For most homeowners, paying off a mortgage is a daunting and intimidating reality of life. It’s the monthly burden that comes with owning your own home, and it’s something you take on, knowing it will be with you for what could be decades. Many people dream of living debt free, so today we’re asking the question: should you pay off your mortgage early? We sat down with Jacques Poujade, a business expert with more than 30 years of experience in real estate financing. As a managing partner at LendPlus and a real estate brokerage in a financing firm, he is passionate about helping all aspiring homeowners finance their dream home and discussing the complex topics that come along with home ownership.
In general, Americans are dealing with a bigger mortgage burden now, than in previous years. In 2019, the average mortgage was $203,296, which was up about $5,000 from 2018. These are no small numbers for families and homeowners to take on. Mortgages mean monthly bills for what is typically 30-years. It’s no small undertaking.
Financial freedom is something most Americans dream about. If you have no monthly house payment, you can put that money into other areas of your life. Your kids, business ventures, retirement, leisure, or even additional properties and investments. Having that cash freed up in your daily life could make a huge difference. But most people don’t even think about paying off their mortgage early, or if they think about it, they’re not sure how to get there.
Paying off your mortgage early is not as difficult and out of reach as it may sound. Take a close look at your finances and see if there are ways you can put aside some extra money for payments. Even small amounts of money add up, especially over the course of years. You can then make extra payments on your principal only, which is an option with most lenders. Homeowners just need to know to ask for it. A little can go a long way here. This could lead to you paying off your mortgage years earlier than expected. You can also look into refinancing your loan into something shorter term. And odds are, this could help you out when it comes to your interest rate. Another option is to pay your mortgage using crypto. I talked about how LendPlus revolutionized the real estate industry by accepting crypto for mortgage payments in an interview with SkippingStonesDesign.
Well firstly, if you’re putting extra money into your mortgage, you’re losing that liquid cash in your bank account. That money could be going towards additional investments in your life. You need to weigh that against the benefit of saving on the interest expenses you’re accruing. And you need to be okay with losing that extra money in your pocket every month. Deducting mortgage interest is also a pretty useful tax strategy for many homeowners. That’s another factor to take into consideration. Really, deciding whether or not to pay off a mortgage early comes down to each homeowner’s personal situation.