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Question From a Reader: What to do With My Mortgage?
By JLP | February 4, 2008
I received the following email from a reader over the weekend:
Hey JLP,
Got a question for you. I just got my most recent Consumer Reports, and they had a blurb in there about paying off your mortgage early vs. taking that money and throwing it in an index fund. Their claim is that over any fifteen year period the index fund was 100% better than paying off your mortgage early. Do you have any insight on doing this? I was thinking of doing that instead and just paying off the house when the balance becomes greater than the pay off amount on the mortgage. I guess the biggest thing I can’t figure out is whether or not the tax hit on a taxable investment negates the whole thing.
Thanks
-Jerry
My response:
Jerry,
Longtime readers of this blog have heard me rant about this topic lots of times. So, rather than rehash those thoughts again, I’ll point you to the posts on this topic:
Money Magazine Takes On Six Financial Dilemmas
Which is Better: a 15-Year or 30-Year Mortgage?
Ever Wonder What a Mortgage Amortization Looks Like?
How an Interest-Only Mortgage Works
Check Out the Latest Dave Ramsey Poll - The topic was mortgages.
A Follow-up to the Dave Ramsey Mortgage Post - This is Interesting
10 Great Reasons to Carry a Big, Long Mortgage
The Mortgage Deduction and Taxes
Should You Prepay Your Mortgage? - This was a popular question of the day.
How Much House Can You Afford?
Topics: Investing, Mortgages |