Another 'what to do with lump sum' question
We have a HELOC balance of about $55k at a rate of prime + 0 (so 8.25% right now). That makes the monthly interest amount around $380. We have been paying $750/month toward that loan, which will pay it off in about 9 years. We are going to get a lump sum of about $20,000 from selling something we own. Would it be better to put the entire amount toward the HELOC or to invest it (we were thinking of adding to our Roth IRAs, which we haven't been able to do the past 2 years, and then topping up our emergency fund by putting the rest into a 12-month CD)? I'm inclined toward the latter, with the thought that lowering the HELOC balance won't make that much difference. Yes, I know that it will cost about $14,000 in interest over the 9 years, but that's all tax deductible. It would somehow just feel better to have cash available.
My other thought is that if we could pay off the HELOC outright, it would be worth it, but because this amount of money wouldn't even cut it in half, it's not really worth it. Does that make sense?
Our primary mortgage, BTW, will be paid off in 12 years, before we are even at retirement age, if we continue without making any changes. We don't have any other debts.
Is there anything I'm not taking into consideration? Thanks for any comments.