4 Simple Ways to Pay Off Your Mortgage Early
4 Simple Ways to Pay Off Your Mortgage Early
Buying a home is a major expense and a major debt. Its said its the biggest purchase youll make in your life.
A traditional mortgage loan is repaid over the course of 30 years, but today, some terms call for up to 40 years of repayment.
Quick Tip: Right now mortgage rates are very low, so if you are wanting to pay off your mortgage quicker, consider refinancing. Just click here to see how much you can save.
For those who arent looking to change the terms of their mortgage loan, such as refinancing to a lower interest rate or converting a 30-year loan to a 15-year loan, there are a few ways you can put a dent in the principal and lower the amount of interest paid in the following months and years.
While some folks claim that paying down the principal reduces the mortgage interest available to deduct on your federal tax return if you itemize, in the long run, youll still come out ahead. Take into consideration that your tax liability will likely increase incrementally if youre already in the middle of paying off your mortgage.
Another argument against is that the extra money could be put into investments but youd have to make at least the same percentage return as your interest just to break even. Right now, that means playing the stock market or putting money into less-risky savings vehicles, such as CDs, which are barely paying 1% in some places. But dont forget, these investments are taxable. Your mortgage interest can be used to reduce your tax burden. (más…)
