My clients often ask me if it’s a smart idea to make additional payments toward the principal balance on a mortgage. The truth is, every person has different short- and long-term goals, and it’s a very personal decision.
Owning a home outright can be a huge financial advantage that offers guaranteed security. And, you can save thousands of dollars in interest fees by paying your loan off early. But, you’ll want to make sure you will not be adversely affected by prepayment penalties.
Some people prefer to use the extra money to create an investment portfolio. Or, you can consider paying off credit card debt, building an emergency fund, or setting money aside for your children’s college education.
What’s the best solution for you? A qualified financial planner can help you weigh out these options and make recommendations as to what choices make the most sense for you and your family.