Article: When Does Early Mortgage Make Sense?
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When Does Early Mortgage Make Sense?
Early mortgage repayment looks on paper at least like a wonderful deal. If you have a typical mortgage and you are near the beginning of the mortgage term and make an extra $25 a month in principal payments, you could potentially save $25,000 in interest over the life of the loan.
Note: The exact amount of early repayment savings depends on the loan, but, in general, the apparent savings are astounding.
In spite of the superficial profit that seems to come from early mortgage repayment, it?s often not a good decision. The tragedy here is if you would have used that $25 a month to boost your individual retirement account, or IRA contribution, you would end up with $50,000 in your IRA account. If you would have used the $25 a month to make extra contributions to...
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