What is the best way to pay off a mortgage?

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  1. The Finance Hub profile image36
    The Finance Hubposted 6 years ago

    What is the best way to pay off a mortgage?

    I don't have a mortgage but, I am planning on getting one. Any tips for paying one off?

  2. CraftingTime profile image72
    CraftingTimeposted 6 years ago

    Yes, I am a Mother. It is the most fulfilling job in the world.

    1. duffsmom profile image59
      duffsmomposted 6 years agoin reply to this

      What?  Your answer confuses me.

    2. CraftingTime profile image72
      CraftingTimeposted 6 years agoin reply to this

      wow, this was definatley posted under another question...im sorry, not sure how it got here.

  3. duffsmom profile image59
    duffsmomposted 6 years ago

    If I was going into a new mortgage I would try to get a 15 year mortgage, low interest rate, have a decent down payment, and the find a company where you can make payments online. 

    I would work on paying off all debts and any money that originally went to that debt - once it was paid off, I would start using that money for making payments on the principal balance.  If one is disciplined, it can be done. I would pour all extra money into the principal. The problem is--it is very hard to keep up because life happens and never having any extra money gets old.

    I figured out a plan that would have paid our mortgage off in 5 years.  But we would have not been able to deviate at all from the plan, all cash going into the repayment.  So we never made it happen--it was just too hard.  Medical things come up, water heaters break down - thing happen to take that cash right out of your hand!

  4. LandmarkWealth profile image79
    LandmarkWealthposted 6 years ago

    I would suggest to stick with the 30 year and just make extra payments.  Just one extra payment a year is going to shave 7 years off of a traditional 30 year fixed loan.  If you go with the 15 year ou lock yourself into the higher monthly payment.  The downside is oif you have a personal crisis in your life you may have trouble making the extra payment.  If the cash flow is there, than keep making the extra payments.  Virtually all home loans no longer have a prepayment penalty.

    In general make sure you satify other debts first like a car loan or especially credit cards.  They will not provide you with the same deductions as your home loan.

    1. profile image56
      Drewrposted 2 years agoin reply to this

      I agree with LandmarkWealth. I have been in the mortgage business for 12 years and I find it highly important to make sure you have a monthly payment that is comfortable if a personal crisis arises. You can always make extra principle payments.

  5. Margaret W profile image59
    Margaret Wposted 6 years ago

    Are you asking about paying off your house early. If so, I just wrote a hub on this topic. My advice is that you do not aggressively pay down your mortgage faster than you need to, especially if you purchase a home in this market with interest rates so low. Not to mention the possible tax savings you may get if you itemize deductions. And I would definitely get a 30 year mortgage not a 15 year, again, with interest rates so low, why be in such a hurry to pay it off.

    I would pay off any other debt before making additional principal payments on your mortgage.  If you have no other debt, then I would put any extra cash into either a high yield savings account (admittedly hard to find these days, but interest rates will come back up, guaranteed) or some other liquid asset or diversified marketable securities. In other words, save your money for a rainy day. That way if you lose your job, you can continue to make mortgage payments. Generally, you won't score any points with a lender by making advance payments on your mortgage. If you lose your job and discontinue payments, they'll still foreclose. And then you've lost all that additional equity you put into your house.

 
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