Comments on: Mutual funds or Mortgage payment?

By: DvSkV

DvSkV — Sat, 30 Jun 2007 02:08:04 +0000

If your funding situation in terms of paying big bills like a mortgage was tight bec of job or employment, definitely redeeming a mutual fund or selling stocks would be a feasible option to exercise rather than facing foreclosure or ruining your credit history.

With regard to Mutual Funds, since October 2007 the stock market have been sliding and one must be careful and watch their investments where diversification becomes a key, but years down the road times will change and reverse themselves so if you withdraw, many factors come to mind that you should be aware of before executing a redemption and possibly closing your Mutual Fund account:

1. Hopefully you know your actual purchase date and all reinsvestment of shares etc bec you will need this specific information to show on your Schedule D Capital Gains & Losses Form in 2008 for the IRS.

2. More importantly you need to know whether that particular Mutual Fund charges redemption % to cash out etc bec the check you would receive will be the NAV x Shares less Fees.

Hope the Above Info Helps and Best of Luck!

By: michael s

michael s — Wed, 27 Jun 2007 10:32:20 +0000

You did not mention the interest rate on your mortgage.
The long term average gain in the stock market is about 8%.
If your mortgage is less than that, keep the money in the fund but expect a wild roller coaster ride on the value.

By: Krystal F

Krystal F — Sun, 24 Jun 2007 10:16:31 +0000

I’m assuming you have $6,000 invested in mutual funds (not clear from $6.000.00)??? If so, keep that money in the mutual funds and sit tight. Depending on the balance of your mortgage, it is not a lot of money to take out of an investment to pay down mortgage debt. Like one of the other answers said, mortgage interest is tax-deductible, so there is some benefit in maintaining the mortgage.

By: rebajg

rebajg — Fri, 22 Jun 2007 18:06:56 +0000

You might pay a penalty if you’ve only had the mutual fund a short time, maybe 90 days. Otherwise you won’t. I would pay the money on the mortgage. Being out of debt is always good and having your home paid off gives you more security.

By: rhsaunders

rhsaunders — Tue, 19 Jun 2007 06:27:07 +0000

Keep the money invested. It may be that there is a more suitable investment than your present mutual fund, but the interest rate on mortgages is cheap and is tax deductible to boot.