No one wants to live in debt. It is only the credit card companies that want you to believe that buying and going into debt is good. The truth is debt costs you money, and it usually ends up costing you more than what you were buying in the first place.

That is not the dream most people envision when thinking about living in Fort Lauderdale luxury homes or another property of their choosing. So, if you get a chance to pay off your mortgage on Fort Lauderdale luxury homes, should you? Some financial experts say no.

Drawbacks in Paying Off Fort Lauderdale Luxury Homes

There are many pros and cons from various financial gurus on whether or not paying off a mortgage is the right thing to do. Of course, everyone’s financial situation is different, but there are six general reasons you might want to consider why Fort Lauderdale luxury homes shouldn’t be paid off early even if you have the means to do so.

1. Penalties
Some mortgages have prepayment penalties written in the contract so if you pay if off early you will have to pay more. Depending on the terms of your mortgage, there may be penalties involved with paying it off early.

  1. Debts
    Although your mortgage may be your biggest debt it is probably not the one with the highest interest rate. Pay off those credit cards, car loans, and other outstanding debt that is costing you more.
  2. Inflation
    Income typically adjusts with inflation and if you have a fixed rate mortgage, your payments probably will get easier to make as time goes on. Paying off your mortgage ahead of time may actually be harder and in essence more expensive for you than by just continuing to make the required payments every month.
  3. Emergencies
    Any good financial advisors will tell you to set aside an emergency fund so that you are prepared for whatever life may bring. Typically, it should total the amount of money you will need to sustain your cost of living expenses for 3 to 6 months. This should be saved for in advance of paying off extra on your mortgage.
  4. Invest
    Put your money to work for you! If you have extra money that you are thinking about adding to your monthly mortgage payment, consider placing that money into a long-term investment plan that could end up earning a lot more. Then right before retirement, you can use that to pay off the mortgage.
  5. Retirement
    Why not place any extra cash you have every month to bolster your retirement funds. Like the long-term investment strategy noted above, adding money to your retirement funds will help you build your nest egg for the future.

The Flip Side

Not all financial experts agree that holding on to a home mortgage is the best investment strategy. One point that is agreed upon by most investment planners is that paying off all debts, including a home mortgage before you retire is best for a more secure retirement.

If you really plan on living in the home after you retire, then do pay it off. Remember, even once the mortgage gets paid off, homeowners are still responsible for paying insurance, property taxes and maintenance on the property. This may not be a realistic goal for some retirees. Whatever you decide, just be sure it is a realistic goal and one that you and your family can reasonably afford.

Florida Realty News
Florida Realty News
Berkshire Hathaway HomeServices Florida Realty, a wholly-owned subsidiary of WCI Communities, has over 39 locations and more than 1,650 real estate sales professionals and team members serving 17 counties throughout Florida.
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