If you have a home mortgage you’ve probably thought about how things would be like if you were to pay it off and be free from the monthly payment hanging over your head each and every month. However their are times when you should and should not pursue this option, and this article I’m going to cover 3 reasons when you should.
When You Have No Other Debts
First off, if you have all of your debts paid off then paying off your mortgage would only be the next logical step. This means you have no other high interest debts such as credit cards, personal loans, or even a car loan. The reason you’ll have these debts paid off first is because they will usually carry much higher interest rates. On top of that mortgages also carry some special tax treatment. In fact any interest you pay on your loan will be tax deductible in most cases whereas no other debts get this special privilege.
When You Are At The Beginning Of Your Loan
The second reason you should consider whether to pay off your mortgage early is if you are in the first 10 years of a 30 year fixed mortgage. The reason this is the best time to pay extra money towards your mortgage is because it’s in the first 10 years of a 30 year fixed mortgage when you’ll pay the most interest, and it’s also the time you could save the most money and pay your mortgage down a lot faster. So if you have the extra cash this could be the perfect time to pay down that mortgage early before you get hit with all the extra interest payments.
When You Are Retired
Finally, the last reason you need to consider paying off your home mortgage early is when your retired. The truth is most retired people are having to live on less and less these days. In fact with social security in a tailspin and government spending out of control the only chance you have to getting a good retirement is to pay off all of your debts so you don’t burden your golden years. On top of that as a retired person you’re more likely to pay higher taxes since you don’t have a 401k retirement plan to contribute to or any dependent children at home anymore to help lower your tax burden.
In the end if you fit these three different situations you may want to consider a plan on how to pay off a 30 year fixed mortgage in 5 to 10 years as your best option to paying the least amount of interest and saving you the most money overall. So get started today towards a life without a mortgage now.
- Getting the Best Mortgage Quotes (debt-consolidation-2u.com)
- IRA Investing and Mortgage (2008taxes.org)