Should I use my investments to pay off my mortgage? I don't have any other debt, except the mortgage.?
- cuztis209Lv 41 decade agoFavorite Answer
No. Your mortgage is likely at a low interest rate because it is backed by your house. The mortgage interest is also tax deductible so if your interest rate is 7%, you are really only paying around 5% considering the tax break.
Assuming your investments average more than 5% interest after taxes (they should be closer to 10% or you're invested in the wrong things), you should not pay off your mortgage by cashing out your investments.
If taxes are eating up your investment returns, it is likely that you are not properly using tax advantaged accounts. 401k, IRA, ROTH IRA; check those out for some tremendous tax advantages.
- donald eLv 41 decade ago
that depends, you are in a most unusual situation. first of all taxes, the mortgage is the last great tax wirte off we have, do you need the write off. will you be using all your investments and available cash to pay off the mortgage if so not a good idea, do you have extra ready cash?? in case of emergencies like health, job, accident etc. if you do go for it if you don't don't. in times of emergency the investments if you have them can probably carry you for an extended period of time to get back on your feet, once gone and you have a situation like a job loss etc. its nice that you own your property free and clear but would you be able to cash out of it to carry you to you are on your feet. remember lenders look at little things like a job and income before they make a loan. remember if your world goes upside down, they can take your house but they cant attach the investments, so you take them down the road with you.
- 1 decade ago
I say yes
open a home equity line of credit and be able to use your paid off house as instant money for emergencies or other investments.Source(s): also check this website out www.u1stfinancial.net/colefowler
- mmmkay_usLv 51 decade ago
I say yes
Owning your home free from mortgage will allow better cash flow
then you can save that money for your retirement
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- mister edLv 71 decade ago
no most folks would really get i with a be tax bill -- if in doubt check with your cpa!!!!