Posted: 5/27/2009 1:39:16 PM EDT
| So some are predicting hyperinflation. I owe about $20K on my house. I will have enough cash to pay it off next month. If super high interest rates are in the wings would I be better off paying off the house or waitng to see if interest rates go sky high then put the $ in a savings account? I have about 6 years to go on my mortgage. Rate is 6.7% |
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Quoted:
So some are predicting hyperinflation. I owe about $20K on my house. I will have enough cash to pay it off next month. If super high interest rates are in the wings would I be better off paying off the house or waitng to see if interest rates go sky high then put the $ in a savings account? I have about 6 years to go on my mortgage. Rate is 6.7% pay it off now... you will need every cent to fill up the car, buy food and clothing... plus you will save by not paying the interest... |
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If we have hyperinflation, you would be better off with the debt, as long as it is fixed-rate. In fact, you should've refi'd a couple of months ago to take out all of your equity that you could, and to use the money to buy other assets that would retain value.
If we have deflation, it won't matter because you'll still have your cash. At this point most of your payment is principal anyway, and if we start to see serious deflation you can just pay it off at that point. |
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Personally I don't see hyper-inflation. In the last couple years, due to stock market and home value losses, it would take major spending to put all that cash back into the economy. Even more than Obama is spending.
I would sit on the money, especially if you have any fears of losing your job. |
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Quoted:
If we have hyperinflation, you would be better off with the debt, as long as it is fixed-rate. In fact, you should've refi'd a couple of months ago to take out all of your equity that you could, and to use the money to buy other assets that would retain value. If we have deflation, it won't matter because you'll still have your cash. At this point most of your payment is principal anyway, and if we start to see serious deflation you can just pay it off at that point. This |
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Quoted:
If we have hyperinflation, you would be better off with the debt, as long as it is fixed-rate. In fact, you should've refi'd a couple of months ago to take out all of your equity that you could, and to use the money to buy other assets that would retain value. If we have deflation, it won't matter because you'll still have your cash. At this point most of your payment is principal anyway, and if we start to see serious deflation you can just pay it off at that point. This is the best advise in this thread. 
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Quoted:
Personally I don't see hyper-inflation. In the last couple years, due to stock market and home value losses, it would take major spending to put all that cash back into the economy. Even more than Obama is spending. I would sit on the money, especially if you have any fears of losing your job. That's depend on how the economy will behave in the next few months. Both views depression and hyper-inflation have valid points. What we might get is depression fellow by hyper inflation. Keep in mind that the US bond market is in the process of dislocation. What you want is to hedge your bets. Buy gold and have hard cash. |
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Quoted: +1Pay it off. If the SHTF, if you own your house free and clear, they can't take it away from you. Well, unless you don't pay taxes for a couple of years, I guess... Hyper inflation is very likely and technically it would favor the debtors. But don't count on the banks missing out on collecting their debts in a revised currency, or some other means of balancing their books. Look how the banks dictated financial policy to Bush and Obama. Better to clear the debt and not give the banks any chance to change the rules or terms of the mortgage, or even the currency on you. In turbulent times it is best to have as few encumbrances as possible. |
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Quoted:
If we have hyperinflation, you would be better off with the debt, as long as it is fixed-rate. In fact, you should've refi'd a couple of months ago to take out all of your equity that you could, and to use the money to buy other assets that would retain value. If we have deflation, it won't matter because you'll still have your cash. At this point most of your payment is principal anyway, and if we start to see serious deflation you can just pay it off at that point. Exactly. |