I absolutely believe that you can never go wrong paying off debt - no matter what it is. We like to believe in paying off consumer debt first, which is credit card debts, student loans, car loans, home equity lines of credit, and eventually working towards paying off your house. Again, I really believe that you can’t go wrong paying off the house.
I think there are some major advantages and some reasons to consider paying off the house sooner rather than later. One major reason is just a pure day-to-day expense side of things - you’re going to reduce your monthly expenses, and you can use those resources for something else. Giving, or some of your other future goals. Perhaps you have kids - college planning. You’ve got some other dreams or some other things that you want to do. You can put those dollars to use in that particular goal.
Another major advantage from a financial perspective of paying off your house is that you will reduce your overall total interest expense, which goes to the mortgage company or the finance company. You own it. I’m telling you, there’s an incredible feeling when you own your house. We paid off our house a long time ago. It’s just a different feeling. There is a lot of freedom in knowing that this house is yours.
Some of the negative sides - and I’m going to tell you that I am biased. Some of the other things that you may lose out on, if you will, you can’t deduct the mortgage interest. Some of the rules have changed depending on the amount that you have, in terms of the overall mortgage, but that could be a challenge.
The other thing to think about is - are there things in your life that you may be sacrificing that could cause issues, or relationship issues? I find that very low, in terms of that happening to people, but that could be another area that could be a potential negative, as far as if you’re sacrificing in some other area that is going to be a detriment.
I think it's an overall positive idea - paying off the house sooner rather than later.
We’ve got a couple of calculators on our website that can give you some pointers in terms of - if you paid it off within a certain number of years or if you refinance, what that could save over a period of time - that’s all available at summitwealthgroup.com
We’re happy to have a conversation with you about some of the pros and cons that I mentioned about paying off the house early, but I think you can’t go wrong doing that.