Many buyers seeking out Brighton homes for sale dream of spending the rest of their lives in the home they choose. This dream often includes paying off the mortgage as soon as possible and living a debt-free life. While it's a noble goal, you might be surprised to learn that paying off your home early isn't always the best financial move. 

Our REALTORS® offer a few important things to consider as you weigh the pros and cons of paying off your mortgage ahead of schedule.

• Cost/Benefit Analysis
  In most cases, paying your mortgage off early will have a negative impact to your bottom line. The reason is simple. You're unlikely to save enough in interest costs to offset what you could have earned if you invested the money elsewhere. While the average mortgage rate still sits between 3 and 6 percent, the 10-year annualized return of the S&P 500 is close to 10 percent.
  
  However, there are also other risks to consider. Few people invest 100 percent in the S&P, and, of course, stock market returns are not guaranteed. It's quite possible that you could invest your extra money and lose your shirt. So how do you decide what to do with your extra cash?
  
  
• Liquidity Needs
  Before you allocate your money anywhere, you'll want to determine how much cash you need on hand to cover daily living expenses and unexpected emergencies. This is known as liquidity. 
  
  If you tie up all of your excess cash in your home or in retirement accounts, needing to get money out quickly could result in a big loss. Experts recommend keeping an amount equal to at least three to six months' worth of expenses in liquid assets, like a money market or savings account. If you don't already have a sufficient emergency fund, commit to meeting this goal before making any extra mortgage payments. 
  
  
• Spending Habits
  Those who tend to be spenders, rather than savers, might be the best candidates for paying a mortgage off early. If there's a good chance that you're going to blow through your extra money instead of investing it for the long-term, then go ahead and put it down on the mortgage. This could save you thousands of dollars in interest costs and help you build up equity in your home faster. 
  
  
• Personal Preference
  For many, owning your home free and clear creates a quality of life that's about more than just finances. If you really want the peace of mind, and you can do it without jeopardizing your financial future, then go ahead and start working on paying down your mortgage.
  
  Eliminating your mortgage payment, especially before you retire, can ease mental stress and make budgeting easier. You'll also have the option of accessing some of your home's equity in the future through a home equity line of credit (HELOC) if you need it. Remember, though, that this doesn't come without cost. Every time you take out a new loan, you'll have to go through the approval process and pay additional fees. 

Some Final Thoughts

Every person's situation is unique, and it often makes sense to consult with a qualified financial planner before making these types of decisions. This will help ensure that you're looking at the big picture and are making smart decisions based on facts, instead of on emotions. 

Are you ready to find the home of your dreams? We're here to help you do it. Contact Griffith Realty today to discuss your goals and get started!