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Need Advice from Financial Experts!

by Undercovercash
5 replies
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Hey Everyone

I am in the very cool situation that I have built a pretty large passive income over the last 1½ years and now have a wad of cash just lying around.

I bought a house 3 years ago and the mortgage for this is 8% Interest.

It runs over 10 years before it is paid with the monthly payments I am currently making and for the first couple of years I am basically just paying all the interest rates.

This is obviously costing me money. I have enough cash right now to pay off the whole thing, but that would take away most of my savings. My question is, how clever is it to use all of my cash to get rid of this mortgage?

Would it be better to maybe just pay half and then save half of my cash for reinvestments into my business?

Any feedback from people with experience is appreciated!
  • Profile picture of the author derekwong28
    Your interest rate is quite high at 8%. I wonder if you can renegotiate that? At that rate, it will be tempting pay off at least part of the mortgage since there aren't many investments that can return over 8% a year that are relatively. Since my mortgage rate is only 2.5% in Hong Kong, I can use my savings to invest in stocks that yield 4% a year. Still, I have paid a good bit of my mortgage since i am very allergic to debt.
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    • Profile picture of the author Undercovercash
      Hey Derek

      Yes at 8 % it is very high. Rules are like this in the country where I bought this house, where 80% of your loan is a low rate one from the bank and 20% comes from a higher rate from a private source.

      My loan from the bank has a interest rate of 3.5%. But it is this private mortgage loan that I want to get rid of because it is at 8%. There is no option for me to renegotiate currently as I live in a sort of grey zone area because I am not registered in any countries and don't stay in any countries for more than 180 days out of a year.
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  • Profile picture of the author yukon
    Banned
    If it was me, I would pay the house off ASAP!

    I paid off my house & cars a couple of years ago, I will never go back to making monthly payments on anything.

    The freedom of not having to make payments each month is awesome!
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  • Profile picture of the author Undercovercash
    Its worth around 20-40.000 $ more than I paid for it because I bought it at the exactly right time. I don't live there (have rented it out) and therefore if I pay this 8% mortgage it will pretty much pay of itself.
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