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Should Boston Homeowners Pay Off Their Homes Now?

In a previous post, we talked about the potential disadvantages homeowners may face when owning a house in full. But many Boston residents who are coming close to retirement, or generally have a few years of mortgage payments, might still be wondering if they should just pay off the balance on their home now, according to CNN Money.

While most are aware that mortgage interest is tax-deductible, there are a couple of other important factors Boston homeowners can consider when deciding whether they should pay off their balance sooner than later. These include the following:

  • Make other more critical financial needs a priority. Be sure to pay for your credit debt or 401(k) first. Individuals should have at least six months' worth of liquid expenses to handle emergencies, like unexpected medical costs.
  • Decide on how long you plan to stay in a home. It is not reasonable to put extra money into your mortgage if you plan to move into another home within the next five years.
  • Determine how much you can save in taxes by itemizing your deductions. Your tax savings decrease when you use more money to pay off the principal.
  • Consider investing money. For example, you will likely get a higher return from investing in stocks and bonds over the long run than if you pay off your mortgage. But if you are hesitant to invest a large portion of your money, paying off your home loans might not be a bad idea.
  • What will bring you less stress? If being debt-free will help you worry less, then you should consider paying your home loan as soon as possible.

To learn more about any legal issues that might arise when it comes to home loans, talk to a Boston real estate lawyer who can help you understand your rights and obligations regarding your mortgage.

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