paying off the mortgage is providing a return on investment that is much more reliable than anything else out there right now and for the foreseeable future. It's also difficult to put a price on the piece of mind it brings knowing your home is finally paid off, especially at that age. This is a no brainer for me if they truly have 900k liquid. And if they have 900k liquid, that is way too much! Some of that money better be working somewhere.

 

[joymali]

They are tax advantages to pension contributions and interest payments on mortgages are tax deductible so one has to compare these advantages.