If you had to prepay the mortgage it would have been comparable to the equivalent of investing the money at the same rate at which you’re currently paying the loans off. Managing debts with a close assessment of personal finances is required whether it makes sense or not. You might ask these questions if you have extra cash available.

Can the extra payments be afforded by you conveniently?

First you should question yourself about how would you respond if an unforeseen unemployment occurs at your home? Do have everything planned out in case of any emergency or abrupt and sudden expenses? If we talk about the present state, even less than 30% of the population has cash kept aside for unpredicted situations and unanticipated expenses if any member of the household lost their job for even a short span of 3 months. In the ideal circumstances, one should keep aside cash for the time span of 6 months in case of any emergency or disaster.

If you do this, and still have a good amount of cash to dispose of, then you can very well make use of it to pay down your mortgage or loan. A tip: it is always better to not involve any outsider for this purpose. In fact you should resolve to do this on your own by writing an extra check every month to the lender and imply that the cash should be applied to the capital being received. Refrain from mixing this additional money with the regular monthly mortgage, this way you can easily follow up your payments if you ever need to.

Is it possible to get an ameliorated return on your these investments if you use it for some other purpose?

If you find an option which gives you far better returns on your investment as compared to the monthly debt disbursements, then you should definitely opt for that option. For instances stocks or mutual funds will ensure you better returns. Make sure that you are taking up every opportunity you get for financing your retirement financial record. It is imperative to take benefit of every opportunity that is available to you. Retirement financing is a priority, paying off early is not.

If you decide to pay in advance, will you be losing a tax reduction which is of benefit to you?

If you know for sure that you will be able to have a higher income once you pre-pay, then this issue is not so important. If you can save more by paying in advance then go ahead.

Is there any likelihood that you will be changing your place of residence any time soon?

If you have a plan of shifting your place of residence soon then this particular pre-paying option is not exactly viable for you. It serves you no particular good so it is better to not consider it going for it.

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