Planning for tomorrow is important. The more you aducate yourself on your financial options, the more confident you will feel with your decisions. Here are some important things to consider before you decide to pay off your mortgage.
Secure investments: Many debate whether they should put their money toward paying off their mortgage or invest it in bonds or the stock market. If the unpredictibility of the market makes you uneasy, consider prepaying on your mortgage because it reduces your total interest expense. You will earn a " garanteed return" on your home mortgage.
Cancel Your Private Mortgage Insurance: You are probably paying private mortgage insurance(PMI) if you borrowed more than 80% of your home's appraised value. Making extra payments on your mortgage will help you reach the 20% equity you need to drop the PMI--and stop paying those premiums.
Peace of Mind: For some, owning a home and being debt-free can be psychologically rewarding. Reducing your mortgage with prepayments helps pay off debt significantly sooner. Just be careful that paying off your mortgage early doesn't come at the expense of retirement savings or lead to high interest credit card debt.
Retirement Beacons: It's simple- pay now, have more to spend during your golden years. If you'd prefer not to dip into your retirement savings to finish paying off your mortgage, consider prepaying while you're still in the workforce.
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