Is paying off a chunk of your mortgage a good option

[clatoden99]

Is paying off a chunk of your mortgage a good option compared to putting money in stocks or into our 401k or a down payment on an investment property?
Assuming: You have $380K due at 3.5% over 26 years. You are in our mid-30's and have no other debt. You have $50k to invest and have enough of a cash cushion if needed. So You want to put this money somewhere.

[ygrey]

Invest overtime and keep the money going in a normal flow. You could hold on to other investments, but do not stop your 401(k) fund payments! You can pay off a load once you are close to finishing off the mortgage.

[Nutria]

Is paying off a chunk of your mortgage a good option compared to putting money in stocks or into our 401k or a down payment on an investment property?
Assuming: You have $380K due at 3.5% over 26 years. You are in our mid-30's and have no other debt. You have $50k to invest and have enough of a cash cushion if needed. So You want to put this money somewhere.

What about PMI? It's definitely worth doing if that $50K were to bump you above the 20% threshold so that you could eliminate it.

Otherwise, after the current long How much is your mortgage payment (principal and interest only)? thread, I think you might be chumming the water for a flame war.

[TexasHusker]

If you don't have confidence that you are willing and able to invest your money and earn something above 3.5%, then pay down the mortgage.

[snafu]

The OP's question seems simple but is complex based on personal factors. I'd keep running the specific numbers. Anyone paying PMI would likely benefit from contributing to employer's retirement program to capture all 'free' money and second, paydown mortgage tracking values in their district to build sufficient value to gain 20% equity needed to remove PMI. clatoden, you need to make sure the extra sums are going directly to reduce principal.

With PMI eliminated, I suggest bumping up retirement contribution to 15% or sum allowable based on income. Third, fund a ROTH savings vehicle. Debt free, paying down the mortgage in the early years reduces a major part of interest since it is front loaded. I suggest setting a personal goal of eliminating mortgage in 15 years. Of course we all understand that the line item 'Mortgage' is subdivided in most cases to include property [municipal] tax, interest, insurance for example. Technically, your home is a place to live not an investment product but if you stay aware of conditions, might very well offer tax free profit when downsizing is your best option.

[Eagle]

@clatoden99
We don't have enough information to go on. PMI is a big factor I agree. Age and your current investments also come into play. So for clarity please provide us more information:

1. Are you still paying private mortgage insurance (PMI)?

2. How old are you? There's probably a difference between 33 or 37.

3. Besides the 50k... How much do you currently have saved up (emergency fund) and invested (401k, Roth IRA, mutual funds, etc.)?

4. How long do you plan on working?

[sv2007]

Check out the thread titled approximately "how much mortgage payments you are making"; it's just next to your thread. Towards the end, lots of discussion on the good/bad of paying off.

[PhilDanley]

Have you maxed out retirement accounts this year for you and your wife (if you're married?). If yes, then do you want to become a landlord? Can you cash flow a rental with a property manager if you don't want the midnight phone call about a water heater giving up the ghost?

Do you plan on staying in your house for the long term? At 47 we decided we we're staying in this house for the remainder of our lives so we paid off the mortgage.

Stock market goes up and down. Your mortgage will always cost you until you pay it off.