Updated about 3 years ago on . Most recent reply
Paying Off the Mortgage
Hi everyone,
When does it make sense to pay off your primary residence? Thanks!
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Could be a few reasons. Maybe your rate is higher than available risk-free investment returns.
Maybe someone is in TX or FL with homestead exemptions and they do it for asset protection.
We paid ours off a couple years ago. It was on a 15 yr so a pretty high payment but low balance with no tax deductions.
We then put.a fat heloc on it for an opportunity fund. It also lowered my wife's DTI and freed up another GSE loan because she had 4 already.
At the time our savings wasn't earning squat so saving a few hundred a month in non-deductible interest was part of it as well.
But honestly for most it shouldn't be a priority. Even if you are or are about to retire, earning more than your mortgage rate in an investment is too easy.