Many homeowners pay their mortgage month after month without a thought. Little do they know that if they put just a little extra effort to pay off their mortgage early they would reap enormous benefits. The reasons to pay off your mortgage early are both financial and emotional but they are all worth while. So forget what you have heard about a mortgage being “good debt”. Find out why getting rid of our mortgage is the better option.
It Saves Interest
Let us pretend that you have a $100,000, 30 year home loan at 6% interest.. If you continued to live in that home and never paid any extra on your mortgage for the full 30 years, you will have paid $251,722 for your home. That is $151,722 in interest alone. If you had worked hard and paid that same mortgage off in 15 years, you would have kept $35,884 in your pocket. That is only $245 extra paid toward your mortgage every month. So why waste all of that money on interest?
Reduces Expenses During Retirement
If you are able to get your mortgage paid off before it is time for you to retire, the money that you have saved for retirement will go much farther. Since housing costs is typically the biggest expense in a household budget, that is a significant amount of money that can be used for other things you may want to do. Not to mention that when money is tight, you will never have to worry about someone kicking you out of your home.
Minimizes Risk if Selling is Needed
Even when life happens and you need to move before your mortgage is paid off, there is still a benefit for you. The amount of money that you paid toward the principle on your mortgage will make it less likely that you will be upside down when it comes time to sell. This means less financial risk when you need to move because of a change of jobs or life circumstances.
Gives Some Security
Once your mortgage has been paid off and you are the only holder of the deed for your home, you have the benefit of security. You will never have to worry about being foreclosed on if you lose your job. You will always have a place to lay your head at night and call your own. This security is something that cannot be financially measured but it is a feeling that is well worth the effort.
Still not sure if paying off your mortgage early is worth it? Start running your mortgage information into an early payoff calculator that you can find online. After seeing how much you can save over the lifetime of your loan, think about how good it would feel to own your home free and clear. Now start finding money that you can put toward your mortgage every month. Every dollar that you pay will get you closer to paying your mortgage off early.