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E M A I L U S AT N E W S T I P S @ A R I Z O N A R E P U B L I C . C O M O R C A L L U S AT 6 0 2 - 4 4 4 - N E W S ( 6 3 9 7 )
INVEST, OR PAY OFF MORTGAGE?
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HAL M. BUNDRICK NERDWALLET
Should you invest extra cash or use it to pay off your mortgage? It’s a heated debate that rivals French press versus pour-over coffee and “Star Wars” or “Star Trek.” But while all three topics might get passionate believers on both sides all worked up, investing or paying off your mortgage is a choice with serious financial consequences. Here’s how to know which way to go.
The six variables to consider To decide between the two, Justin Goodbread, a certified financial planner in Knoxville, Tennessee, suggests you consider six variables:
» Your home’s current market value » Your mortgage interest rate » Home appreciation in your area » Your income tax rate » Expectations for inflation » An assumed rate of investment return In an analysis on his blog, Financially Simple, Goodbread used national averages for these six parameters to compare different scenarios between investing and paying off a home loan early. The math on each of these what-ifs favored investing over paying off a mortgage. But, of course, Goodbread says the real answer to See INVEST, Page 6R
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