Five Factors in Deciding Whether to Pay Off the Mortgage Early

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Consider these 5 factors in deciding whether to pay off a mortgage early:

Do you have at least 18-24 months of living expenses in liquid assets?  In the event you lose your job, incur a substantial and unforeseen expense, or become temporarily disabled, you will need liquidity; and given the current economy and jobs market, it would be wise to be conservative.

Do you owe more on your mortgage than your property is worth? If yes, then consider the benefits and enjoyment derrived from that particular property, and whether you would be willing to buy it again for more than it is currently worth.

Do you have any debt other than your mortgage?  If yes, then it might make sense to try to pay off that debt before paying off the mortgage.

Could you get a better return on your money if you invested it elsewhere? Paying off a mortgage early is an investment decision, which should be compared with the risks and rewards of other available investment opportunities.  For example, if an employer matches employee retirement contributions, the employee should maximize those contributions.

Does the burden of the mortgage cause undue stress?  If you find yourself losing sleep and worrying about how you will ever get out of debt and pay off your mortgage, then paying off the mortgage early could provide some peace of mind and security.

In summary, whether to pay off your mortgage early boils down to a personal decision, which should be based on several considerations.

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