Paying off your mortgage has several advantages. Unfortunately, many home owners do not want to pay off their mortgages early because they have to pay more each month to make that happen and that gives them less spending money. To be fair, however, some home owners simply cannot put more money towards their mortgage than they already do. However, if you have the opportunity to pay off your mortgage a few years early, here are some benefits that you can reap.
How often do you want to buy something during the month but you can’t because you have to make sure you have enough to pay your mortgage payment? When you don’t have a mortgage payment, you can free up a lot of your money. Your mortgage payments are probably the largest bill you have each month. Just imagine how much more financial freedom you would have if you could have that much more money all the time! You could finally pay off some other debts, open that business that you have always wanted to open or buy that motorcycle that you’ve had your eye on for years.
The longer you pay on your mortgage, the more interest you are paying. Over a 30-year mortgage, you are paying thousands and thousands of dollars just in interest. However, when you pay your mortgage off early, you will pay less in interest. For instance, if you pay off your mortgage in 20 years instead of 30, that’s 10 years of interest that does not accumulate and get added to the overall cost of the home.
Save for Retirement
Mortgage payments often hinder homeowners from contributing as much to their retirement fund as they should. As a result, many homeowners retire but still need to find a job in order to live. When you pay off your mortgage ten years early, you can start putting that money into your retirement account. Just pretend like you are still making your mortgage payments, but send them to your money market or IRA instead.
Sense of Security
Imagine how good it would feel to own your home free and clear. You would never have to worry about getting it taken away if you lose your job or if financial times get tough. Your home belongs to you and you can do whatever you want to with it. If you want to pass it down to your kids after your death or anything like that, it is your decision since you own it.
Owning your own home is part of the American dream. Everybody wants to pay off their mortgage early so they have more liquidity with their money. You may even be able to refinance at today’s mortgage rates and make it happen that way. With some hard work and dedication, you can pay off your mortgage early and enjoy the benefits therein.