For many people, the American dream isn’t just owning a home—it’s also paying off the mortgage.
But why is it important to own a home outright? Is there anything wrong with having a mortgage? Sure, not having a monthly payment is a big part of it, but in reality, having a mortgage can actually be good for you. Here’s why:
Having a mortgage is good for your credit. Having a mortgage shows that you’re a responsible borrower, which is important if you plan on buying another home in the future. Your payment history is 35 percent of your credit score and having a mortgage can help you increase your score, as long as you make your payments on time.
You can take advantage of the tax deductions. For most homeowners, the mortgage interest tax deduction is the single largest deduction claimed. Although not having a mortgage payment but losing out on the tax deduction may seem like a good trade-off, that’s not always the case as it may not make financial sense for every homeowner.
You’ll have greater liquidity and flexibility. Using a large portion of your monetary assets to pay off your mortgage may limit your flexibility. By paying off your mortgage, you may have a lot less cash for other big expenses—such as paying for college, getting married or an unforeseen medical condition—that may crop up in the future.
You can take advantage of investment opportunities. Since many homeowners have a mortgage with a low interest rate, keeping that mortgage and investing capital elsewhere may be a good decision. In other words, if a return on an investment will yield more than what you’re currently paying in mortgage interest, then it may be wise to take that investment opportunity and keep your low-interest mortgage.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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