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Is it better to pay off a loan quickly or make standard payments?

I've been given conflicting answers to this question by JClemente from Vienna, Virginia. Mar 18th 2013 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Depending on your goals, then the answer can be different.. But my philosophy is "Cash Is King"... when dealing with credit card debt, most often the interest rate your paying is higher than what you would make on investments, so it's best to eliminate that type of debt first.. if you have no CC debt, and you want to know if it's better to pay off your mortgage quicker, then most financial planners will say NO!!!... Using your home as a secure financial investment is not very wise... Example.. You own a home worth $300K, but you've paid extra and paid down your mortgage to $40K.. And you lose your job, and have no income.. If you don't make payments, you lose your home.. How secure is that equity.. Same example, but all of a sudden you have children who need money for college, but you suffered a hardship and your credit suffered.. You paid your mortgage payments on time, but your other debt went behind.. if your credit is not clean, then you cannot borrow against your equity... Since rates are extremely low right now, you can borrow below 4% in most cases.. Your far better off putting your extra money in a brokerage account or some other type of savings, rather than your house... but, don't take my word for it.. Get with your CPA or Financial Planner and let him show you where your money is best placed.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Mar 18th 2013
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Jason Robinson (CFIsupport)
#56 ranked lender in Georgia - 106 contributions

Paying off your home loan is the end goal for most homeowners. Of course you will not have the interest deductions to write off on your taxes, but at the same time you will not be paying interest. Financially savvy individuals carry mortgage debt for this as well as other reasons.

Mar 18th 2013
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Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

Well that depends on your personal finance position and if mortgage intrest stays a write off on taxs. Best to speak to your accountant.

Mar 18th 2013
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George Dokos (georgedokos@movementmortgage)
#57 ranked lender in Virginia - 25 contributions

It is always best to borrow as little money as needed and to repay that money as soon as possible. The term of a loan is the most important aspect of your mortgage. By shortening your term you can save thousands of dollars in interest charges. Just think of a 30 year loan that has 360 payments vs a 20 year loan that has 240 payments. If your payment is $1000 per month the 30 yr loan would total $360,000. thousand dollars while the 20 year loan would only total $240,000 thousand dollars. The term is the key not the interest rate. The difference of an eighth of a percent on a $200 thousand dollar loan is only $14 dollars per month. people tend to focus on the difference of an eighth of a percent on their loan rather than concentrating on the term which is far more important in mortgage lending.I hope this helps. If you have any questions feel free to call me at the office, my direct line is: 757-645-0715Thank you George DokosLoan OfficerMovement MortgageNMLS 936626

Mar 18th 2013
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

Well that depends on your personal finance position and if mortgage intrest stays a write off on taxs. Best to speak to your accountant. Sorry couldnt be of more help......

Mar 18th 2013
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

Contact your CPA.

Mar 18th 2013
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Jericho Cherry (Jerichocherry)
#56 ranked lender in Virginia - 1,107 contributions

It depends on what you are trying to accomplish. I need more information. Please call me at 804-556-0685 or email me at jcherry@loansimple.com

Mar 18th 2013
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

Cash Is KING. Keep as much of it as you can. Let the last check you write on this earth BOUNCE. Best Advice Really.

Mar 18th 2013
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Michelle Curtis Loan Originator NMLS 401173 (MichelleCurtisLO)
#77 ranked lender in Florida - 2,245 contributions

This would be a lengthy discussion for all your financial professionals and you to have. You really need to find out how to move forward based on your goals.

Mar 18th 2013
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