When it comes to handling a mortgage, it’s generally understood that there are a few ways to manage it properly. For some people, there comes a point to where there’s extra money coming in that could allow them to pay their mortgage off early. Since a home is one of the most important investments that we have, it just makes sense to really weigh the pros and cons of paying off your mortgage early.
It’s realistic to imagine a time where there’s enough extra money to pay the mortgage off early. For example, if you come into a large inheritance, you might think about paying off your home. There are other circumstances where extra money could come available, such as a large settlement award or another type of event where money would be available in large quantities.
Regardless of where the money source comes from, the question still remains: should you really pay off your mortgage early?
The answer is a bit more complicated. It will really depend on your financial situation. For example, if you have a lot of credit card debt, it doesn’t really make sense to actually pay for your mortgage early. The reason why you wouldn’t want to pay for your mortgage early if you have a lot of credit card debt is because the interest rate on the credit cards is generally higher than what you would pay for your mortgage rate. When you’re trying to clear debt, it’s better to try to clear the debts that have the highest interest rates.
Along these same lines, you will also want to think twice about paying your mortgage early if you have other financial situations in your life that require the additional cash flow. For example, if you know that you have some costly home repairs that need to be made, it can be better to make those instead of paying your mortgage off early.
Overall, is there an actual time where you can pay your mortgage off early? Definitely — you will want to pay your mortgage off early if you already have enough savings left over, and you’ve already contributed to investment accounts. If you’re in this position, then paying off the mortgage early is something that can save you a lot of interest and a lot of time in the long run — why not look over your budget in greater detail and see if this is an option that makes sense for you?