Home and Auto

Ugh. Another week of not posting. Work is the devil.

I have a dilemma that I'm sure a lot of people would love to have. I have been saving money of late in the hopes of buying a new car. My current car is from 2007 and has almost 160,000 miles on it. Granted, that's not bad, but I'd enjoy getting a new car before I have to start putting money into this one. I have the money right now to buy the new car outright if I want.

However, the other day, I got my mortgage statement for my house. The amount I owe on the house is pretty much the same as the new car. Back in 2001, I changed my 30-year mortgage to a 15-year and have steadily paid it down, so I have a little over a year left on it.

So, the choice is do I buy the new car or pay off the mortgage with the saved money? There are pros and cons to each.

If I buy the car, the status quo of the household budget won't change significantly. I have a newer vehicle with more bells and whistles and the mortgage payment stays the same. I still get to take off what mortgage interest I'm paying on my taxes, which means a bigger return in the spring.

If I pay off the house, the mortgage payment disappears. So I can finance a new car at that point, the monthly payment being less than the mortgage payment, so I come out a few bucks ahead and can save the difference. When it comes time for taxes, I won't have the mortgage interest to itemize, so my return will be significantly less.

Either way would be great, but I'm terrible at deciding when it comes to these sorts of things.

What do you think?