Is it better to keep a mortgage

[Kazz]

Any opinions on if it is better to keep a mortgage all be it a small one? than pay it off?

I was planning on paying my mortgage off but have been told by a couple of people recently its better to keep a small mortgage....truth or falacy?

[Mags]

My daughter and her husband paid off the balance of their mortgage last year with 8 years still to go.

This link may help, Kazz.....

http://www.thisismoney.co.uk/help-an...&in_page_id=90

[Jac]

I really cant see the logic in that Kazz unless it's for the loan records. If you gofor a loan and there's no record of debt, ie mortgage then they cant score you. If you have no credit score you wont get a loan.

[Kazz]

Ta all Mags will look at the link Ta, there again the mortgage is so small I may just leave it be for a couple of years.

[dandysmom]

Depends on your tax laws. Here we can deduct mortgage payments if we itemize rather than take the standard deduction. My mortgage was paid off in 1985 and I was so happy to be rid of it!!! The peace of mind knowing you own the house free and clear was worth more to me than the deduction; plus you can invest the money you were paying....just my opinion .....

[charliebubs]

I can't think of any reason why it would be better to keep it

If I had the money I would pay mine off in a second.

Perhaps if you don't want to pay yours off Kazz, you could pay some of mine off!!!!!!

[Jane]

My mum was telling me about this the other day, she was saying if you pay it off early you get a load of extra charges because of all the profit the company will be loosing or something. That's what she told me anyway, but she is a weirdo sometimes :P

[Kazz]

Don't have the money to pay it off all at once but considering remortgaging at a fixed rate and reducing it to 5 years

[charliebubs]

Originally Posted by Jane

My mum was telling me about this the other day, she was saying if you pay it off early you get a load of extra charges because of all the profit the company will be loosing or something. That's what she told me anyway, but she is a weirdo sometimes :P

That is true to an extent!! If you pay your mortgage off during any fixed term that you agreed, then you would have to pay a redemption penalty which is usually about 3% of what you borrowed. This only usually applies for the first 2-5 years of the mortgage though, whilst you are in the fixed term period.

After that the bank can only charge you an admin fee for redemption, which is about £200.

[dandysmom]

Originally Posted by Kazz

Don't have the money to pay it off all at once but considering remortgaging at a fixed rate and reducing it to 5 years

Once again, I'm not familiar with the laws there; but here you can add an additional amount (say $100.00) every month to the regular payment and mark it clearly for principal only; that can reduce the term by years!