- The Wisdom Journal - http://www.thewisdomjournal.com/Blog -
Should You Pay Off Your Mortgage Early?
Posted By Matt Polo On March 14, 2011 @ 3:15 AM In Mortgages,Personal Finance,Real Estate | Comments Disabled
With so many people walking away from their mortgage, it may seem odd to discuss paying it off earlier than required. However, there are great reasons to stay on the side of responsibility, repay your debt, and even pay your mortgage off early.
Many financial advisors have unique positions on why a mortgage should be the last debt repaid within the life of the family. Some will recommend that all debts with higher interest rates should be repaid first although few will encourage the mortgagee to delay saving for retirement prior to repaying the house because of the need for a place of residence in the event of a loss of income. Family needs must be met while making additional mortgage payments each year, but steady progress can be made by simply paying one extra payment on the mortgage  every year. As more money can be paid against the principal, faster progress is made. Many factors play into the decision to repay a mortgage  early, but when the decision is made and a strategy is developed the homeowner will have reached a major milestone in life.
When the entire mortgage  has been paid in full, homeownership takes on a new meaning as those living in a home that is personally owned without any obligation to a financial institution feel a sense of security in their family. Improvements made to the home become investments in the future. Never having to make another mortgage  payment removes the sense of simply paying rent and never making progress toward the final goal of repaying the note. When a change in monthly income occurs, the one known fact is that the family has a place to live without fear of loss or displacement.
Interest payments are included in the overall repayment total to the bank. When the mortgage  debt is repaid early, less interest is paid on the mortgage and the overall cost of homeownership is lower. While calculating the entire cost of the house is not a common practice, homeowners who strive to repay the mortgage early can often point to the exact amount of money saved as a great relief to the family budget.