A lot of financial experts question the wisdom of paying off a mortgage early. I asked myself a few key questions in order to determine whether I'd benefit from paying down my mortgage.
We bought our home for about $183,000 in 2005 and we now owe $111,000. My goal is to wipe out our entire mortgage balance as soon as possible.
According to one study, the more you think about something, the more rational your actions. People who are thoughtful about their spending save money, for example. For me, the rational decision is to be completely mortgage free.
I'd like to quit working full-time
I know that it will be easier to quit my full-time job if we no longer have a mortgage. I'm committed to keeping a full-time job in order to pay off our mortgage balance as quickly as possible. I asked myself how many more years I can tolerate working my full-time job. The answer I came up with was 7 more years. Based on that, I figured out we would have to pay an extra $500 a month on our mortgage.
I can still save enough for retirement
Some people claim you can get a better return on your money if you invest it rather than pay down the mortgage. However, I can still save 15 percent on my income toward retirement and also pay down my mortgage. I ask myself whether I would rather risk my extra money in the stock market or own my home outright in just 7 more years. I prefer the comfort of owning my home.
I don't want to be a renter or landlord
Some people choose not to pay off their mortgage even during a difficult housing market. I heard an advertisement for a new home construction company that says that people who buy homes from them don't need to sell their old houses. The company will provide management services to lease their house when they move into their new homes. That's better than being your own landlord, but I don't want to deal with "investment properties." I also don't want to have to be in the position to rent from other people. With rents as high as they are right now, I couldn't afford to rent my own home at the going rates.
I'm not getting a tax advantage
People are always saying how you can deduct the interest from your mortgage on your taxes. However, ever since I've become a homeowner I have never seen my accountant itemize my deductions. We always take a standard deduction. And, in that situation, there is no benefit to having paid mortgage interest.
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