No. of Recommendations: 0
I just received $90,000 from an insurance policy. I now have enough to pay off my house which is worth roughly $300,000, but most of my savings would be depleted. I have a 20 year mortgate @ 6.625% with about 17 years remaining. I have been making additional payments of $100 per month towards principle. Although I have been making some good gains the past two years in the market, I wonder if it makes more sense to pay off the house or keep investing? I know my luck won't hold out forever in the market, whereas I will have a certain peace of mind being debt free. I am married with no children, I am 42 and my wife is 39. I am currently contributing to a 401K and a Roth IRA. I fully realize that I will lose the tax benefits if my house is paid off. Any suggestions?

I wouldn't deplete your savings to completely pay off the house. You should keep a 6 month emergency fund. After that, it is personal choice. Some people prefer the guaranteed return of paying down the mortgage. Others prefer to invest to try to get a higher return than their mortgage.

Your mortgage rate is higher than current rates. Bankrate is listing the 15 year mortgage at 4.67%. If you prefer the higher risk path, you could refinance your 20 year mortgage to a new 15 year mortgage and then invest in the stock market to try to get higher returns.

Pay off the house, invest, or refinance and invest. Do whatever that allows you to sleep at night.

IF

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