Mortgage rates are at an all time low and fixed mortgage rates seem to be the deal of the century. So why would anyone want to pay off your mortgage?
Here are 5 reasons why paying off your mortgage is still worth it. Let’s begin.
A Mortgage Is Always An Added Cost
Interest will always be charged on a mortgage and will be an added cost. It doesn’t make sense to continue making payments just to pay interest. It is really only a great deal for the bank if you keep your mortgage for it’s full term. See what you can do to try and pay off your mortgage faster.
Security When There’s Income Loss
If your home is paid off and you either get a demotion or job loss, you don’t have to worry about how you’re going to pay your mortgage. Most home loans are for 30 years but no job is guaranteed for 30 years. Normally, if you miss up to 3 or 4 mortgage payments, the bank could take back the home even if the homeowner has been paying it on time for years. This is an additional stress you don’t have to worry about if your home is paid off. Security is most important when considering mortgage payoff.
Extra Cash Flow
A main reason why people don’t pay off their mortgage is because the extra money you put in, you don’t see as cash that you can take out. But once the mortgage is fully paid off, you can free up the amount of money used to send to the bank. This money can be saved or spent on other things to your liking.
Debt is Bad When There’s Deflation
Mortgage rates are near a historic low right now but this doesn’t mean deflation isn’t a possibility. It’s typically better to have a paid off mortgage or be a renter in the time of deflation. The stock market has had long terms of zero or negative growth, unless you have a guaranteed investment that pays more than your mortgage rate, then it’s best to get rid of that debt once and for all. Once you are free from a mortgage, you will truly be a homeowner.
Yes, there are ways to release home equity even when your home isn’t paid off but when your home is completely paid off, you can take out the greatest amount of equity. Home equity lines are normally cheaper than credit cards and car interest rates. It usually costs some money to release equity on your home. Think of home equity as an emergency fund that should only be taken out when absolutely necessary.
With all of this being said, it can be difficult to pay off your mortgage faster. Take the necessary steps into a debt free future and budget yourself accordingly. Paying off your home has countless benefits and you should look forward to being debt free. If you’re looking for any tips on how to pay off your mortgage faster, send us a message and we’d be more than happy to provide you with a personal pay-off plan! Be sure to follow us on Instagram for daily real estate tips.