Finance question..
 

Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.
--

John H

Finance question..
 

JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.

Finance question..
 

BAR wrote:
JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.




Maybe herring could buy some golf lessons...


--
Birther-Deather-Tenther-Teabagger:
Idiots All

Finance question..
 

"BAR" wrote in message
...
JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into
account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.


It's hard to make a judgement without knowing the full story. I'd suggest a
CPA tax accountant. You could also talk to a Fidelity consultant, although
they are of limited value when making actual recommendations.

I wouldn't rush to pay off an affordable mortgage, but you could make an
extra payment to pay it off faster.

--
Nom=de=Plume

Finance question..
 

JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.
--

John H
What? You didn't get your mortgage expunged in the last go round?
You must have had too much equity.

Finance question..
 

On Thu, 17 Sep 2009 06:53:29 -0400, JohnH
wrote:

Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

There is a strong probability that we will be heading into a highly
inflationary economy some time in the next few years. If so, 5%
mortgages of any kind will be totally unobtainable and cash will be
trash. I'd consider splitting the cash between two exchange traded
funds: TIP (Inflation protected treasury notes), and GLD, a gold
fund. For high current income and inflation protection consider LINE
(Linn Energy), currently yielding 11.6% and with a *lot* of oil in the
ground.

http://finance.yahoo.com/q?s=TIP

http://finance.yahoo.com/q?s=gld

http://finance.yahoo.com/q?s=LINE

Finance question..
 

On Thu, 17 Sep 2009 08:11:17 -0400, BAR wrote:

JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.


True, the interest is deductible. On the other hand, the earned
interest is taxable.

I've considered the 'unexpected expenses' scenario, and it's not a
player in the decision.

Thanks for the thoughts, Bert.
--

John H

Finance question..
 

On Thu, 17 Sep 2009 10:48:22 -0400, Jim wrote:

JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.
--

John H
What? You didn't get your mortgage expunged in the last go round?
You must have had too much equity.

Yes. I couldn't 'HONK' cause someone was paying off my mortgage.

Damn, blew it again.
--

John H

Finance question..
 

On Thu, 17 Sep 2009 06:07:37 -0700, "nom=de=plume"
wrote:

"BAR" wrote in message
m...
JohnH wrote:
Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

Do you have taxable income? Do you itemize? The 5.25% mortgage is not
really 5.25%, it could be as low as 3.5% when taxes are taken into
account.

It is easier to cash in a CD for unexpected expenses than it is to get a
mortgage on a house to raise the money that your CD currently has.

Just some thoughts.


It's hard to make a judgement without knowing the full story. I'd suggest a
CPA tax accountant. You could also talk to a Fidelity consultant, although
they are of limited value when making actual recommendations.

I wouldn't rush to pay off an affordable mortgage, but you could make an
extra payment to pay it off faster.

Well, I don't ask the 'financial manager' types, 'cause they'd tell me
to invest the CD proceeds in stocks, or whatever.

The CPA idea is good, but many of the folks here are much better.
--

John H

Finance question..
 

On Thu, 17 Sep 2009 13:31:45 -0400, Wayne.B
wrote:

On Thu, 17 Sep 2009 06:53:29 -0400, JohnH
wrote:

Given - CD maturing. Amount sufficient to pay off mortgage. Mortgage
rate is 5.25%. New CD rates - 3% for five years, 4% for seven years.

What would you do?

Stock market exposure is high enough.

Will be at the golf course pondering the situation. Back later.

No, I don't want to buy a red barn.

There is a strong probability that we will be heading into a highly
inflationary economy some time in the next few years. If so, 5%
mortgages of any kind will be totally unobtainable and cash will be
trash. I'd consider splitting the cash between two exchange traded
funds: TIP (Inflation protected treasury notes), and GLD, a gold
fund. For high current income and inflation protection consider LINE
(Linn Energy), currently yielding 11.6% and with a *lot* of oil in the
ground.

http://finance.yahoo.com/q?s=TIP

http://finance.yahoo.com/q?s=gld

http://finance.yahoo.com/q?s=LINE


Thanks, Wayne. Right now I'm not interested in putting more into the
market. This is purely a CD vs mortgage decision.
--

John H