Should You Make Extra Mortgage Payments?

Suppose, for example, that you need a large sum of money quickly for a new car, a new furnace or some other unexpected, significant expense. Or, in an even more serious scenario, what if your job ends and you need money to tide you over until you get a new one? In these situations, you need liquidity – ready access to available cash. And your house may not be the best place to get it. You could apply for a home equity loan or line of credit, but these typically require approvals (which might be difficult if you aren’t employed), and you’ll be using your home as collateral. A home equity loan or credit line isn’t al- ways bad – under the right circumstances,

As you can see, you do have some good reasons for using any extra money you may have for purposes other than making additional mortgage payments. Ultimately, though, it’s a personal decision. In any case, think carefully about your choice. You may want to review the various trade- offs with a financial professional, who can possibly recommend the most advan- tageous strategies. And you may also want to consult with a tax professional. By understanding all that’s involved in the “extra payment” decision, you’ll be bet- ter prepared to make the right moves.

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