Should you be putting more money towards your mortgage to pay it off early?  I get this question every single time I sit with a client to talk about a purchase or refinance of their home.  There are varying degrees of answers unique to each person, however, this will speak to the vast majority of people that feel like the key to their financial future is to attack the monthly burden of a mortgage payment.  However, most of these same people push extra money into their mortgage without consideration of their overall financial health and goals for their future.  There is a lack of consideration for being properly insured for life and disability, lack of concern for adequate monthly savings for retirement to maintain what they consider to be a satisfactory lifestyle, or lack of concern with other long term financial concerns like higher education for their children.

The key here is looking at your full financial picture.  If you are applying $250 monthly to your mortgage principal what are you losing in valuable compounding of that money towards your retirement nest egg?  If you don’t have adequate disability or life insurance because you “can’t afford” it, what will you do if you or your spouse gets hurt and can no longer earn enough income to help pay your mortgage; what would happen to all the extra principal you had been applying if those life changing events occurred?  What are you losing in potential tax savings through the mortgage interest deduction, or are you the only person out there that actually enjoys paying more taxes?
Here are some questions you need to ask yourself?

  1. Do I have enough in my emergency fund?
  2. Am I insured properly to protect my family?
  3. Am I maxing out my Roth IRA?
  4. Am I participating fully in my 401K?
  5. Am I sure that I am currently in the best mortgage to meet my goals?

Even though our business is built on mortgages our focus is always your financial health.  With that in mind we work with several well qualified financial planners and insurance providers that we can link you up with to help you work towards your financial future.