I’m in a bit of a pickle and could use some advice. I’m about to come into some money from an inheritance. It’s enough to wipe out all my debts, including a big mortgage of $350,000 with a 6.8% interest rate.
I’ve been scratching my head over what to do. On one hand, paying off the mortgage seems like a no-brainer. I mean, where else can I get a guaranteed 6.8% return? But then I started thinking about the tax benefits of keeping the mortgage.
So now I’m torn. Should I just clear the debt and be done with it? Or would I be better off keeping the mortgage and investing the money elsewhere?
Anyone been in a similar situation or have some insights to share? I’m all ears!
Clearing your mortgage can be a solid move, especially with that 6.8% interest rate. It’s essentially a guaranteed return, as you mentioned. However, consider your overall financial picture. Do you have an emergency fund? Are you maxing out retirement accounts? If not, allocating some funds there might be wise. Also, think about potential investment opportunities. The stock market has historically outperformed 6.8% over the long term, though it comes with volatility. Ultimately, it depends on your risk tolerance and financial goals. If being debt-free would give you peace of mind, that’s valuable too. Just ensure you’re not leaving yourself cash-poor in the process.
Wow, what a great problem to have! Have you considered a middle ground? Maybe pay off a chunk of the mortgage to lower your monthly payments, but keep some for investing? That way, you get the best of both worlds. What’s your risk tolerance like? That could play a big role in your decision.
i’d say go for it and clear that mortgage! 6.8% is no joke. sure, you might miss out on some tax breaks, but the peace of mind of being debt-free? priceless. just make sure you’ve got some cash left for emergencies. and hey, congrats on the inheritance!