According to Franklin D. Roosevelt the safest investment in the world is real estate. Though, he has a few caveats to securing the safest investment on earth:
a. To be purchased with common sense.
b. To be managed with reasonable care.
c. To be paid off in full.
Given FDR managed to lead the US through the depression and World War II, I doubt he would be sympathic to the excuse of today’s house prices and cost of living paying off a mortgage. Here are three tips on how to make 'Paid Off In Full' achieveable:
1. Accelerate your mortgage payments. Try Bi-weekly (26 payments/ year) to decrease your interest and amortization period.
2. Take that Christmas bonus and apply it to a lump sum payment on the anniversary date of the mortgage. The allowed amount is applied directly to the principal.
3. Lots of people opt for a variable rate. You can set the mortgage payment as if you are paying a fixed rate. The extra funds you pay each month is directly applied to the principal reduction of the mortgage.
Why are you making financial sacrafice to your lifestyle to pay down your mortgage? Think long term gain to building your wealth.
1. To be debt free.
2. Your primary residence as its paid is with after tax dollars and not tax deductible. Mortgage payments to an investment
property can be written off as a tax deductible so focus on paying down your primary residence first.
3. My favourite and personal motivation, paying down your mortgage provides access to equity for other investment opportunities that can assist in growing your overall wealth.
Every mortgage agreement is a little different. There are typically limits to the amount you can repay and when additional payments can be made. Speak to your mortgage professional or lender to find out what is available to you.
"Real Estate cannot be lost or stolen. Nor can it be carried away. Purchased with common sense, paid in full and managed with reasonable care, it is about the safest investment in the world" - Franklin D. Roosevelt