Mortgage can be a headache and many people will rather rent for the rest of their lives than go through the mortgage process. You can just choose to skip the mortgage process altogether if you have the cash to spare. Buying a home with cash can get you a great deal from the seller because cash is king. More so, self-employed folks might find it somewhat hard to navigate the mortgage maze that seems skewed in favor of people employed in traditional 9 to 5 jobs.

However, if you don’t have the deep pockets to pay for a house in cash, you’ll need to dance to the tune of your mortgage lender to get your mortgage application approved.  Interestingly, your financial position might improve after you have signed up for a mortgage and you’ll suddenly have some extra money lying around.

When you become financially buoyant, you’ll be tempted to pay off the mortgage once or much quicker than the requirements on your term. This piece seeks to provide objective outlook on the pros and cons of paying off your mortgage earlier than required.

Pros 1: You’ll own your house earlier

The fact that paying off your mortgage earlier helps you own your home faster is pretty obvious that it shouldn’t even be an item in this post. Nonetheless, not having mortgage debt hanging like a dark cloud over your finances means that you’ll be able to free up more money each month. You can apply the extra cash toward other investments or improving your quality of life.

Reversal: Paying off your mortgage early means that you’ll have to bear the opportunity cost of other investments that you didn’t make. The money you apply towards paying of your mortgage early might be invested in other assets that could earn a higher return in the market. If you invest the money in order opportunities, you’ll earn decent ROI, pay off the mortgage eventually and you’ll still have some money left over.

Pros 2: Paying mortgage early earns you guaranteed returns

When you pay off your mortgage early, you own the equity over your home and owning your home gives you a guaranteed return. Real estate is one of the few “real” investments in the market because it is more tangible than paper assets.  More so, when you own your home, you know how much your property is worth per time and improvements in the housing market will yield an increase in the value of your investment.

Reversal: when you pay off your mortgage earlier than required, you are choosing to tie down all of your capital down in one place. If you are close to retirement, it might be a wise idea to tie all your money down but you’ll be putting down unnecessary roots if you tie money down even in your youth. More so, real estate is very illiquid and you never can tell when it you might need cash urgently and it is not easy to sell part of a house or sell off the whole house at a moment’s notice.