Nowadays, buying a home in Sandy and other areas around the world usually means the need to take out a mortgage loan. A mortgage loan is essentially money raised by individuals desiring to purchase property through lending institutions such as banks. The p
roperty to be purchased is placed as security against the loan. The terms and conditions of the mortgage involve an EMI of a stipulated amount to be paid back to the lending institution every month along with the interest.
To pay off or not to pay off?
When people take out a mortgage, explains City Creek, most consider refinancing it to keep the interest rates low till they pay off the loan over a period of 30 or more years. Some do not think of paying off the loan at all.
In fact, there are people who argue against paying off the mortgage. And yet, there are others who have an urge to be rid of the mortgage on their houses. These people are not wrong in thinking so, for paying off a mortgage does offer benefits. Besides, it is the right thing to do.
Save money
Perhaps, the most obvious reason borrowers would like to pay off their mortgages is to save thousands of dollars by way of interest money. When you take out a loan for a period of, say, 20 or 30 years, the interest amount adds up to a significant sum. By paying off the loan when you have cash in hand, you certainly can lower the overall cost of the purchasing the house.
Peace of mind
Another reason people would like to pay off their mortgages is to have peace of mind. This peace of mind comes in many ways-
– full loan repayment means no money is owed anymore.
– full repayment gives them complete ownership of their houses.
– a chance of unemployment after repayment no longer seems as terrifying.
So having read these benefits, are you considering paying off your mortgage loan at the earliest? It pays to be rid of loans, especially one as significant as a mortgage.