Money Matters: Should you pay off your mortgage early?

September 15, 2017 01:30

Sponsored by NEFE

It's been an ongoing debate in the financial planning world: If a homeowner has extra cash, should they pay off their mortgage early or put the money toward other investments? For some, especially older homeowners at or nearing retirement age, paying off the mortgage could help ensure your have enough retirement income for living expenses. But for younger people, experts lean toward keeping the mortgage going and putting the money into other investments that will have a better long-term payoff.

As MarketWatch points out, people in a low tax bracket with a high interest mortgage could benefit from getting rid of mortgage payments. But for those in higher brackets with a fixed, long-term, low interest mortgage, other investments will have a higher return in the long run. Keeping the mortgage going allows for higher liquidity in case of emergency, mortgage payments get easier with time as your income rises, and mortgage interest is usually inexpensive.
 
To help your readers/listeners/viewers learn more about the pluses and minuses of paying off a mortgage early, talk with loan officers at banks and credit unions in your market. They can draw up samples that show how people at different income levels and ages can spread out house payments to their best advantage. And financial planners can demonstrate comparisons of the long-term differences between the two strategies.

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Casey Bond from Forbes.com entered the 2016 NEFE/RTDNA awards contest with a piece about the value of a college education in today's world.