Is it worth it to keep your mortgage, even if you can pay it off, to get the tax credit?
Many people believe that it is worth it to not pay off your mortgage because of the tax break that you receive for the interest you pay on your mortgage. So, is it wise to pay off a mortgage and not receive the tax break?
I'd say pay off the mortgage if you currently have enough money to do so and retain a solid emergency fund. The tax break is only a mortgage-interest deduction which means you can't write off the entire amount spent on interest each year. However, if you pay off your mortgage, you will not have to pay any interest!
My only warning would be to not empty out all of your life savings in order to pay off the mortgage. One of the hardest things I have seen is people who are house rich but cash poor. Meaning you have a $200,000 house that's paid for, but you can't fix the A/C unit if it goes out.
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