Pay Your Mortgage Off Earlier
Want to pay off your mortgage early? There can be advantages to it. But it’s important to weigh both the pros and cons to determine if it makes sense for you based on your current financial situation and future goals.
Let’s look at some of the top benefits to paying off your mortgage early. Most obviously, it eliminates your monthly payment sooner rather than later. This frees up your money and allows you to put it toward other goals, like retirement. It can also save you thousands of dollars in interest, and it allows you to use the equity in your home should you ever need money down the road. Finally, you’ll also have peace of mind in fully owning your home.
Ways to Pay Off Early
So how can you pay your mortgage off early? There are a few options. You could re-amortize your mortgage by accelerating the terms of your mortgage and increasing your monthly payments, thus paying off your loan faster. You could also make extra mortgage payments every year, either by adding a small amount to each monthly payment or adding in a few full extra payments every year. Make sure these additional funds are put toward your principal (the amount that you borrowed from the lender).
Drawbacks to Paying Off Your Mortgage Early
When you’re using more funds to pay off your mortgage early, you could be missing out on other financial opportunities:
- You might not be saving adequately for future life journeys such as retirement.
- You could be missing out on the chance to pay off higher-interest debt on credit cards or personal of student loans.
- You could be missing the chance to make higher returns on other investments.
- You may be sacrificing contributions to your emergency fund, for those unplanned events like home or auto repairs.
Deciding What’s Best for You
The bottom line: every person’s situation is unique and everyone’s comfort level when it comes to finances is different. That’s why we recommend taking the time to connect with a trusted Kish expert. Together, we’ll take a look at your short-term and long-term financial goals and determine the best possible option for you. It all starts with a simple conversation, and we’re always here to help you on your journey.
Connect with us today by phone or email, or schedule an appointment for your preferred date, time, and Kish location.