Advertiser Sunrise Financial Answers The Question: ‘To Pay Off, Or Not…?’
BTB Advertiser Sunrise Financial Services wants to answer our Readers questions, and this month the question is “To pay off, or not to pay off?”:
To pay off, or not to pay off?
There are a lot of differing views on whether or not you should pay off your mortgage. It really comes down to 2 things: Your own personal comfort level and the numbers.
Some people are comfortable not having a payment and some people are comfortable having the money in their hands to write a check to pay off/pay their mortgage should the need arise.
Let’s talk numbers and RISK.
Scenario #1-pay off early- If you started with a $150,000 15 yr mortgage at a 5.5% interest rate you would have a payment of about $1226/m. After 15 years you would own your home free and clear.
Scenario #2-Hold a longer mortgage-Same mortgage, but a 30 yr payment of about $852. After 15 years you would have a balance of $104,000. But, you took the difference between the payments and invested it in a side account over 15 years, averaging 7%, giving you an account that you control and have access to anytime, worth over $118,000.
Let’s say that in the 15th year there was a large economic down turn (Ask us how some of our clients don’t participate in the downturns of the market) or you lost some or all of your income and you needed access to cash but loans are hard to get and/or time consuming due to the economy or you couldn’t qualify due to your income situation. (Sound familiar?)
Here is where the RISK comes in. Do you want to be left with the RISK of not being in control of your money or do you want to have access to it when and if you need it? As you can see, in #2 there is enough money to pay off the balance (and then some) or enough to get you through the hard times.
If it has been awhile since you have had your entire financial picture analyzed or you want to hear about our potentially “Safer Money Strategies”, call Sunrise Financial Services today for a no cost review.
2108 SW 152nd ST Suite B
Burien, WA 98166
Janice Hammond is a registered representative of and offers securities and advisory services through Madison Avenue Securities, Inc (“MAS”) a registered investment advisor, member of FINRA & SIPC. MAS is not affiliated with Sunrise Financial Services, LLC.
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