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adopt a shelter pet · Jan 2, 2008, 07:30 AM

Hello,

Here are my dilemmas. I own a two family home worth $925,000. I have $95K and five years left on this mortgage. This home gives me about $1,200 in income AFTER expenses are paid each month. I don't live in this home. I have $135K in a 401K and approximately $135K in stock. I have $16,000K in the bank. After some renovations on my home this year, I owe about $30K on credit cards (at 0% interest for the next year). I am currently unemployed, but hope to find a job within the month. What do I do with my stock, which I want to sell because I don't want to be piggish... it is at a high right now so it is a great time to sell, but what do I do with that money after the sale? I keep thinking that paying off the mortgage is the best idea... what do you think?

Thanks,

ScottGem · Jan 2, 2008, 07:44 AM

No I don't think paying off the mortgage is a good idea. You would be removing a tax deduction to offset your income, this would wind up adding to your tax liability.

You don't say how old you are or what your retirement plans are. This has a major bearing on any advice I would give. But I would look carefully at your portfolio. I would then get rid of the lower performers and invest that money in fixed income investments (like a CD) that will mature when the interest starts to be applied to your credit cards. At that point I would pay them off.

I would also consider refinancing your mortgage on the investment property. Since you are taking $1200/month in profit, you might want to consider taking some cash out of the equity and investing that some higher yield investments.