You should think about the term on your mortgage loan and whether it would be beneficial to pay it off early.

Pros of Early Payoff

  • Nearing Retirement: If you are nearing retirement, paying off your mortgage can bring peace of mind and extra cash flow during your retirement years.
  • Increased Disposal Income: If you want more money to use for other purposes, you can free up a big chunk by paying off your mortgage faster.
  • Access to 100% of the Equity in the Home: You can tap into the equity for home improvements and renovations. It is also easier to sell the home or convert it into a profit-making rental property.

Cons of Early Payoff

  • No Interest Tax Deduction: You will lose the interest tax deduction you can claim on your federal tax return.
  • Savings Shortages: You could be forced to cut how much you save or invest for retirement to pay off the loan faster.
  • Less Access to Cash: While you can get a loan against the equity in the home, it is not as fast or convenient as tapping into an emergency savings funds.

Most people tend to strike a balance between paying off their mortgages sooner and their other financial and cash needs. One way to do this is by refinancing your current loan for a shorter term or lower interest rate. To learn more about different options for paying off your mortgage faster, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today!