Some homeowners just do not like having a mortgage and will try to pay it off as quickly as possible. Doing this could be very beneficial for some homeowners, but for some, it could be a mistake. For one thing, pouring money into your mortgage can present you with a liquidity problem. If you lose your job, or become temporarily disabled and unable to work, you may not have the ability to access your home equity. You may try to take out a home equity loan, but if you are out of work you could be denied. If it is approved, you will be adding debt while unemployed or on a fixed income. Instead of making extra mortgage payments, consider investing the extra money in more liquid options that offer growth potential or current income.
Some shorter term and lower risk options to maintain liquidity in your cash would be; a Roth IRA, money market accounts, high yield online savings accounts, certificates of deposit, short-term bonds, or paying off higher interest debt. Combining multiple investment options while still putting extra money toward your mortgage will also be a good strategy, that way you can pay your mortgage off faster and still grow your investments, allowing you liquidity, and a shorter road to debt free living!
When balancing your debts and investments, it is important to consider multiple angles so you can find what works for you, and which options will make your money go further.
At CreditServices.com, our credit advisors will not only coach you throughout the process of repairing your credit, but also teach you valuable tactics that will provide you with a solid foundation for your future purchasing power.
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