For most people, a home mortgage will be the largest debt of their life. A mortgage can also oftentimes be the biggest check you write out every month…typically for a period of 15 or 30 years! But, while it can be a nice feeling to pay off your debts and not be saddled with large monthly expenses, does it really make sense paying off your home mortgage?
It can – provided that you also know what you may be giving up. For instance, wiping out a five- or even a six-figure debt can definitely give you some breathing room in your monthly budget. This, in turn, could allow you to put more money into retirement savings or a college fund for your kids (or grandkids), or to take a nice, long-awaited vacation.
But, paying off your home mortgage early can also eliminate one of the biggest tax deductions that you may have. For example, based on the Tax Cuts and Jobs Act, most homeowners are allowed to deduct all of their mortgage interest each year on loans up to $750,000.
Depending on your situation, it could make more sense to consider making a move in order to reduce your monthly expenses. As an example, many people will downsize to a smaller home (and in turn, a lower monthly payment). And in some cases, you may have enough equity in your current residence (even if you still have a mortgage balance) to sell it and pay cash for another.
If you’re considering a move, give us a call and we’ll work with you to come up with a proper list price, based on your current home’s valuation. We will also market your property to a wide range of consumers and real estate professionals so that the right buyer can be found, and you can move forward with reducing your home-related costs.