You can earn more than a 3% return by investing but if you're highly risk adverse or just trying to prepare for other big upcoming costs in life (like a fancy private school or one of you staying home full time), getting the mortgage off your books may make sense for your family because it really frees up your liquidity.

It's not a stupid move, IMO. It's just not the highest yielding one. You'll quickly accumulate another pile of cash you can invest with when you feel more comfortable doing so. Maybe sign up for a financial basics class.

Let the mortgage be.
Learn how to invest instead-read about munis,ETF's, Reit's and hire an advisor.Your money wasting away...

No, you should not pay down the mortgage. There are two key things for you to understand:

1. You're not just leaving a little bit of money on the table by not investing it. You are leaving huge sums. The compound returns on the investment over years are massive. I understand the idea of wanting to feel secure, but you're not paying a few hundred or a few thousand dollars for that security. You are paying hundreds of thousands or millions of dollars for that security.

2. There is no risk-free way to store your money. If you do not invest your money, you WILL lose most of it to inflation and other factors. You need to stop thinking about investment as taking on risk and not investing as playing it safe. You are exposing yourself to risk either way. Just face that reality and work to build your wealth.

A financial advisor should help you understand both of these concepts.

Anonymous wrote:We paid off our mortgage 5 years into a 15 year @ 3.25%. Best thing we ever did. Kept the same insurance. covers the same as when first purchased.

It's good to know that it's possible to keep your insurance.

We paid off our mortgage 5 years into a 15 year @ 3.25%. Best thing we ever did. Kept the same insurance. covers the same as when first purchased.

Anonymous wrote:

Anonymous wrote:I would pay off the mortgage. Maybe just keep enough of a mortgage to be able to get homeowner's insurance.

You can get homeowners's ins without a mortgage. That is separate.

I seem to remember hearing that the coverage isn't as good w/o the mortgage.

If you're really not going to invest it then yes, might as well pay it off. Doesn't make sense to leave that much in a cash account making less than 1 percent interest.

Anonymous wrote:The financially astute thing to do is to invest the $250K into a mix of index funds. 3% interest is effectively free money.

I agree. I could also pay off our almost $300k mortgage, but instead I've got that money invested in Vanguard index funds and Shcwab ETF funds for future retirement and life expenses, where it has been steadily increasing.

Also OP, is this a house you will stay in for a very long time? Is it in a good neighborhood where the value will be stable or increase? If your answers are no, then don't pay off the mortgage early.

The financially astute thing to do is to invest the $250K into a mix of index funds. 3% interest is effectively free money.

Not a bad idea if you are not financially savvy. I know lots of non-savvy people who lost their asses in the market trying to make money that way.

Then, you can pay yourself every month rather than the mortgage - I would put the money into prepaid tuition plans rather than the 529. Maybe you can roll over the money you have in the 529 into the prepaid tuition plan with MD or VA. I think you can spend the money at any school, doesn't have to be a state school. Check it out.

How have you saved so much money with two kids? What is your income?

Anonymous wrote:We are 35. Two kids. No debt other than mortgage.
House worth 475. mortgage on it 285K. we are doing a 15 year, at 3 percent.
We are maxing out our 401Ks, non-deductible IRAs yearly. we have about 300K in those accounts (evenly split by spouse).
Have maxed out 529 contribution for kids yearly since they were born.
we have good life term insurance coverage, both through work and privately held.

we have about 250K sitting in savings because we are really scared of investing (other that the mutual funds/etfs/index funds we are invested in for our retirement accounts).

Thinking about making a massive payment to our mortgage, and just paying it down fast.

is this dumb, and if so, please explain why?

FWIW, we are the kids of hard working immigrants who fear debt and want to be free.

- completely financially unsavvy person

Since you are risk adverse. I thinkpaying off your mortgage is an excellent idea. It will give you piece of mind. Yes, theroetically you could earn more in the stock market, but that is very volitile and you have to have the stomach for it. You may find that you are less risk adverse once your house is paid in full. Living a no debt life and reducing your actual expesnes can allow you to have more choices in the future, as you won't be chained to it.

We have not paid of out mortgage, but are close. We have fully finded our children' college for in state school expected expenses and max out on IRAs and 401k. BUT, we save elsewhere in a fund we call college/retirement- baed on current calculations 401`k plus IRA may not be en9ugh for fully funded retirement. If our children end up going out of state or to a private school, those funds will be there- however, if they don't we have them for our retirement. We also have 12 months of expenses saved for emergencies- this is what we use for getting a new water heater, furnace, roof..... and then we replenish it over the next year or so.

Good luck.

Anonymous wrote:I would pay off the mortgage. Maybe just keep enough of a mortgage to be able to get homeowner's insurance.

You can get homeowners's ins without a mortgage. That is separate.

ugh stay away from most advisors-- they will eat up all your gains in fees

check out bogleheads and get comfortable for yourselves-- understand the risks of being "too conservative" but don't invest in something just because someone tells you to.

You should buy a million+ dollar house