 |
When to Pay Down a Mortgage
When to Pay Down a Mortgage
When to Pay Down a Mortgage - There are times when paying off your mortgage makes good economic sense. But then there are times it doesn't. Watch this video and learn the difference.
Paying down or paying off a mortgage is a dream shared by many. Afterall, who wouldn't want to own their home outright? However, there are often times that it doesn't make economic sense.
The best approach to take when paying down a mortgage is to think of other areas where that money could be used. Paying down credit cards with higher rates or contributing to retirement accounts or other investments that return more than a mortgage costs might be better use of that money. Another thing to keep in mind is the tax shield that mortgage interest provides. When a borrower pays down their mortgage they are, essentially, increasing their yearly income tax bill. Furthermore, it's usually a good idea to not paydown a mortgage more than is necessary.