Does it make sense to pay off your mortgage early?

[Wanaruona]

@Wanaruona

Hii wekea watu wakusalimiana. Some of us are married na we don’t plan to cheat on our wives.

Thanks you considering our views.

[WongNamba]

@sludgist

Alafu utoe io advert hapo chini
Nii akili haunanga ama?

:D:D:D:D:D

[Sovereign2]

@Purple

There are so many opinions on whether or not you should pay off your mortgage early.

Some say that paying off your mortgage is a bad idea because you could make a lot more money in the stock market. With the bull market over the past decade, there’s a lot of truth to that.

And others appreciate the peace that comes with not owing anything to the bank each month. The benefits that come with that freedom are hard to deny as well.

So, what’s the right answer?

I’m not sure there is one. I think only YOU can answer decide what’s best for YOU.

In 2013, my wife and I decided to pay off our $200,000 mortgage in less than 5 years. It was an aggressive decision and one that required a lot of partnership and dedication. But we did it … together. And we’re so glad we did.

That was a personal choice and it was best for our family.

If paying off your mortgage sounds interesting to you, here are 10 compelling reasons to consider it.

[SIZE=6]1. Decreased Annual Living Expenses[/SIZE]
According to the US Department of Labor in 2018, the largest expense in the typical American family’s household budget is their mortgage or rent. Imagine that being completely wiped from your annual expenses. What a weight off your shoulders!

That would leave you more money for fun, vacations, investing for the future, contributing to your kid’s college funds and so much more.

Since our mortgage and extra principal payments were around 35% of our living expenses, we are breathing MUCH easier with our mortgage gone.

[SIZE=6]2. Makes Saving for Retirement Easier[/SIZE]
Before paying off our mortgage our annual expenses were around $75,000 per year. With that type of lifestyle, we would need to save around $1,875,000 to retire comfortably using the 4 percent rule.

By removing our mortgage from the equation, our annual expenses are now around $60,000 per year. In theory, this means we only need to save up $1,500,000 for our retirement to live our current comfortable lifestyle.

Now there are a lot of factors that can throw that convenient math problem off (inflation, lifestyle change, etc), but when all is said and done, it’s going to be easier for us to retire. $375,000 easier!

[SIZE=6]3. Increased Savings Rate[/SIZE]
With no house payment, we’ve been able to save around 50% of our income. That is huge for us.

At the beginning of our marriage, we were living for today, spending what we wanted and we were happy … until we realized we were broke.

Having a large cushion of savings, built up retirement accounts and a development of income-producing assets will also make us feel happy … just in a different way.

[SIZE=6]4. Increased Net Worth[/SIZE]
When you don’t have debt, you avoid the negative drain on your net worth. And without a mortgage, this is doubly true!

When we started our journey of financial betterment in 2010, we had a -$50,000 net worth. (Yes, that’s a negative symbol).

We owed A LOT more than we owned. I owed more on my home than it was worth, had $30,000 of student debt and I was spending more than I was earning. I even bought my wife’s engagement ring with my student loans!

[SIZE=5]5. Have More Fun[/SIZE]
My wife loves to do design projects in our home. I love vacations. With more available cash flow, we’ve been able to enjoy life and reward ourselves more lately.

Nicole has been able to update our laundry room, buy new furniture guilt-free and we even got the big screen TV we always wanted. This home now feels like a palace and it’s ours!

We’ve traveled a lot more as well. Disney World, Cabo San Lucas, Los Angeles, Ft. Lauderdale and many trips to Northern Michigan have been some of our favorite destinations since paying off our mortgage.

While some of our trips were supported by credit card rewards, having the extra cash available has helped us travel without restriction. Getting out-of-town during our Michigan winters is now a must for this family.

[SIZE=5]6. Reduced Stress[/SIZE]
I don’t know about you, but I really stressed out about the size of my mortgage. Having such a large payment each month made me feel worried.

“What if I lose my job and we’re not able to make the payments?!

“Or what if I get a new boss and he’s a complete jerk, but I can’t leave because of the mortgage?!”

These were real reoccurring thoughts I had. And I couldn’t just tell myself to calm down or not think about it. (Believe me, I tried. The Calm meditation app has become a good friend of mine lately!)

When our $1,300 (w/o taxes and insurance) payment was gone, my stress level decreased dramatically.

Sure … There are still other bills we have to pay for the rest of our lives, but none will ever be as large as our mortgage.

(FYI: We worked with LendingTree to secure on our 15-year mortgage. Having a shorter-term mortgage helped a lot because the principal payments were much higher each month).

[SIZE=6]7. Never Worry About Refinancing Your Mortgage[/SIZE]
You know when the interest rates drop and all you hear is chatter about refinancing your mortgage? Well, when you don’t have a mortgage, you don’t even have to wrestle with the decision of if you should refinance your mortgage or not.

That is one less decision you have to make FOR THE REST OF YOUR LIFE!

There are major benefits to reducing the number of decisions you need to make in your day. You’ll be more productive, your mind will feel more clear and life can feel easier.

[SIZE=6]8. Ownership Pride[/SIZE]
The fact that Nicole and I own our home outright fills me with so much pride. The peace of mind that comes with true homeownership is incredible.

https://d3eh3svpl1busq.cloudfront.net/EpKozjrcWHKvRPKJyWkpKTnaKmToHStI/assets/static/optimized/rev-3de803b/www.marriagekidsandmoney.com/wp-content/uploads/2018/09/5f1457c787ec7f17f992152c56a76fbb.Why-We-Started-Marriage-Counseling-After-Paying-Off-Our-Mortgage-with-Andy-Nicole-Hill-Wordpress.jpeg
I’ve even found myself standing on my front lawn staring at my house and saying, “That’s our house. We own all of it. My kids will always have a place to call home.”

Those statements are REALLY fun to say.

[SIZE=6]9. Design a New Lifestyle[/SIZE]
I’ve had the chance to interview dozens of families on my podcast who have paid off their mortgage. One of the most impressive things I’ve learned about how mortgage freedom has changed things for them is with their overall lifestyle design.

Many have gone from working full-time jobs to just part-time jobs. Now that they don’t need as much money to live, they don’t want to work as much. How cool is that!?!

Others completely changed career paths altogether. It’s as if they now had the confidence and financial cushion to make bolder lifestyle decisions. That’s what mortgage freedom did for them.

[SIZE=6]10. Easier Path to Financial Independence[/SIZE]
With a paid-off mortgage, you don’t have to save as much money to reach financial independence. Your expenses are now significantly lower.

For example, if your family spends $60,000 to live each year and then pays off your mortgage with a $1,000 payment per month, your new annual living expenses are only $48,000.

That means, you now only need to create $4,000 of passive income earnings to become financially independent.

How can you get there? Here are 3 of my favorite passive income-producing routes:

[ol]
[li]Buy-and-hold rental real estate[/li][li]Investing in a taxable brokerage account[/li][li]Affiliate or advertising income through a blog[/li][/ol]
I’m not insinuating that people shouldn’t focus on passive income before they’re mortgage-free. In fact, I’d highly recommend it!

If you want to get into rental real estate, more power to you.

Have a small business idea that allows you to follow your passion and provide for your family? Go for it!

Nicole and I have had a lot of trial and error to get where we are today. The knowledge that we’ve gained from that trial and error has been priceless.

In the end, the plan to pay off our mortgage has worked out very well for our young family. Being mortgage-free at 35 was a family tree changing moment for us.

I hope you find a path that works well for your family too.
15 Incredible Benefits of a Paid Off House – Marriage Kids and Money

My opinion: if you can, just pay it off (for the peace of mind). This is something you’d have to check with a CPA because there are tax benefits of holding on mortgage. I started my mortgage at just over 4%, but I’ve since renegotiated (you could call it refinance, though I used unconventional and crude ways to do it!) and I’m currently at 3.5%. I get tax benefits, though I’ve never bothered to calculate the savings I’d get by paying off vs tax deductions. I also have a handsome equity. Early last year I had done a rough estimate of around $100k, but towards the end of 2019 I had an (unofficial) appraisal by a realtor friend and he suggested a $150k to $190k equity.
If I could get a lump-sum amount, I’d probably pay off, but I’d also consider investing the money at higher returns! Keep in mind that, even after you pay off your mortgage, you’d still pay annual real estate taxes (which could be a substantial amount depending on the state and local jurisdiction).

[system]

@Sovereign2

My opinion: if you can, just pay it off (for the peace of mind). This is something you’d have to check with a CPA because there are tax benefits of holding on mortgage. I started my mortgage at just over 4%, but I’ve since renegotiated (you could call it refinance, though I used unconventional and crude ways to do it!) and I’m currently at 3.5%. I get tax benefits, though I’ve never bothered to calculate the savings I’d get by paying off vs tax deductions. I also have a handsome equity. Early last year I had done a rough estimate of around $100k, but towards the end of 2019 I had an (unofficial) appraisal by a realtor friend and he suggested a $150k to $190k equity.
If I could get a lump-sum amount, I’d probably pay off, but I’d also consider investing the money at higher returns! Keep in mind that, even after you pay off your mortgage, you’d still pay annual real estate taxes (which could be a substantial amount depending on the state and local jurisdiction).

You’re right, it’s better to be mortgage free. Also, the tax benefits of a mortgage are often times overstated. Assuming you have PMI (and you clear it) and as the principal starts coming down the amount of taxes you can write off from interest payments are less.

[Swahilijoe]

@Sovereign2

My opinion: if you can, just pay it off (for the peace of mind). This is something you’d have to check with a CPA because there are tax benefits of holding on mortgage. I started my mortgage at just over 4%, but I’ve since renegotiated (you could call it refinance, though I used unconventional and crude ways to do it!) and I’m currently at 3.5%. I get tax benefits, though I’ve never bothered to calculate the savings I’d get by paying off vs tax deductions. I also have a handsome equity. Early last year I had done a rough estimate of around $100k, but towards the end of 2019 I had an (unofficial) appraisal by a realtor friend and he suggested a $150k to $190k equity.
If I could get a lump-sum amount, I’d probably pay off, but I’d also consider investing the money at higher returns! Keep in mind that, even after you pay off your mortgage, you’d still pay annual real estate taxes (which could be a substantial amount depending on the state and local jurisdiction).

Trump screwed up with the tax benefits when they redid the tax codes. Now you can’t claim more than 10,000 per year for both the mortgage interest and property taxes. My property taxes come to approx 5500 a year so when I pay off i will forego 4500 a year which will not make a change in my deductions.

[Simiyu22]

@Sovereign2

My opinion: if you can, just pay it off (for the peace of mind). This is something you’d have to check with a CPA because there are tax benefits of holding on mortgage. I started my mortgage at just over 4%, but I’ve since renegotiated (you could call it refinance, though I used unconventional and crude ways to do it!) and I’m currently at 3.5%. I get tax benefits, though I’ve never bothered to calculate the savings I’d get by paying off vs tax deductions. I also have a handsome equity. Early last year I had done a rough estimate of around $100k, but towards the end of 2019 I had an (unofficial) appraisal by a realtor friend and he suggested a $150k to $190k equity.
If I could get a lump-sum amount, I’d probably pay off, but I’d also consider investing the money at higher returns! Keep in mind that, even after you pay off your mortgage, you’d still pay annual real estate taxes (which could be a substantial amount depending on the state and local jurisdiction).

Hmmm. That was an interesting refinance. When you are below 5%, refinancing actually makes you pay more over the length of the mortgage. The reason is because of amortization of the loan. You actually rebooted the loan.

[Simiyu22]

@Purple

You’re right, it’s better to be mortgage free. Also, the tax benefits of a mortgage are often times overstated. Assuming you have PMI (and you clear it) and as the principal starts coming down the amount of taxes you can write off from interest payments are less.

My understanding is the tax benefits were taken away by Trump. People are no longer qualifying for any deductible. But with mortgage rates at 3% and less , it is equal to someone without a mortgage. That is the mortgage is so cheap, it’s equal to holding cash.

[ochithunder]

Who writes such long articles about such simple things!! Only a mad person can forgo paying a mortgage earlier for the stock market…

[johnpombe]

Most talkers wako at this stage, mortgage maneno is greek.

https://pbs.twimg.com/media/Eox0dGYXcAIL8eQ?format=jpg&name=900x900

[Sakmadic]

@Purple

There are so many opinions on whether or not you should pay off your mortgage early.

Some say that paying off your mortgage is a bad idea because you could make a lot more money in the stock market. With the bull market over the past decade, there’s a lot of truth to that.

And others appreciate the peace that comes with not owing anything to the bank each month. The benefits that come with that freedom are hard to deny as well.

So, what’s the right answer?

I’m not sure there is one. I think only YOU can answer decide what’s best for YOU.

In 2013, my wife and I decided to pay off our $200,000 mortgage in less than 5 years. It was an aggressive decision and one that required a lot of partnership and dedication. But we did it … together. And we’re so glad we did.

That was a personal choice and it was best for our family.

If paying off your mortgage sounds interesting to you, here are 10 compelling reasons to consider it.

[SIZE=6]1. Decreased Annual Living Expenses[/SIZE]
According to the US Department of Labor in 2018, the largest expense in the typical American family’s household budget is their mortgage or rent. Imagine that being completely wiped from your annual expenses. What a weight off your shoulders!

That would leave you more money for fun, vacations, investing for the future, contributing to your kid’s college funds and so much more.

Since our mortgage and extra principal payments were around 35% of our living expenses, we are breathing MUCH easier with our mortgage gone.

[SIZE=6]2. Makes Saving for Retirement Easier[/SIZE]
Before paying off our mortgage our annual expenses were around $75,000 per year. With that type of lifestyle, we would need to save around $1,875,000 to retire comfortably using the 4 percent rule.

By removing our mortgage from the equation, our annual expenses are now around $60,000 per year. In theory, this means we only need to save up $1,500,000 for our retirement to live our current comfortable lifestyle.

Now there are a lot of factors that can throw that convenient math problem off (inflation, lifestyle change, etc), but when all is said and done, it’s going to be easier for us to retire. $375,000 easier!

[SIZE=6]3. Increased Savings Rate[/SIZE]
With no house payment, we’ve been able to save around 50% of our income. That is huge for us.

At the beginning of our marriage, we were living for today, spending what we wanted and we were happy … until we realized we were broke.

Having a large cushion of savings, built up retirement accounts and a development of income-producing assets will also make us feel happy … just in a different way.

[SIZE=6]4. Increased Net Worth[/SIZE]
When you don’t have debt, you avoid the negative drain on your net worth. And without a mortgage, this is doubly true!

When we started our journey of financial betterment in 2010, we had a -$50,000 net worth. (Yes, that’s a negative symbol).

We owed A LOT more than we owned. I owed more on my home than it was worth, had $30,000 of student debt and I was spending more than I was earning. I even bought my wife’s engagement ring with my student loans!

[SIZE=5]5. Have More Fun[/SIZE]
My wife loves to do design projects in our home. I love vacations. With more available cash flow, we’ve been able to enjoy life and reward ourselves more lately.

Nicole has been able to update our laundry room, buy new furniture guilt-free and we even got the big screen TV we always wanted. This home now feels like a palace and it’s ours!

We’ve traveled a lot more as well. Disney World, Cabo San Lucas, Los Angeles, Ft. Lauderdale and many trips to Northern Michigan have been some of our favorite destinations since paying off our mortgage.

While some of our trips were supported by credit card rewards, having the extra cash available has helped us travel without restriction. Getting out-of-town during our Michigan winters is now a must for this family.

[SIZE=5]6. Reduced Stress[/SIZE]
I don’t know about you, but I really stressed out about the size of my mortgage. Having such a large payment each month made me feel worried.

“What if I lose my job and we’re not able to make the payments?!

“Or what if I get a new boss and he’s a complete jerk, but I can’t leave because of the mortgage?!”

These were real reoccurring thoughts I had. And I couldn’t just tell myself to calm down or not think about it. (Believe me, I tried. The Calm meditation app has become a good friend of mine lately!)

When our $1,300 (w/o taxes and insurance) payment was gone, my stress level decreased dramatically.

Sure … There are still other bills we have to pay for the rest of our lives, but none will ever be as large as our mortgage.

(FYI: We worked with LendingTree to secure on our 15-year mortgage. Having a shorter-term mortgage helped a lot because the principal payments were much higher each month).

[SIZE=6]7. Never Worry About Refinancing Your Mortgage[/SIZE]
You know when the interest rates drop and all you hear is chatter about refinancing your mortgage? Well, when you don’t have a mortgage, you don’t even have to wrestle with the decision of if you should refinance your mortgage or not.

That is one less decision you have to make FOR THE REST OF YOUR LIFE!

There are major benefits to reducing the number of decisions you need to make in your day. You’ll be more productive, your mind will feel more clear and life can feel easier.

[SIZE=6]8. Ownership Pride[/SIZE]
The fact that Nicole and I own our home outright fills me with so much pride. The peace of mind that comes with true homeownership is incredible.

https://d3eh3svpl1busq.cloudfront.net/EpKozjrcWHKvRPKJyWkpKTnaKmToHStI/assets/static/optimized/rev-3de803b/www.marriagekidsandmoney.com/wp-content/uploads/2018/09/5f1457c787ec7f17f992152c56a76fbb.Why-We-Started-Marriage-Counseling-After-Paying-Off-Our-Mortgage-with-Andy-Nicole-Hill-Wordpress.jpeg
I’ve even found myself standing on my front lawn staring at my house and saying, “That’s our house. We own all of it. My kids will always have a place to call home.”

Those statements are REALLY fun to say.

[SIZE=6]9. Design a New Lifestyle[/SIZE]
I’ve had the chance to interview dozens of families on my podcast who have paid off their mortgage. One of the most impressive things I’ve learned about how mortgage freedom has changed things for them is with their overall lifestyle design.

Many have gone from working full-time jobs to just part-time jobs. Now that they don’t need as much money to live, they don’t want to work as much. How cool is that!?!

Others completely changed career paths altogether. It’s as if they now had the confidence and financial cushion to make bolder lifestyle decisions. That’s what mortgage freedom did for them.

[SIZE=6]10. Easier Path to Financial Independence[/SIZE]
With a paid-off mortgage, you don’t have to save as much money to reach financial independence. Your expenses are now significantly lower.

For example, if your family spends $60,000 to live each year and then pays off your mortgage with a $1,000 payment per month, your new annual living expenses are only $48,000.

That means, you now only need to create $4,000 of passive income earnings to become financially independent.

How can you get there? Here are 3 of my favorite passive income-producing routes:

[ol]
[li]Buy-and-hold rental real estate[/li][li]Investing in a taxable brokerage account[/li][li]Affiliate or advertising income through a blog[/li][/ol]
I’m not insinuating that people shouldn’t focus on passive income before they’re mortgage-free. In fact, I’d highly recommend it!

If you want to get into rental real estate, more power to you.

Have a small business idea that allows you to follow your passion and provide for your family? Go for it!

Nicole and I have had a lot of trial and error to get where we are today. The knowledge that we’ve gained from that trial and error has been priceless.

In the end, the plan to pay off our mortgage has worked out very well for our young family. Being mortgage-free at 35 was a family tree changing moment for us.

I hope you find a path that works well for your family too.
15 Incredible Benefits of a Paid Off House – Marriage Kids and Money

I have 6 more years to pay off my mortgage, i see no incentive at all paying it early after 9 years of repayment. If there is any suitable time to repay all the mortgage, then its in the first 5 years.

[WongNamba]

@johnpombe

Most talkers wako at this stage, mortgage maneno is greek.

https://pbs.twimg.com/media/Eox0dGYXcAIL8eQ?format=jpg&name=900x900

Hapo hapo

[gathura]

Different markets different views hapa Kenya mortgage ni upuss kabisa

[axii]

Regarding payments, you can consult and get a full consultation from your lawyer, who is available to you when using this service. I believe that it is better to pay earlier than not to be in time at the right time and doom yourself to interest(sometimes this amount exceeds the required amount several times). My lawyer has always been a true friend and adviser to me in matters of lending and other financial transactions. I have been using the services of Mortgage Advisor Cambridge for several years and have never been disappointed. I was able to become financially literate

[Simiyu22]

@axii

Regarding payments, you can consult and get a full consultation from your lawyer, who is available to you when using this service. I believe that it is better to pay earlier than not to be in time at the right time and doom yourself to interest(sometimes this amount exceeds the required amount several times). My lawyer has always been a true friend and adviser to me in matters of lending and other financial transactions. I have been using the services of Mortgage Advisor Cambridge for several years and have never been disappointed. I was able to become financially literate

Since when did lawyers advice on Mortgages. First time I ever heard of this.
Lawyers are legal professionals. Depending on them on finances will land you in the toilet.

[PencilBox321]

I guess that paying off the mortgage is a dream of everyone and why not do this earlier if you have the possibility?! Of course, everything depends on your contract with the bank but I guess that each bank wants to get as much money as it is possible. Anyway, you have to talk to a specialist on this point. If you haven’t found one yet, you can try to contact Mortgage Advice London. One of my friends worked with these guys when he got his mortgage for the house. They guided him. Now he has a very beautiful house and pays for it each month. Good luck!

[yalamalalam]

@PencilBox321

I guess that paying off the mortgage is a dream of everyone and why not do this earlier if you have the possibility?! Of course, everything depends on your contract with the bank but I guess that each bank wants to get as much money as it is possible. Anyway, you have to talk to a specialist on this point. If you haven’t found one yet, you can try to contact Mortgage Advice London. One of my friends worked with these guys when he got his mortgage for the house. They guided him. Now he has a very beautiful house and pays for it each month. Good luck!

Everything depends on the contract that you sign from the beginning. That is why is better to ask specialists first!