Sometimes the question arises that what is best option between growing on investment and paying off mortgage. Here I would like to suggest that one should take his own financial decision as per his or her circumstance. But, I will put my opinion in my own way as I see that staying out of debt has potential impact on anything I can do.
Somebody may speak rubbish when they tell you to stop paying mortgage since you forfeit your tax benefits on your mortgage. On the other side, some may suggest you to stop paying mortgage because you could utilize it for any high growth investment. This way, they suggest you the way to benefit from compounding interest. Instead of paying at low interest mortgage, you can invest in high return investment tools. This point of argument sounds good. But, you must understand that you will still be in debt. Therefore, it seems as if not having a mortgage is profitable than having one.
It is always wise to have sound resources of savings funds at your possession and pension plan like CPP. It could be risky sometimes when you undertake a long term mortgage taking it granted that nothing unpredictable would happen to force you take a big slice out of your savings fund. Therefore, what’s greater than having absolutely debt free? If you stay in a debt free status, you can build your wealth faster than ever. Otherwise, if any unavoidable circumstances arise, you may lose your house. A paid off house is an asset and a source of strength for you in time of economic crisis. You stay in control with it no matter what economic hard time goes on around you.
Nothing is better than owning a house without a mortgage. But, for most of us, the possibility is slim to none because we don’t have the patience and guts to think the other way. If anyone can sacrifice for a span of time, he can save up a lot to purchase a house without mortgage. Personal finance is always a mater of individual choice and mindset. There is no rigid guideline. So, one has to take up a way what he would feel comfortable to own his house.
This guest article was written by Patricia Briggs.
Author’s Bio:Patricia is a guest columnist, blogger, author for various websites and communities. She has completed her Post Graduation in Social Welfare from California University. She loves to write articles especially on topics like mortgage, loan, investment opportunities, monetary policies, etc.