Friends of ours mentioned something about the economy in passing, a topic that is almost always too good to pass up. Or too hot to handle!
Paying Their Mortgage Down Quickly
Turns out that they have lived in their home for seven years and have been making extra payments on their mortgage for most of that time even as kids came along and an invalid cousin came to live with them. “Steve” has done very well in business while “Janet” takes care of the home.
We soon learned that the wife had received an inheritance, money they weren’t sure should be used for anything but paying off the mortgage. Neither one is particularly fond of debt and could care less about the tax advantages to owning a home — they just want to own their house free and clear!
I can appreciate the way that Steve and Janet think because I agree that home ownership is one burden that should be overcome as soon as possible. Instead of dragging out a loan for thirty years, why not pay it off sooner? Besides, the quicker it is paid off the less money owed to the bank.
The Political Landscape Is Murky
With the way things are going in Washington, DC a lot of homeowners are worried about their home values, mortgages, debt, you name it. Housing values in some areas of the country have dropped like a rock over the past year with the national average down to around $170,000. Many Californians who have faithfully been making mortgage payments are under water — owing more on their mortgages than what their homes are worth.
Each market is different and every family has their own requirements and priorities. But, if you could lower your housing costs would you? Among the ways that you can go about doing that is by paying off your mortgage early; refinancing to a lower, fixed rate; selling your larger home and settling in a home that meets your current needs; and even seeking a property tax cut or trimming your homeowners insurance.
Decisions, Decisions: Yours For The Making
Of course, if you aren’t certain which direction to turn, consult your financial adviser. Most will tell you to hang on to your mortgage, but that’s one decision you’ll have to make and live with, not them.
Photo Credit: Svilen Mushkatov
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