There’s probably no bigger loan you’ll ever take out than your mortgage.
But others argue this isn’t the smartest idea.
At Two Cents, we cover a lot of posts that include some pretty standard personal finance advice.
However basic this advice may be, not everyone agrees with it.
And that’s okay, because sometimes, traditional advice is worth questioning.
You are getting closer to realizing the dream of a life with no house payments.
Remember, having absolutely no payments is totally within your reach!
Money ofBudgets are Sexyrecently touched on this topic.
Obviously, those savings are going to add up and will eventually lead to a higher net worth.
Money recognizes both sides of the coin.
The whole “helps you sleep better at night” key in of deal.
That’s a good feeling.
But some argue that good feeling comes at a price.
Why wouldn’t you take double the return?
Forbes contributor Rob Russell recently tackledthis topic, too.
A bank’s spread is the amount they loan out minus what they’re paying customers on deposits.
You should consider this number when thinking about paying off your mortgage.
How stable is your return?
Investing might make more practical sense.
And this might not only apply to mortgage payments, but auto loans, too.
However, this strategy does have an inherent risk.
Nothing is guaranteed with investing, even with an average rate of return.
It might not make sense to pay extra on your mortgage at the cost of giving up free money.
This might even be more, depending on the state.
Mind Vs.
Math
We’ve often write about howmoney has much to do with mindset.
Contributor Nancy Anderson suggests a method for having it both ways.
You take three to five years of your mortgages payments and invest them in a separate account.
Then, you could directly debit your house payment from that account.
But, speaking of mind over matter, J.
Money agrees that, sometimes, peace of mind can come at a price.
