Should you pay off your mortgage early? Does it actually make sense? It’s a very worthy question to ask and this article will help you answer that question for yourself.
Aside from thinking about whether to pay off your mortgage early or not, perhaps, you’ve also been considering about growing your wealth in the future. If that’s the case, just keep on reading. What this article can do to help you is go through a series of questions that you can ask yourself so that you can make a better assessment for your situation and make the decision for yourself.
Think about your future, not just one year or two to five years, but so much further into the future. Set a time of about twenty years because that’s probably how long it is going to take you to pay off your home loan if you’re not going to pay it off earlier. What are the benefits of paying off your mortgage early? Whether you’re just about to buy your first home or you’re already in your first home, paying off the mortgage is one of the smartest things you can do for yourself.
Owning your own home and paying off that first.
First of all, the amount of interest you’re paying each month is huge. If you didn’t have a mortgage, you’ll have so much more cash left in your pocket at the end of the month. Secondly, when you look at all the amount of interest you’ve been paying for the life of the loan, it adds up to be a huge amount of money.
Well, you’re going to have no grant and no mortgage to pay when you’ve paid off your mortgage early, which is going to be great. It’s going to mean that your expenses will decrease because you paid off your mortgage and you don’t need to pay it anymore. You’ve got security because the bank no longer owns your home, you do. If interest rates go up, you don’t care. It doesn’t matter to you because you now you own your home.
Paying off your mortgage early has its benefits and drawbacks. So, your expenses were lowered and you have security, but you have no income. Your home is not going to generate you an income because you’re living in it. You would actually have to rent it out and move. It may also go up in value, but the question is to whether that increase in value is actually accessible to you. You can certainly sell it to access it, but you have to buy somewhere else to live. You would probably pay the same amount of money because the whole market would have gone up.
So, it does actually make sense. Pay your property off as early as possible and then you can start looking at other investments opportunities if you want to generate income and grow your wealth. So that when it’s time to retire, you’ve actually got things working for you rather than just a house that you don’t have a mortgage on anymore.
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