Planning on Paying Off Your Mortgage Earlier than It Is Stipulated?
It is true that many home owners are looking with excitement towards that day when they will be over with mortgage prepayments, while other dally with the idea of paying their mortgage earlier than it is stipulated by the contract term. Well, this article is addressed to the latter category of home owners in order to present them the aspects they will confront with once they want to pay off their loan early.
The benefits of paying off early the mortgage are:
- You have the chance to reduce the monthly burden that comes in the form of mortgage repayment rates. More than this, you will eliminate the interest rates attached to the monthly repayment plan.
- Instead of paying those monthly interest rates, you can for instance get involved in charity organizations and donate that money in charitable purposes. You will benefit also from tax deduction when being involved in these actions.
- The fact that you have eliminated a monthly payment for many years to come is usually more liberating for both you and your family and know that as such you have at least ensured them a roof over their head for the future.
The cons of paying off your mortgage early:
- As it happens with the majority of mortgage loans, paying off earlier a mortgage loan will come with penalties that are usually pretty high in these sorts of situations. Therefore you need to calculate which option proves the most suitable to you and your current financial status.
- Another disadvantage would be that you can miss out on an investment initiative. Just think a little bit: you have this large amount of money that you plan to pay off with it the remaining of your mortgage loan. Why not invest this money into something more lucrative that will bring money for you and your family? Most of the times, people seem to forget about this possibility, but this is definitely a thing to consider when owning a large amount of money that can work for bringing you profit.
So, there you have it: both pros and cons aspects that come with paying off your mortgage early. It is only up to you to decide which alternative works the best for you and your family. If you have inherited a large amount of money and you will still be left with a considerably large amount after paying off the mortgage, you can of course choose to pay off the loan.
But otherwise, you may decide to have this money invested into a profitable business or something of the sort that can bring you profit and in this case, you won't feel the burden of monthly mortgage repayments.