Owning a home is a significant milestone for any adult. Obtaining a mortgage makes this dream achievable for many because it spreads the cost of your home over many years.
However, being mortgage free sooner than later can also be a source of pride. Let’s take a closer look at three good reasons why:
Increased financial flexibility
Imagine what you can buy and save if you can finish your mortgage payments early. With more disposable income, you can invest in a retirement fund, save for your children’s education or have more money for travel and leisure.
Reduced interest payments
Interest payments increase over time. If you can pay your mortgage earlier, you won’t have to worry about ballooning interest rates. Paying early can save you thousands of dollars in the long run, which you can allocate to other expenses or investments.
Improved credit score
Having mortgage payments impact your credit score. If you can eliminate it early, it can reduce your debt-to-income ratio, which helps in improving your credit score. A lower credit score can lead to better interest rates for other significant expenses you might have in the future. These big expenses include anything from a car to buying a second home.
Paying off your mortgage early offers numerous benefits, from increased financial flexibility and reduced interest payments to an improved credit score. However, if you struggle with mortgage payments or other debts, remember you have options.
In fact, you can even get a fresh start with bankruptcy. Consider speaking with a lawyer to explore your options and find the best path forward for your financial situation.
