Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Here’s When You Shouldn’t Pay Off Your Home Early

Sponsored Content: A home mortgage can be the largest expense (and longest-running debt) in a homeowner’s budget. Paying it off and cutting that payment from monthly expenses can relieve a huge burden.

However, paying your mortgage early may not be worth it. Here are some reasons to consider both options.

Benefits of Not Paying Off Your Home

  • Mortgage Interest Tax Deduction. You can generally deduct interest on the first $750,000 of your mortgage if you got it after Dec. 16th, 2017 — and up to the first $1,000,000 if you got the mortgage before that date.
  • Credit Score. The diversity of your credit accounts affects your credit score. Once your mortgage account closes, it could potentially harm your score.
  • Prepayment Penalties. Some lenders may charge this fee if you pay off your mortgage soon after closing.

Cash Out Refinancing as an Option

If you want to keep your primary mortgage, you might be able to refinance and convert your equity into cash with a cash out refinance from Discover®or another lender.

For example: Say you have $100,000 left on your original primary mortgage amount of $250,000. If you get a $150,000 cash-out refinancing loan, you could pay off the old loan and have an additional $50,000 in cash.

You can use a cash-out loan for activities like:

  • Renovations/repairs
  • Boosting retirement savings
  • Creating an emergency fund
  • Investing elsewhere
  • Paying off debts

Benefits of Paying Off Your Home

  • Avoid Default/Foreclosure. If you are unable to keep up with monthly mortgage payments, your home could be foreclosed on.
  • More Budgetary Room. Your mortgage payment will continue to occupy a large chunk of your budget until it’s gone, leaving less room for other things.
  • Peace of Mind. Knowing you own your home outright and no longer have to pay hundreds to thousands each month is an amazing feeling.

Should You Pay Off Your Home Early?

Your mortgage is one of the few debts that may be worth keeping for its full term.

Keeping it lets you invest elsewhere and focus on debts with higher interest rates, keep your credit score up and potentially save a significant amount on your taxes.

However, some people can benefit from paying their home off as fast as possible. Always consider your personal and financial goals to determine if paying off your home early is the right move for you.

 

Contact Information:

Name: Michael Bertini
Email: michael.bertini@iquanti.com
Job Title: Consultant

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