Paying off the mortgage is the day that all homeowner’s wait for. Mortgage terms feel as though they will last a lifetime. There is no other loan that takes as long to pay off. Paying off your mortgage early has many benefits that homeowner’s can look forward to. It is said that there are many disadvantages to an early pay-off, however the advantages tend to outweigh them.
Why pay off your Mortgage Early
Debt Free Living- Paying off the mortgage early leads to a debt free lifestyle that takes the cumbersome payment out of the equation. Living without a mortgage is one of the most financially freeing moves that you can make. The money that was previously spent on the mortgage payment can go to other things such as renovations, a long awaited vacation or extra money in a retirement savings account.
Less Money Paid in Interest- When the mortgage is paid off early, you pay less on the interest charges. Some lending institutions frown upon an early pay off and charge a penalty to those who choose to do so. Be sure to check your mortgage to find out what the penalties are prior to paying the home off. There is a good chance that paying off the loan early will still result in great savings. Determine if the interest rate paid over time would add up to as much as the penalty. If they are the same or the paying the penalty would be more, it is beneficial to pay off the mortgage early.
Economics- It will not be nearly as devastating to homeowners if the economy takes another turn downward. Although losing a job will still be difficult to handle, the fear of losing your home does not come into play. That is the type of security that you cannot get any other way. This is one of the greatest advantages of paying off the home loan early.
Circumstances may not allow you to pay the home off as early as you would like. Circumstances sometimes change which allow some homeowners to do so. When it is possible, an early pay-off is one of the most intelligent choices that a homeowner can make. The only time that a homeowner should not consider paying the home off early is if it will cost more money in the long run. That is rarely the situation though. If you can do it, it is well worth consideration!