To Pay or Not to Pay??What Would You Do???

**many houseapes** · 11-09-2009, 08:28 AM

I really need everyone's input

.....We have about $62,000 left on our house and we would really like to get it paid off (even though we don't like where its at.....more of a housing security thing).
In the midst of this economy, we are faced with 2 options....#1. plunk down every extra dollar we have to pay down the house....or #2. keep up with the regular house payments and squirrel the extra money away in case dh loses his job. The company has been constantly "restructuring" for the last year & some have lost their positions. I want to go with option #2....but I also want to make sure that if dh ever loses his job, I would like to not have to worry about making a house payment every month. What would you do??Thanks

**Inkstain82** · 11-09-2009, 08:34 AM

I guess that just depends on how many months you could get by without his job with what you'd have left over after paying off the house (including any leftover cash and unemployment benefits.)

**Russ** · 11-09-2009, 08:40 AM

Set a certain amount... say 6 months of living expenses THEN pay off the house.

**nodmicks** · 11-09-2009, 09:25 AM

Originally Posted by rcannon

Set a certain amount... say 6 months of living expenses THEN pay off the house.

I definitely would opt for a fat EF first. You just never know. Dh would like to wipe out our mortgage too. However I want a 9 month EF first after experiencing a layoff last winter. I also know too many people in our area who have been unemployed for over a year or ended up taking jobs kids usually take because unemployment is all gone.

Do you work outside the home? I work about 15 hours a week outside the home. We consider that a safeguard if that makes any sense. Our reasoning is if things got bad enough since we are used to living primarily on one income I could always pick up another job in an emergency.

**ktsmama** · 11-09-2009, 09:55 AM

Originally Posted by rcannon

Set a certain amount... say 6 months of living expenses THEN pay off the house.

I like Russ's idea. Good luck on whatever you choose.

**Greebo** · 11-09-2009, 10:15 AM

I'd set aside 3-6 months of expenses regardless of DH employment status.

What are the odds, in your opinion, of DH losing his job?

**my4littlebuffaloes** · 11-09-2009, 06:59 PM

Realistically though, how quickly could you pay off the house? If you put everything towards it how many years would it take? I think I would stash everything in an EF until you feel secure in your employment and the economy improves. Then, you can pull a chunk to pay down the mortgage. Paying down the principal of your mortgage will not mean you can skip a payment if your dh loses his job. Paying your mortgage ahead will delay when the next payment is due, but will not financially benefit you in any way. Good luck!

**frugalfranny** · 11-09-2009, 07:23 PM

Originally Posted by my4littlebuffaloes

Realistically though, how quickly could you pay off the house? If you put everything towards it how many years would it take? I think I would stash everything in an EF until you feel secure in your employment and the economy improves. Then, you can pull a chunk to pay down the mortgage. Paying down the principal of your mortgage will not mean you can skip a payment if your dh loses his job. Paying your mortgage ahead will delay when the next payment is due, but will not financially benefit you in any way. Good luck!

Good point made here.........and in this economy, with the prior restructuring of his co. then DEFINITELY a larger EF......minimum of 6 months. Then if the layoff doesn't happen......and the economy improves, you can always do it later.

**frugalwarrior** · 11-09-2009, 08:17 PM

I definately vote for bigger EF. Liquid cash is important. How much would you even save paying it off early. (crown financial.com)

**many houseapes** · 11-09-2009, 08:45 PM

Originally Posted by Greebo

I'd set aside 3-6 months of expenses regardless of DH employment status.

What are the odds, in your opinion, of DH losing his job?

Well, the company has been restructuring off & on for a year...some people have been let go at a moments notice...some have been demoted....some regions have been combined (like dh's region)...the company sent everyone an email that they are going to raise our insurance rates ( no likelihood of a raise)...& jumping on everyone for any little thing such as the use of commas & semi-colons in their email - which I think is really a stupid thing to nitpick about. Dh has worked for other companies.....its great for the first few years...then the higher-ups seem to follow the same path - they screw with the insurance,they screw around about raises, they screw around with employee's nerves - then they screw the employees-*poof* employee is gone.
I honestly don't think that his job is in jeopardy b/c they have added more sites to his area and it's now a one man territory. We have faced unemployment more than once...the last time was 4 yrs ago when we were expecting #10 - that was a very scary time & its still too fresh in our minds. Its just that the way that this company is acting now has us spooked.