By Senior Advisor Andrew Schaetzke, CFP®.
For many people, their home serves as a place to live, where they raise their families, and as a store of wealth. From a financial perspective, their home is the single biggest asset for the average American.[1] Because of that, people often spend a lot of time considering the finances for their home.
One of the foremost financial considerations for most people when determining what home to buy is the type and terms of a mortgage. Many people have a specific repayment schedule on their mortgage over a time period often ranging from 10 to 30 years.
Sometimes, people have the ability to pay off part of their mortgage early. From a financial perspective, just because you have the ability to pay off part of your mortgage early doesn’t necessarily mean that would be best. The decision depends on many factors including:
Your upcoming liabilities
Your opportunity costs, such as your ability to earn a different return from investments
Your emergency fund
Economic conditions
Interest rates, and your ability to refinance
What would help you sleep at night
To help you figure out whether you should pay down your mortgage early, we provide the below resource. As always, we are here to help you throughout your financial journey. We can provide resources, experience, and strategies that may be valuable to you. Please feel free to reach out to us if you have any questions.
Important Disclosure Information & Sources:
[1] “Survey of Consumer Finances (SCF)“. Board of Governors of the Federal Reserve System, 2020, federalreserve.gov.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
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