Five Reasons Why You Should Pay Off Your Mortgage Early
When carrying a mortgage, one will have a valuable tax-saving advantage. However, most homeowners would prefer to pay off their loan and not have any debt. Here are five reasons why one should pay off their mortgage early.
Forced
Most people want to save money but do not have the willpower. When this happens, a person will usually make their required loan payments and spend the rest of their money on entertainment or traveling. On the other hand, when paying the mortgage down, one will make an investment in their future. While some experts recommend a person not pay down their mortgage, it is unrealistic to think people will save money on their own.
Relax
When paying off a large loan, one will have peace of mind. Without a doubt, a mortgage is the biggest loan most people will carry in their life. When this is gone, a homeowner can sit back and live a relaxed and peaceful life.
Aggressive
Once a homeowner pays off their home loan, he or she can aggressively save for retirement. When one no longer has a mortgage payment, they can stash away at least a thousand dollars a month in their 401k and IRA. This is an excellent option for a working person who still has a decade or two until they retire.
Take money out
Now, some fear that they will pay off their home only to need funds in the future. Fortunately, a paid off home is a perfect piece of collateral. When a customer heads to a bank or lending institution, he or she can, with ease, obtain a loan against the house. This is a perfect option for someone who wants to borrow money to improve their home or buy a vacation property. Without a doubt, a veteran can find a veteran VA streamline if they want to borrow money at a low-cost.
Gains
When paying on a loan, one will usually pay between three and five percent interest. While this is not a lot of money, it will add up over time. In fact, when paying off the loan, one will essentially have a five percent return on their investment with no risk. This is perfect for someone who is jaded by the stock market and saw their investment dollars dwindle.
Whether carrying a VA streamline loan or a normal loan, one should consider paying off their balance early. Without a doubt, there are plenty of benefits to being debt free.
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Category: Mortgage
