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If you’re weighing this big decision of whether to pay off your mortgage or invest, I’m going to give you a few main points to think about, so you can make the right decision for yourself and your future.
First, you should know that while there are many benefits to paying down liabilities, you’re not making your money work for you in this scenario. You’re just dumping all of your extra funds into paying down a loan. You’re giving it all to the bank. You might see better results through buying performing assets that produce income, depending on your personal situation.
Consider the interest rate on your mortgage. Are you locked into one of those historically low rates? If your rate is in the 2-4% range, maybe there’s no rush to pay it down? It’s up to you to decide, but you’ll probably never snag a mortgage at that rate again.
Ask yourself how much the burden of your mortgage is weighing on you mentally. Some people have higher debt tolerances than others. If the thought of carrying this debt for 30-years is disrupting your sleep and hurting your health, prioritize paying it down.
What kind of returns can you expect on a real estate investment? At Morris Invest, our build to rent properties offer an IRR of at least 18%. Personally, I find that hard to turn down. But if you’re looking at a deal that is a questionable investment, maybe you could pass for now and work on paying down your mortgage first. Never fudge the numbers when you’re buying an investment. This isn’t the time to hope for the best. Analyze your deal and weigh it against the interest rate on your mortgage.
Ask yourself this: why can’t I pursue both goals at the same time? Calculate how much extra cash you’re working with every month and determine if there’s a way to split the funds up between two goals. Maybe you could just throw a couple hundred extra dollars toward the principal balance on your mortgage or make an extra payment every month… and then use the remaining funds to save up for performing assets like real estate investments.
Another idea is to focus on buying rental properties first. Then as you build up cash flow over time, you can use it to fire at the balance of your mortgage.
At the end of the day, there’s no right answer to financial questions like this. Choosing whether to pay off debt or invest is a very personal decision. You’ll have to weigh the pros and cons for yourself, run the numbers, and determine what will have the biggest positive impact on your life. So while I can’t give you the answer, I hope this video gave you some key points to think about.
How to Pay Off Your Mortgage in 5 Years: [ Ссылка ]
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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