If you are considering paying off your mortgage, please weigh the following facts before making a final decision. As with most things, there are positive and negative factors to be analyzed.

Should money be applied towards a mortgage or would it be more beneficial to invest the funds in bonds or the stock market? If market fluctuation makes you uneasy, consider prepaying your mortgage which will reduce your total interest expense.

As soon as you have reached mortgage equity of 80% of your home’s value or more, be sure to cancel your private mortgage insurance (PMI). Be certain to do this as soon as possible so that you will not be paying unnecessary premiums.

Peace of mind is always a prime consideration when considering paying off a mortgage. For some people, owning their home outright, is psychologically rewarding. This is a positive thing as long as it does not lead to high-interest credit card debt or at the expense of retirement savings.

Consider prepaying your mortgage while you are still employed so that you will not have to use your retirement funds to cover this expense.

Reasons not to pay off your mortgage debt:

The stock market, although it fluctuates often, generally offers a better return on your money than prepaying your mortgage.

If you prepay your mortgage, you will lose the interest tax deduction offered by the government. If you are in a high tax bracket, this could be very costly and the decision should be analyzed carefully.

Some adjustable rate mortgages do carry prepayment penalties. Be sure this is not the case with your mortgage before deciding to prepay. The cost of a penalty may negate any benefits you are anticipating from prepayment.