The Mortgage Payoff Dilemma

We have a little over $10k left on our mortgage. We had to get a large mortgage when we moved here last year because we still owned our house in Florida, but got a great rate on it - 2.75% (5 year ARM since we were going to pay it off before five years). When the house sold there a month later, we took almost all of the proceeds to put against the mortgage here, taking the balance from north of $205K to where we are now. We do have the money saved in a credit union to pay it off, but as I said in the other post that we wanted to keep some out just in case we need a down payment on a new car for my wife.

I am starting to rethink that. I am leaning towards now paying it off. We'd take our savings from a little over $17,500 down to $7500, but it would decrease our monthly mortgage costs by $850, while self-escrowing the taxes and insurance. Saving it back up would take a year or so at the same rate. However, in the case that we need a car, we would have more flexibility. We also would use up all of our savings in that scenario, leaving us a bit vulnerable should the worst happen. Or we would put much less down on a car, that might work too.  It's a risk, but writing it out like this shows me that maybe it isn't quite the risk I thought it was at first.

We have a few other things we want to do around the house that we need to save up for - closet organizers, adding on to the deck, swing and chairs for the front porch, swing for the back yard, upgrading our DVR to Tablo TV, buying a soundbar, and saving up for a family vacation just to name a few.

Will let you know what we decide! March on!