I find myself in agreement with both Dave Vedder and Theking--Is that possible?


I agree with the Theking that as a society we have become spoiled by the drive-through mentality that wants everything yesterday, and from a striclty financial viewpoint buying toys with home equity doesn't look good on paper.

I also agree with Dave when he suggested that as we get older most of us will spend more time regretting what we did NOT do than regretting what we did.


I think there is a way Fishtman can have his cake and eat it too.


Fishtman mentioned in his post that his interest rate on his mortgage was 5.875%. Assuming that your getting the $50,000 in cash out equity on your 1st mortgage and not on a 2nd you'll be be paying an addtional $295.77 a month for the next 30 years. That amounts to $106,476.80 of which over $56,000 is interest on the 50K in toys that will only depreciate in value.

I don't know the specifics of his loan(s). But if we assume for example sake that $300,000 fixed @ 5.875% for 30 years would pay off his original 1st mortgage and give him $50,000 cash out for toys at time of closing his principal & interest payment would be $1,774.61 a month.

If he paid an addtional $60 above and beyond the required $1,774.61 (making a payment of $1,834.62) the $60 would apply directly towards principal of the loan and there by pay off his mortgage in 27.51 years as opposed to 30 (assuming he's not in a pre-payment penalty loan).

By shortening the life of his loan--the two and a half years of interest $avings would amount to $53,238.40 (P&I of $1,774.61 x12 months X 2.5 years). That would basically negate the cost of interest to borrow 50K for toys.

That way, for just an extra $60 a month Fishtman can enjoy his dream toys now guilt free and eat his cake too.





P.S.-As an ex-smoker who's never been accused of keeping my opinions to myself--I would urge you to quit smoking and apply the money you'ld spend on "smokes" towards your mortgage as well. That way you'll not only pay off your mortgage much quicker ($aving thousand$)-- more importantly, when it's paid off you'll be alive for several more years to focus on fishing full-time without having to worry about a mortgage or all the health problems associated with smoking. Just my 2 cents.