Would you pay off mortgage loan early in this economy ?

Deal Score0

– I brought a home last year in chicago suburbs
– townhome $ 220K
– 20%down
– price did not fall much, may be same as last year

Would you pay of the mortgage debt early,by making more extra payments to principal in this economy ?

I made around

4 Comments
  1. Reply
    kyle
    February 13, 2011 at 10:49 am

    I would first make sure you have no other debts (i.e. credit cards, vehicle loans, student loans). If you have any of those pay them off first. Then if that is done then make sure to have 3-6 months of expenses in a money market type account, as an emergency fund. If you are worried about some thing in the future like a job loss I would recommend 6 months maybe more. Then yes go right ahead and pay more on the mortgage and pay it off soon as possible. It is never a bad time to get rid of any type of debt. It dramatically lowers risk…. I’ve never heard of anybody’s house being foreclosed on when they didn’t have a mortgage.

  2. Reply
    Dennis
    February 13, 2011 at 11:44 am

    Depends what you can spare. If you throw in a little extra money here and there it can save a lot in interest. Look at your amortization schedule or a mortgage calculator online.

    You could also argue that interest rates are so low right now that there’s no point in paying extra because you’re borrowing so cheap.

  3. Reply
    Don S
    February 13, 2011 at 12:04 pm

    The answer is not the same for everyone as it has much to do with your age, your tax bracket, your financial security, and how long of a mortgage loan you have. If you can afford to pay more principal without hardship, and are in an age situation where it would good to pay off the loan quicker, then it is never a bad thing. If however, you rely upon the interest tax deduction, and you do not have a high cash flow you may want to just pay the standard amount. While homes were rapidly increasing in value it did not make a lot of sense to pay ahead because the increase in value more than off-set the increased interest payment. Obviously that has all changed these days with either flat or sometimes decreasing home values.

  4. Reply
    Joe B
    February 13, 2011 at 12:56 pm

    nah

    Leave a reply

    Register New Account
    Reset Password