Should You Pay Off Your Mortgage Knoxville Early?
When you buy a Knoxville home with a mortgage, it’s likely one of the largest debts you will have. This is why many Knoxville homeowners strive to get rid of their mortgage debt before tackling other debts.
But, should you pay off your Knoxville mortgage early?
Depending on your financial situation, it may not always make the most sense to pay off your Knoxville mortgage early. In this most, we’ll explore what factors you should look at to determine whether or not you should pay off your Knoxville mortgage early.
What Are Your Other Debts?
First, when it comes to thinking about paying off your Knoxville mortgage early, you want to consider what other debts your have. Most likely, your mortgage is your largest debt, but it’s probably the debt with one of the lowest interest rates.
While it may be tempting to pay off your mortgage because it’s your largest debt, it may also not make the most sense. Other debts, like credit cards, could carry higher interest rates, which is why it’s best to tackle these items first.
With mortgage rates being so low over the past years, generally, your mortgage is the last debt that you want to pay off. When you’re paying higher interest rates on other items, you should tackle those first.
What About The Tax Benefits?
When you think about paying off your Knoxville mortgage early, you risk sacrificing the tax benefits that come with having a mortgage, particularly the tax benefit of the mortgage interest deduction.
When you have a mortgage, you’re able to write off the mortgage interest that you pay on your primary residence. For many homeowners, this can be a huge tax write off that can make keeping a mortgage worthwhile. This is why many financial advisors do not advise you to pay off your mortgage early since it will benefit you on your year end taxes.
Would It Stretch Your Finances?
When considering paying off your Knoxville mortgage early, you should also consider what it would do to your monthly finances and if your money is better spent elsewhere. When you’re putting all of your money towards paying off your mortgage early, you may find it hard to pay your other bills.
Before considering paying off your mortgage early, think about if your money is spent better elsewhere. Are you putting enough money towards your retirement? Do you have enough savings should something go wrong in your life? If not, your money may be spent better elsewhere.
From an investment standpoint, your money may appreciate better if it’s put towards retirment, rather than put towards your mortgage.
What Is Your Reasoning?
Finally, when you think about paying off your Knoxville mortgage early, you also want to consider what your reasons are for doing so. For some Knoxville homeowners, the peace of mind of not having a mortgage can outweigh the costs of everything else.
When you consider paying off your mortgage early, consider what not having a mortgage will mean for you. Maybe you’re thinking about retiring and don’t want to have the cost of a mortgage. Or, you’re thinking about buying a second home and don’t want to deal with the cost of having two mortgages.
For some homeowners, it can be the simply they don’t want to be tied down by a mortgage. With your mortgage being your biggest bill, it can be nice to have the freedom to not have to worry about that expense.
Are you interested in buying or selling a Knoxville home this year? If so, please do not hesitate to let us know. Rick can be contacted at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.Com. Kati can be contacted at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.Com.