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What Would You Do

August 18th, 2010 at 01:19 pm

Ok my fellow bloggers, I need your opinions. I have a rental that has a balance of $84.1K that I could pay by Dec 2011. Below are my thoughts:

1. While deployed to Iraq, I put $10K away in SDP which I can withdraw now. I was going to just add it to my Retirement Home Down Payment Sinking fund which currently has a balance of $51K. However, I could put that towards the current mortgage instead.

2. I currently have $14K in my Car Replacement Fund. I'm not planning on buying a new car until the summer of 2012..that's when I'm retiring from the military. I could take that $14k and put in towards the mortgage as well.

3. I'm currently throwing an additional $2500 monthly towards the mortage. If I was to take the 9K and 14K and bump the snowball up to $3000K in Jan 2011(which I should be able to do without a problem with my raise,I'm in the military), I would pay off the mortage in Dec 2011.

4. Then I could take my snowball of $3000 and the rental income of $1100 and rebuild my new car fund and then some with no problem. All the while, I have $51K in my home down payment acct.

5. I guess the main thing I'm wavering on is do I just put the money in my home down payment account since this is a rental and I will probably end up selling it in 2012 anyway. I also love the idea of having a paid for piece of income producing asset that paid in full.

6. I'm just interested in seeing what others think. Thanks in advance!

Posted in Uncategorized | 5 Comments »

5 Responses to “What Would You Do”

  1. MonkeyMama Says:
    August 18th, 2010 at 01:58 pm 1282139929
    1282139929

    I don't see any reason not to (you have plenty of other cash funds if you need a car sooner, etc.).

    Until I got to #5? If you are just going to sell the home anyway, I do not see the point in paying it off. I think it makes more sense to put all that in your down payment account.

  2. MonkeyMama Says:
    August 18th, 2010 at 02:00 pm 1282140000
    1282140000

    P.S. Reason? You would be tying up all that cash for no reason. It's not like it would save you any interest if you are just going to sell it right after it is paid off. I wouldn't tie up all my cash for no reason.

  3. NJDebbie Says:
    August 18th, 2010 at 02:06 pm 1282140397
    1282140397

    I think if you are planning to sell the rental in 2012 you should not pay that loan off. In our case, we paid off our rental so that we can have extra income and God forbid we lost our jobs we can always sell our primary and vacate the rental so that we can move in. We can easily maintain the rental without tenants for about $500. Good luck on your decision and let us know what you decide. By the way $2500 extra on principal is impressive!

  4. Ladya70 Says:
    August 18th, 2010 at 02:13 pm 1282140839
    1282140839

    Thanks everyone, I'm not for sure if I will sell the rental right away or not. NJDebbie, I also like the idea of having that extra income. It's near a military community so it should never have a problem being rented.

  5. Jerry Says:
    August 20th, 2010 at 08:03 pm 1282334610
    1282334610

    I agree with MonkeyMama, if you are going to be selling the place anyway then why tie up all the cash? I'd rather have it elsewhere and maybe lead to more liquidity or something. When you retire you will have the insurance of that income, anyway, plus whatever else you decide to do after that point...
    Jerry

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