I have $50K free cash and remaining mortgage balance of $97,000 - should I pay down mortgage?


You should work this one with your lender. At the end of your mortgage term, may be you should pay down mortgage and be closer to clearing mortgage debt - that's the standard thinking and if your lender doesn't charge prepayment penalty in that particular case, off you go.

Q: Should I pay down mortgage in general, especially when I have a lot of equity?

A: Not always.

In general, if you are young there is no point paying down mortgage on accelerated terms. The bank won't remember the times when you made advances on the mortgage but if you fall short on cash, they will not even remember it. If you have $50k free cash, it might be better to invest it some place else (say, retirement fund) if the return is higher than your mortgage loan rate return.

If you're financially stable, you may like to keep a diversified portfolio of investments. Mortgage can be one of them. You may consider investing part of your cash into your mortgage, and the rest could be invested in stock and bonds and retirement funds. Using professional financial advice might help take the best decision.

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