As you may know from following my emails or working with me as your real mortgage consultant, I advocate paying off your mortgage quickly, often in as little as 5-10 years on your current income.
That is the best way to be financially successful – even when interest rates are going up.
However, I came across an article that says you shouldn’t pay off your mortgage early when interest rates are rising.
I actually do have a point of agreement with this article.
For example, it says that you do not want to pay off your mortgage until you have paid off your higher interest debt, such as credit cards.
Of course, I agree with that.
What I teach my customers is that the typical family can pay off all of their loans and become completely free of all loan payments, usually in as little as five to ten years on their current income, including their mortgage.
Focus on one loan at a time, pay it off, then move on to the next one.
The mortgage is usually the last loan to pay off.
Credit cards will usually be first.
So, yes, start by paying off higher interest rate credit cards first – then pay off the mortgage.
One point where I disagree with this article is where they say that you want to keep your mortgage and use that money to invest in higher-return investments.
That advice ignores one very critical issue.
You are not comparing “apples to apples” – or, in other words, you’re not comparing the same types of investments.
Even though you can potentially earn more in, for example, the stock market, it comes at a higher risk. You could also easily lose that money.
The potential higher return comes with a much higher risk.
On the other hand, paying off your mortgage is safe, and it is a guaranteed return on your investment.
As a real mortgage consultant who is educating my customers that following the traditional advice of a typical run-of-the-mill loan officer is not the best way to financial freedom, I show how to use the right plan effectively.
Follow the advice of most people and you will end up where most people do, part of the 95% of people who fail financially.
Do what the 5% who succeed do, and you can be financially successful too.