What is best pay my mortgage or invest ? I have 50,000 from a life insurance and my mortgage is 90,000.?

I just got a 50k on life insurance, my mortgage is 90k. I would like to put the 50k in my mortgage so I can be debt free quicker, however I would like to explore other/new posibilitiesWhat is best pay my mortgage or invest ? I have 50,000 from a life insurance and my mortgage is 90,000.?
Since you are looking at reducing a mortgage or investing, I assume your home loan is either the only loan you have or it has the highest interest rate. If this is untrue, then the choices should be paying the highest interest loans or investing.





The smart move is to invest only if the net earnings from the investment would be higher than the interest you pay on your loans. A proper analysis would consider the present value and future value of the investments and mortgage.What is best pay my mortgage or invest ? I have 50,000 from a life insurance and my mortgage is 90,000.?
Can you itemize deductions? Interest on a mortgage counts toward this. You need to compare the amount of interest paid on your mortgage vs. the amount you could possibly earn from an investment.





Always check to see if you refinanced -- would it be possible at the present point to get a lower interest rate on the loan. What would refinancing cost you?





What would you do with the money if you did not pay off loan? Just a savings account would not make it. (Inflation is always a factor). What is your risk tolerance?





The American dream of paying off the house is not always the best plan. If you feel you can make the money work better in an investment and utilitze the tax deduction for the mortgage interest - go for the investment.
I wouldn't do that if I were you. If you have any other debts, pay them off first. If you are driving a clunker, perhaps buy a new, more reliable car. You can get something very nice that is brand new for 12-15k. Then, put 3-6 months worth of expense into a high yield savings account for emergencies, and the rest can be put into your mortgage or into mutual funds or stocks. Your house is a great tax shelter. The quicker you pay it off the sooner you lose that benefit.
it depends on your potential investment returns. if your investment returns after tax exceed the interest rate on your mortgage then its best to invest.
Remember, not all debt is bad.





This will take some serious number crunching.





You can get a solid 5% on your $50K but you have to pay income tax...so the 5% is really 3.6%





If you pay a mortgage at 6%, since you can deduct that interest the real rate is 4.32%





Now for the fun part...leverage...





You control the total value of your house with only a percentage invested.





Lets say you have a $150K house and owe $125K on it. That means you own $25K





If that house appreciates to $130K, you made $5K, not bad on a $125k house...but its pretty awesome on a $25K investment.





My advice...investigate the current mortgage interest rates. Maybe refinance, put 35% in an overseas mutual fund, 30% in an index fund and the rest in e-trade's 5% complete savings.
All we can do is speak in terms of probabilities. You are probably better off investing the funds (or paying off any non-mortgage debt), once you've factored in likely returns on investment and the mortgage-interest deduction.





That would also likely be the fastest way to become debt free -- in the future you could use your investment gains to pay off the remaining mortgage.





But if you hate the idea of owing on your house, or you fear the risk of things going bad and you somehow becoming unable to pay the mortgage and losing your house, well you have to consider your own emotions and attitudes and risk tolerance.





Investing always involves some risk, whereas paying down your mortgage is a guaranteed risk-free means of increasing your net worth by that amount.
You should look at your total situation before deciding: savings on hand, other debt, etc. I would pay off other debt, if you have any, before paying down a mortgage.
1ST Sorry for your loss. 2nd You haven't given enough information for anyone to make a sound answer for you. Or really a sound suggestion for that matter. It not only depends on your own finical situation but as well as who you are as a person. E.G Money burns a hole in your pocket.


Personal opinion: Do what saves you the most money.


If your house interest is 6.5% and you can invest for 9% and can afford the house payments by your self, then invest. Use the Interest you get to pay off the house So there is no more worries about house payments and you have money still invested after. Best of luck to you
I'd clear up any other debts first. I'd put $10K in a money market fund (better interest, but still liquid) in case of emergency. If you need repairs around the house, medical, etc. get that done ASAP. IF you know how to invest and are good at it, maybe take a bit more. If you put about $25-35K down even, that would really reduce the mortgage, BUT


make sure you have no pre-payment penalty or that could bite you.





I WOULD put what's left down (make sure to cut a special check marked ';principle only';) and this is why I don't buy the tax deduction argument. First, it's chicken feed, esp. if all you have is a $90K mortgage. Second, you will have equity you could borrow against if, God forbid, you should have an emergency. Third, it's great to NOT owe a mortgage and all that money you will save off that can be put into another investment. Fourth, right now markets and everything are WEIRD and unless you're really good at investing, it's probably a good time to sit out UNLESS we're talking about an IRA. You WILL be saving money in the long-run.


BTW, my distate for mortgages is shared by Elizabeth Warren in All Your Worth and her specialty is bankruptcy law, which she teaches at Harvard. Not ALL financially savvy people advocate keeping a mortgage.


And my condolences on your loss of a loved one.