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Should You Pay Off Your Mortgage?

A lot of people consider making extra payments every month to pay off their mortgage or even paying the whole thing in one lump sum. There are mixed opinions about paying off mortgages especially in a climate where mortgages rates are really low, some months offering record-braking rates. The local Raleigh moving specialists suggest that you first think about how much money you'll actually be saving by taking those measures. For most people, the savings aren't that big, especially with the interest rates that banks are offering today. All My Sons of Raleigh remind you that you can also deduct that interest from your taxes. If your personal rate is considerably high compared to what's out there, try refinancing. That might be a better option for you.

By making more payments or paying off your entire mortgage in one shot, you're depleting your savings account. Or are you? The local Raleigh movers remind you to always have an emergency fund. You want to make sure that if you did pay off your entire debt, you still have some savings for a rainy day. You might have to make unexpected major repairs, you might have to depend on your savings if you're out of work (the economy has just started to get better, but unemployment is still a reality for many). The general rule is to have funds to cover between 3 and 12 months of your necessary expenses. In case of emergency, you might be able to borrow money against your home equity (if it's paid off) but that's not always a guarantee. The All My Sons of Raleigh remind you that home equity can drop really fast.

Another thing to think about when you're considering paying off your mortgage is your other debts. Because a mortgage is typically a good debt to have. Credit cards with high interest rates, payday loans and other types of high-interest debt are considered bad debt. You should probably pay those off before your home mortgage. Your extra money can be placed somewhere else such as matching your company's retirement plan. In 2007, there was a study done by the Federal Reserve that found that 38% of U.S. households currently paying down their mortgage at the expense of retirement plan contributors and they're losing between 11% and 17% depending on their choice of investment. So what are your thoughts the All My Sons of Raleigh ask? Do you think paying off your mortgage will be good for you?