Money Minute: Should you pay off your mortgage faster?
PITTSBURGH (KDKA) - Isn't it a great feeling when you finally pay something off that has been hanging over your head?
Well, when it comes to your mortgage, perhaps it's better to keep making payments instead.
I remember how excited my parents were when they finally paid off their mortgage when I was a kid.
You can do that sooner by making an extra monthly payment each year or adding a little more to pay the principal each month.
But...is that the smart thing to do?
If you have a low-interest loan, it's probably smarter to use that extra money to pay off other debts like credit cards or car loans, which carry much higher interest rates.
When my wife and I refinanced our home a few years ago, we did a 30-year mortgage at a very low-interest rate.
Even though it's unlikely we'll be around in 30 years, unless we move, we'll never pay off the house - as my parents did.
So what?
A lower monthly mortgage rate gives us extra cash each month for something else.
Now, situations always differ, but paying off your mortgage pay-off is not always the best thing to do.
