So, why SHOULD you pay off your mortgage faster? The interest rates are historically low and there's even talks of inflation. Is it worth paying off your mortgage?
Well, it's true that the interest rates are really low but what most homeowners don't realize is that there a TWO distinctive TRAPS that can keep you stuck in your mortgage - perpetually paying interest over and over again.
So here are the Two Traps...
It is estimated today that the average American moves 11.7 times in their lifetime. This could be due to new job opportunities, political changes, moving out of the state to avoid taxes, or even life-events such as downsizing.
Let's assume that most people live 80-100 years. That means that the average person moves every 7-10 years.
If you look at any mortgage amortization chart, you'll notice that bulk of the interest (if not all) is paid in the first 10-15 years. Bottom line, if you make it to the 10 year mark on your mortgage and choose to sell, move, buy a new home, and ultimately get a new 30 year mortgage, vast majority of your new payment is yet again going towards interest payments - not principal.