September 19, 2021

MP Now News

Mortgage News

Stop paying off your home mortgage early

Tim Sullivan

Owning a home is – and should be – a goal for many people. It’s a feeling of pride to own a piece of the American dream. It’s more than a place to call home. Birthdays are celebrated, dinners are served and gardens are laid out. If purple walls are the decor of choice, no permit is required, just some paint and sweat likeness. However, too many people associate home ownership with investing. So if extra dollars are found in the budget, “invest” them by paying back the mortgage. That has to stop.

First, consider a few things that a homeowner or home buyer should be doing.

1. Homeowners should have at least 20% equity in their home. For new buyers, this will likely mean a 20% deposit. Meeting this minimum capital target will ensure that owners are never submerged in their home, except in extreme circumstances. It’s not good to be underwater in a purchase, but certainly never one the size of a house. Failure to pay a minimum of 10% deposit can mean that a buyer may not be willing to make a purchase.