Should You Pay off the Mortgage Early on Your Maryland Home?

At some point in owning a home in Maryland or Pennsylvania, you may come to a time when you are doing fairly well financially and can either pay off the remainder of your home mortgage loan or make payments larger than the minimum requirement to pay your home off early. But should you? Is it really the best plan for you as a homeowner? Should You Pay off the Mortgage Early on Your Maryland Home?

Why Homeowners Seek to Pay Off Their Mortgage Early

The thought of no longer having a home payment leads homeowners to think that they could take the largest expense most people have in their everyday lives and use it for a myriad of other things. In addition to freeing up more of your income, you have the potential to save thousands of dollars in interest payments to your lender. 

Both of these sound like pretty solid no-brainer reasons to get your home loan paid off as soon as possible. But when you consider all of the small details, some financial experts advise that it may not be the best choice for all homeowners. 

Reasons Not to Pay Your Mortgage Off Early

You Have No Retirement Savings

Before taking a large sum of money from your account to pay off your home, you want to ask how your retirement savings account/plan looks. The first focus of investing your money should be on your retirement. Put as much aside as possible now into a tax-advantaged retirement account to ensure you will be able to live comfortably later. 

You Have Other Unpaid Debts

It is not uncommon for the average homeowner in Maryland to have other debts they are tied to beyond their home. If you have debts with high interest it is best to prioritize paying these debts off first. Focusing on the debts that have more urgency and a higher interest rate will save you more money as compared to paying off your home right now. It is best to assess all of your debt obligations before opting to pay off a mortgage with a lower interest rate. 

There is a Better Investment Opportunity

If you would be using a large sum of your savings to pay off your home you want to make sure it is the best use of your money. You may discover that other investment plans would make you more money with earned interest as compared to putting all of your money into your home right now. If you would be draining your savings to get your home paid off it would be a smart plan to talk with a financial advisor if this is a great use of your money or if investing the bit of extra money you have right now would be better utilized elsewhere. 

Paying off your mortgage early can be and is beneficial to a Maryland homeowner in the right financial circumstances. Homeownership is one of the most solid forms of investment with a long-term mindset. 

For more information on buying or selling a home in Maryland or Pennsylvania contact me any time. I am here to help you find a home you love at a comfortable and affordable price or sell your home for the best price possible. Contact me today with any Maryland and Pennsylvania real estate needs. 

Post a Comment