First Person: Should I Really Be Trying to Pay Down My Mortgage?

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Ever since I started aggressively paying down my mortgage about 5 years ago, I've heard numerous arguments for why it's foolish to do so. Although I agree that I need to have money in an emergency account, I still feel that sending my mortgage company extra money every month is a better use of my extra funds. If I had purchased my home at the age of 20 or 25, perhaps I could have taken my time to pay down my mortgage. However, my husband and I bought our home when we were in our mid-30s.

Still, I'm willing to think about the different arguments for not paying down my mortgage faster.

It's better to pay off credit cards

According to an article by the Associated Press, with mortgage interest rates reaching a historic low, it makes more financial sense to pay off higher interest credit cards rather than paying down a mortgage. One of the reasons I delayed paying extra on my mortgage is because I had a few credit cards I needed to pay off. However, now that I'm free of credit card debt, it makes sense to tackle my other consumer debt.

It's better to save for retirement

If I didn't have any money saved for retirement, I'd be aggressively putting money in my 401(k) rather than paying down my mortgage faster. However, as long as I'm on track with my retirement savings goals, I rather work on my goal of being mortgage free. After saving 10 percent of my income toward retirement, I use my extra money for other goals. I won't need to have as much money saved for retirement if I have no mortgage payment to make.

It's better to get the tax breaks

I often hear that it's better to have a mortgage in order to receive tax breaks. It's true the federal government allows people to deduct their mortgage interest from their income if they itemize their deductions. However, people such as me who take the standard deduction receive absolutely no tax benefit from having a mortgage.

It's better to invest in the stock market

Financial experts say once a person has built up an emergency fund, saved for retirement and for their children's college, they may consider paying down their mortgage. But even then many argue that people could get a better return on their money by investing in stocks. In my case, our mortgage interest rate is 4.624 percent. I would rather have a home that I own without any mortgage payment rather than invest in a stock market that could deliver negative returns.

My husband and I hope to be able to retire in our current home in another 25 to 30 years. It's nice to know that we will have the option, though, to retire earlier simply because we paid off our mortgage earlier than required. Financial experts say that paying off a mortgage early is usually an emotional decision rather than a financial decision. In my mind, it's important to consider the emotional side of money situation before making a decision. I'm extremely happy that we made the choice to accelerate our mortgage payoff. We should be free of a mortgage in another 7 or 8 years, God willing.

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