My mom and I own a rental property. (I’m on the deed, but not the mortgage.) I’ve recently learned that my mom modified the mortgage to lower her payments, but didn’t realize the loan term was extended almost 20 years(!). Loan origination- 2006, loan maturity- 2050.
I’m considering: paying off the loan, paying aggressively toward the principal, or using money to invest (index fund or buy another property).
Here’s where things stand:
Payoff- 119k
Estimated value- 300k
Interest rate- 3.8%
Monthly mortgage payment- 1,200 ($250 principal, $350 interest, $600 escrow)
Net rental income- $1850
Goal: increase long term wealth and reduce (or eliminate) interest.
The hang up for me is the long loan term (50-yr). If it were more traditional (30-yr), this would be a much easier decision.
I appreciate your perspective.
original posted by Jajamoses100 to r/personalfinance on Tue, 12 Mar 2024 23:34:47 GMT.