Hypothetically speaking...

If you had $13,000 a year to either invest or pay your house off, which would you do and why?

If you invest, it keeps you in a lower tax bracket, if you use it to pay your house off, it'll be paid in less than 10 years.

it's not like you need it to buy more Cuban Cigars or nut'n

Theoretically, you should make more on an investment than the interest you pay on your house.

with only those two choices, I might actually allocate some to each.

Realistically, though if this is the result of a raise, the first allocation would be to increase retirement contribution. In a bigger picture,

the question of reserve funds for unknown would also be a consideration.

MACs, sorta depends on where you plan on investing and your anticipated rate of return. If you do not believe you can get a return that exceeds the rate you are paying on the mortgage, pay down the mortgage. There are a million potential options/variables to consider, but the above consideration will likely get you where you want.

lots of factors to consider, but assuming the is "extra" money (i.e. there is already an emergency fund of several months worth of living expenses) I would pay off the house.

Reasons: 1. the security of not ever having to face foreclosure due to a job less, etc. 2. guaranteed rate of return vs. speculative return 3. once house paid off, you have significant extra cash flow that can be allocated to investing

You're an older guy, right? Should be moving towards more stable investments, less risk. I'd consider 3/5/6, but probably pay off the house if the safer investments won't return more than the interest rate on your mortgage.

MACS........

Do the latter.

In this investment climate only the LUCKY people w/ disposible income who timed the market to buy last Feb thru May are the ones who made a killing!!

You should have bought FORD stock last Feb-April when it hit bottom at $1.50 per share.

You have to wait for those moments and go BALLS IN to make real money.

PAY OFF YOUR HOUSE.

Not having a mortgage is......... great!!!!!!!!!!!

Especially when you get laid off.

In this market,

pay off the house. I had a similar situation about 10 years ago. I am glad I paid off the house.

Dave (A.K.A. Homebrew)

Agreed. Pay off the house. This market is still volatile and nobody knows what investments are solid right now..nobody.

Too many market and other variables to give a fair reply.

Age

value of home

housing market

job security

portfolio

rate

pre-payment penalty

life and disibility insurance

...

Too many market and other variables to give a fair reply.

Age

value of home

housing market

job security

portfolio

rate

pre-payment penalty

life and disibility insurance

...

Like other have said it depends on what your interest rate is VS what you're investments are likely to yeild. You personal preference of paying down the mortgage faster VS having a big portfolio also plays a roll. Myself, I have a 15 year mortgage and I just finished year 6 of payments. They get them minimum payment every month and nothing more. I've been splitting my investments between a Roth and a 401k. This year I have a little extra cash so I'm going to put it in a Roth for the wife as well. I figure taxes are going to go up at some point in the future so I'd rather pay the taxes today and take the money out tax free when I retire.

i'd definately pay off my house 1st.........

I would buy lots of Hemp !!!!!!!!!!!

Pay off the house...I don't see any good traditional investments over the next few years in this economy.

What rfenst said, so many variables but one calculation is:

Take the % you are paying on the loan minus your tax bracket and if you feel you can do better than that by investing go for it.

The market is always a risk so do you want to invest very conservatively or gamble. Over the longer period the market returns always have beaten mortgage interest payments and you still have the option later to use those returns to pay off the house early if desired. If you pay off the house you lose the deduction and are house equity rich but it is not liquid.

IE: 5% loan - 25% tax bracket = 3.75%

DED

Use the money to set up a Forex trading account on margin.

tax bracket only factors in if you otherwise are able to itemize.

as to market rates being better than mortgage rates historically, that may be true over a long period of time. However, there are many 7 - 10 year segments that it is not true. The other reality is that most people's investments under perform the market average. So if the DOW averages 10% over x period of years. Most people's ROR will be less than the average due to transaction costs, advisory fees, money manager fees, etc. etc. There is also the cost of panic buy/sells where people choose to get out or in at the wrong time, as well as the potential additional tax costs with mutual funds (funds buys IBM at 2, IBM is at 8 when they buy, IBM drops to 5 and is sold by the fund -- you get hit with a 1099 for the rise from 2 - 5 while you suffer a loss from 8 -5).

$13k to inveat at today's returns is miniscule.

Payoff the house and then invest in ammo..

wheel,