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by ss Daniel Kamesh kamesh (2019-02-27)

People often say for example LoanDepot Review "if I pay an extra $200 a month it will save me $100,000 over the life of the mortgage." While this may be true, people fail to realize that $100,000 savings over a 30 year period does not have the same present value as $100,000 today. This is similar to someone who bought a house for $45,000 in 1968 that is now worth $300,000 and they can't believe how much it has gone up. The appearance is that the home appreciated substantially. But in this example, it is a compounded rate of only 5%. This applies to the question "should I pay off my mortgage." The perception is that the savings is substantially greater than it is. So, in theory, you should take any money that you would use to pay off your mortgage and invest it in more real estate, stocks, or a mutual fund. Sounds pretty easy. But the reality is that most people are not very disciplined. So for many people, making an extra couple hundred dollars a month payment may be a good idea. I'd rather see you pay off your mortgage rather than spend the money on frivolous consumer items. You just need to acknowledge that it is not the best investment decision. But sometimes that's OK. We all have our limitations.So if you find yourself asking the question "should I pay off my mortgage", you now have a basis for making an intelligent decision. If you are too tempted to spend that additional money or you want to sleep better at night, then by all means pay off the mortgage. Don't fear - it won't be the end of the world.