mrTypically personal finance bloggers would tell you the joys of living mortgage free, but I’m here to show you why there are times you do not want to pay down your mortgage.

1) You are borrowing money at a low rate (30 year is currently around 4.25%), to throw all of your spare cash against your mortgage would be admitting you cannot earn a better return than your mortgage’s incredibly low rate (which is effectively even lower because of reason 2).

2) Mortgage interest is deductible and qualifies you for itemizing.

3) You could be investing in yourself with the extra money.  Maybe it would be better to improve your wardrobe or go back to college for a more lucrative or enjoyable career.

4) At times you have to “live in the now.” Do you really want to be a 32 year old that virtually threw away living from age 25 to 32 to pay down his 30-year mortgage in 7 years?

5) Make memories. Instead of throwing that extra $4,000 a year into your mortgage – take a trip of a lifetime with your spouse or a family member and gain memories that are priceless. Life is short.

6) If the housing market does have another downward trend – you might lose all of the additional equity, that you took from your savings and put into your mortgage. Now you possibly lost your deduction and your savings and have none of reasons 3 through 5 to show for it.

Think before you pay your mortgage down. I know it can be all so tempting to pay an extra 15% to effectively make a double payment – but remain opened minded to your options with that extra 15%.

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Filed under: InvestingReal EstateSaving Money

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