Home Mortgage Loan – Benefits of Paying Off Your Mortgage Early
The chances are pretty good that you biggest monthly obligation is your home mortgage loan payment. This is the one thing that seems to take up most of your available income.
Why paying off your mortgage early make sense
No one knows what the future holds. Just because you are working right now and able to make your monthly mortgage payment, does not necessarily mean that you will still be able to a few years from now.
You could get hurt, sick, or lose your job, allow which will impact your ability to earn a living.
By adding twenty or thirty dollars to your mortgage payment each month you will have bought yourself some time.
This will increase the chances that the bank will be willing to work with you if you are in a position where making your payments is difficult.
The extra money you add to your home mortgage loan payment each month will go to the principal of the loan. The faster you pay off the principal, the less interest you are going to pay overall. This means that the sooner you pay your house off, the less it is going to cost you.
No one plans for the fact that the value of their home could decrease, but that is exactly the position that many people currently find themselves in.
The downturn of the economy means that no one is purchasing houses, which means that many people who need to sell their house find that they actually owe more money for their home than the home is worth. This puts them in a position where the simply cannot afford to sell.
The home equity loan factor
There seems to come to a point in every person’s life when they need a little extra money for something. The house is one place where this extra bump in cash can be found. Bank has something which is called a home equity loan.
This means that you have paid off enough of the principal of your mortgage for the banks to feel comfortable approving you for the loan, if you default on your loan, they can foreclose on your home. The more money you have put towards the principal of your mortgage, the larger a home equity loan you will be able to apply for.
Peace of mind
One of the most compelling reasons that most people find for paying off their home mortgage loan early is peace of mind.
Knowing that they will eventually own their home free and clear and not have to worry about the bank being able to take it from them is all the motivation they need to come up with a little extra cash each month that they put to their mortgage.
It does not take much money to make a difference, just ten or twenty dollars each month will add up sooner than you can imagine.