I owe $370,000 on my primary residence. I also have inherited my mother's house, which is valued at $60,000. It needs some repairs before I can rent it out. My primary goal is that I would like to pay off my existing mortgage in 10 years. Is there a way to do it?
Not knowing the particulars of your mortgage or entire financial plan, the simple answer to your question is that it depends. According to FPA member, Philip White, CFP®, of Ducere Capital, if you have a new mortgage of $370,000 with a 30-year term, your monthly payment at current interest rates would be about $2,200. "In order to pay this loan down in a 10-year period, you would need to pay an extra $1,900 a month to the loan," he said. "If you can generate this kind of income between the rental house and your personal resources, then you could pay off your existing house in 10 years."
FPA member, Mark Flaherty, CFP®, of Virginia Asset Management, agreed paying off your home in 10 years is a great goal but being able to do so is directly dependent on your cash flow available.
With that said, Flaherty suggested that deciding to pay off your mortgage in the absence of a comprehensive financial plan and the help of a financial planner might be imprudent. "Being able to sit down with a professional who can look at this issue in light of the other financial priorities in your life would be valuable," he said. "You have set great goals, now you need to follow through to make your goals into a plan with which you can live."