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Thursday, May 19, 2011

Paying off your mortgage is a different kind of investment

As I read this article I thought of how many of my clients pay extra toward their mortgage each month in hopes of getting their mortgage paid off sooner rather than later.  8 out of 10 of my clients have regularly paid extra principal payments for most of their mortgage term.

I also thought of my fellow Business Network International friends who state in their biographies of what their #1 goal is.  The majority say that their burning desire is "to be debt free!"

Considering the real desire of those I help and what my friends and family tell me, I found the following article interesting because it brings a great argument to the table about, "Why should we (or why should we NOT) payoff our mortgage.   

I share formulas for early mortgage payoff.  They are simple and my clients like to hear how to payoff their mortgages early,  They like the idea.  I like telling them how to make it happen.  It makes me happy that I told them about how to do it and they really like the idea of paying off their mortgage early.  Best of all?  Paying off your mortgage early is easy, it just takes discipline.

BUT here I beg the question, "Why should a mortgagee payoff their mortgage early?"  When you have a mortgage, there are tax benefits and tax savings.  Returns on a well diversified stock portfolio have a historical return of 9-12%. Why pay off early when your interest rate is sub 6%?  Lots to think about before jumping into an accelerated Mortgage payoff schedule. 

Here is the article to continue the argument for holding onto your mortgage as a GOOD (if not GREAT Investment): Should I payoff my mortgage early?