Rules on whether to pay off remaining mortgage

[The Grinder]

What is the name of your state?IL
OK Im a 62 yr old likelong self employed who has limited resources, but can easily pay off my 16K mortgage. And still have a good reserve left over. My payments are very cheap at $243 per month but not a fixed rate prob due to my self employment plus paying a bit high interest at 7.25% which is likely to go up at some point

Is it advisable to PIF the loan? My SS benefits wont be much come retirement age but I can somehow manage

Thanks in advance

 

[Zigner]

What is the name of your state?IL
OK Im a 62 yr old likelong self employed who has limited resources, but can easily pay off my 16K mortgage. And still have a good reserve left over. My payments are very cheap at $243 per month but not a fixed rate prob due to my self employment plus paying a bit high interest at 7.25% which is likely to go up at some point

Is it advisable to PIF the loan? My SS benefits wont be much come retirement age but I can somehow manage

Thanks in advance

Your question doesn't have anything to do with a legal matter.
This is a decision you will need to make with advice from a financial pro, if needed.

 

[The Grinder]

OK sorry I was thinking someone here could opine on this but thanks

 

[PayrollHRGuy]

OK sorry I was thinking someone here could opine on this but thanks

Unless there is some reason specific to your circumstances, I doubt there is a financial professional that won't think paying off a high adjustable-rate mortgage isn't a good idea.

 

[bcr229]

It would depend on how many payments are left. Most mortgages are front-loaded for interest so by the time you get to the end of the loan there's not a whole lot of interest to be saved by paying it off early.

 

[adjusterjack]

OK sorry I was thinking someone here could opine on this but thanks

I see this question often and the first thing I do is go to an amortization calculator to look at various scenarios.

Your payment of $243 per month - does that include escrow amounts for taxes and insurance? Or is it just P+I?

For illustration purposes let's use $243 as the P+I.

$16,000 will take you 7 years to pay off and that will cost you $4449 in interest.

Here's the calculator I used.

Mortgage/Loan Calculator with Amortization Schedule (bretwhissel.net)

Run a few scenarios and decide what you want to do.

I can tell you from my own experience that there is no better feeling than owning one's home free and clear and being free of the lending industry vultures.

OTOH, there are people who will tell you that you can invest $16,000 in the stock market and make a lot more money than the interest you are paying. Of course, those people are losing their butts this year while the stock market is tanking.

My vote: pay it off if you can afford to.

Then put that $243 in the bank every month. You'll need to save up for your insurance and taxes.

 

[LdiJ]

What is the name of your state?IL
OK Im a 62 yr old likelong self employed who has limited resources, but can easily pay off my 16K mortgage. And still have a good reserve left over. My payments are very cheap at $243 per month but not a fixed rate prob due to my self employment plus paying a bit high interest at 7.25% which is likely to go up at some point

Is it advisable to PIF the loan? My SS benefits wont be much come retirement age but I can somehow manage

Thanks in advance

This is not legal advice, its personal advice. If you are going to retire soon and won't have much in the way of SS income then it would likely be to your advantage to pay the loan off a few months before you retire. I certainly wouldn't pay it off any earlier than that. However, if the house is going to need signficant work in the near future then it might be better off to keep your full reserves and pay the house off over the regular period of the loan.

 

[quincy]

In other words , there are no “rules on whether to pay off remaining mortgage.” It’s a personal decision based on the specific financial wants and needs of each individual mortgagor.

 

[adjusterjack]

Right. It's another one of those age old arguments about preferences.

Pay it off vs don't pay it off.
Ford vs Chevy
Mary Ann vs Ginger
1911 vs Glock
Asta vs Toto

 

[quincy]

Right. It's another one of those age old arguments about preferences.

Pay it off vs don't pay it off.
Ford vs Chevy
Mary Ann vs Ginger
1911 vs Glock
Asta vs Toto

You missed Coke versus Pepsi.

 

[Just Blue]

You missed Coke versus Pepsi.

Root beer...or Ginger ale.

 

[AlmostThere]

Android vs iPhone

 

[adjusterjack]

PC vs Mac

Evolutionism vs Creationism

Star Trek vs Star Wars

Jason Voorhees vs Michael Myers vs Freddy Kruger

Rocky vs Rambo

Jack Ryan vs Jason Bourne

Vampira vs Elvira vs Morticia vs Lily

 

[quincy]

Root beer...or Ginger ale.

Root beer floats versus Boston Coolers.

 

[adjusterjack]

Oreo vs Hydrox