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Are there any instances where paying off the mortgag is a bad idea?

by ozawa13 from Eagle, Idaho. 12 days ago Reply


Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,097 contributions

Not in my opinion, but many people will talk about losing the interest deduction, and paying off higher rate debt first.

11 days ago
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 1,904 contributions

Actually, Yes, there can be. Paying off your mortgage allows you to have no payment to make to the bank, and that could be good. However, if it takes most or all of your savings to do so, you would end up, what we call 'house poor'. All your equity is tied up in the home and if an emergency arises, you have no savings to dip into, so you must spend money and time you may not have to pull cash out of your home, Another scenario is that if you do not have the discipline to save monthly so you can pay the property taxes and insurance premiums when they come due. You don't want to let the insurance lapse because then if you have a fire, you lose everything and have no coverage to rebuild. If you forget to pay your taxes, you could lose the home to the tax man. Depending on your balance and you interest rate, it may make more sense to keep your hard-earned money and simply refinance into a smaller loan payment. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Licensed in Arizona, California, Georgia, Oregon, and Washington. Need help in other states? We've got you covered. NEXA Mortgage is licensed in 46 states ~ www.ApplyYes.com 480-889-9000.

11 days ago
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