Wouldn't' it be nice to be living without any debt or financial liabilities? It would surely give someone a whole lot of peace of mind, particularly those who are nearing their retirement. Experts advise that it is generally best to go ahead and pay off your mortgage loans before retirement, but only after weighing in on things to consider.
Here are some of the considerations to help a borrower decide on when to pay off your mortgage:
You have set aside an emergency money.
Some call this "peace of mind" fund. It is not recommended to pay off your mortgage loans when you are not liquid or you don't have an emergency money, as per The Street. This is because you still have other payments to make related to your property such as tax and insurance.
"Some homeowners forget that no mortgage doesn't mean no payments. Unfortunately, you are still going to get a tax bill for that property and maintaining sufficient funds is something every homeowner should consider long before that mortgage is paid off," said Kevin Driscoll, vice president of advisory services Navy Federal Financial Group.
Driscoll emphasized the importance of maintaining an account of funds to take care of these monthly payments.
You have paid other debts.
Before spending your money to pay the last of your mortgage responsibilities, The Gazette recommends ensuring that you paid other debts first, those that have higher interest rates such as credit cards, consumer or car debts. Because they have high interests, you may only end up increasing your spending.
You are still far away from retirement.
Because mortgage interests are really low, experts say there is no need to rush paying off the remaining amount of your home loan. Tim Moran, a financial planner and managing partner of Moran and Company, via The Street, said it is better to build your retirement fund first than paying off mortgage loans.
