There are many thing to consider before you actually pay off your mortgage early. So that’s why this article exist.
There are main 4 topic to thing about before you pay off your mortgage early.
The first thing to thing about is the real estate market. And this is about he real estate market which might dip when you are considering to sell. Which will make it harder to receive the price which you had hoped for.
The second thing is about using all your extra cash to pay down your mortgage which might be tied up too much of your net worth at your place. And this sort of makes it harder to access it later. And thats why you need a cash-out refinance or a second mortgage to sort of generate cash flow from your home investment.
The third thing is that you might miss out on higher returns from investments whose rates of return could possible exceed the amount of interest you’re paying on the mortgage. Keep in mind that the stocks doesn’t always go up.
You could potentially avoid very big losses by applying extra funds toward your mortgage.
The last thing is about IRA. The money you put in the deposit into an IRA instead of paying down your mortgage can grow tax-free. Focusing simply on the building a healthy retirement fund when you’re younger gives your savings more time to grow. But also you can deduct contributions to your traditional IRA up to the IRS’s annual limits