Quote:
Originally Posted by Fairchild
Hi everyone--
Is there a benefit to paying extra mortgage payments to the mortgage holder vs. saving up the same money and putting in a MMA until enough is saved to pay off the mortgage?
Everyone always talks about paying an extra payment or more on their mortgage each year as being so great -- but, if we put that money in a MMA each year, wouldn't I have my original amount plus the interest I am earning, too? Do people not do this just because they are not disciplined enough to not spend it, or is there some benefit (interest-wise/tax-wise) to giving that money to the mortgage company each year?
Thanks -- we want to pay our mortgage off sooner than the 30-year term, but we want to know the best way to go about it.
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Here's two things to think about.
One: Will your MMF earn more than the interest rate on your home?
Two: Would you borrow on your house to invest money in the MMF?