Amigo, if you are on a long mortgage, do yourself a favor and make an extra payment. It can take literally years off the length.
stusser
7246
Screw that, I got my mortgage at 3%, thatās the cheapest money Iām ever likely to see. Anything extra gets invested.
The best investment you can make is in your mortgage. One extra payment at the start of a 30 year shortened the length of the thing by roughly 7 years (donāt remember the exact mathā¦been a while). Investments like that donāt exist.
stusser
7248
That is wrong, the stock market is much better.
jpinard
7249
That canāt be real can it? I mean everyone would do that to have a 23 year loan.
stusser
7250
It doesnāt matter, when you compare it against putting that same money in the stock market for 23 years at 10% compounded returns per year.
jpinard
7251
Iām putting the extra I have left over towards paying off credit cards. That makes the most sense for me sadly.
stusser
7252
Oh, absolutely, pay those off first, no question.
KevinC
7253
Itās an extra mortgage payment each year that can reduce it like that. Not a one-time extra mortgage payment. I think, roughly, youāll pay off the mortgage in about 26 years as opposed to 30 with that sort of arrangement.
jpinard
7254
That makes more sense. I pay $100 extra towards principle every payment. So hoping that has the same result.
stusser
7255
That is a very bad idea, pay off credit cards first.
KevinC
7256
Thatās a bit of a blanket statement, stusser. Just like saying CPUs donāt matter for gaming, now that I think of it. You, my friend, appear to be a man of absolutes. :)
jpinard
7257
Ok I will do that instead from now on.
stusser
7258
Unless his mortgage rate is much higher than his credit card interest (needs to be higher to account for tax deductions on the mortgage interest), my absolute statement is absolutely true.
Mortgage rates havenāt approached credit card interest since 1981, when they hit 17%. Even if mortgage rates were 17% today (can you imagine?!) it would still be better to pay off a 17% creditcard first due to tax deductions on mortgage interest.
jpinard
7259
I donāt get tax deductions for interest anymore. I have no investments and so little āincomeā that hitting outside the standardized deductions hasnāt happened in a while.
stusser
7260
Right, they increased the standard deduction last year so most people take it now. So then your mortgage rate would have to be higher than your credit card interest, which I certainly hope it isnāt.
Apparently, Iām full of crap (What else is new) . I vividly remember proving this when I was getting my real estate license, but Iām looking at amortization schedules and it makes no sense. I must be forgetting something important about the specific scenario involved. Sorry for the confusion
Iām going to throw in one modifier to Stusserās advice: pay off your credit cards first ONLY if you then stop putting money on the credit cards. Do NOT cancel themāthat will hurt your credit ratingābut quit using them. Just stop. Put them in a drawer, forget you have them. Put in a glass enclosure with āBreak Glass ONLY in case of extreme emergency!ā
Too many people view an empty credit account as some sort of blank canvas that needs paint on it, and go on spending sprees. Pay them off, THEN put the same amounts each month toward extra mortgage payment (or 13 payments per year instead of 12).
And by the way, the easiest way to make that extra yearly payment is to make half payments every two weeks if your lender will let you. 26 payments per year = 13 monthly payments.
KevinC
7264
Yeah, thatās what I was thinking about when making the blanket statement comment. From strictly an interest/numbers point of view, the CC is definitely the way to go, butā¦
In any case, I hope Nvidia is ashamed of themselves. Instead of people talking about the amazing new 3080ās theyāre running and oohing and ahhing over DLSS and raytracing weāre talking about mortgage payments. Youāre a buzzkill, Nvidia!
