Residential Market Commentary - The mortgage is paid. Now what?

  • First National Financial LP
For the most part mortgage brokers are there for their clients at the beginning and through the middle of the journey to home ownership.   

At the outset a broker can help set financial parameters and hunt down a mortgage that matches the needs and wants of the buyer. Throughout the life of the mortgage a broker can aid in making adjustments to match the client’s changing situation. 

But eventually, the mortgage will be paid off and the relationship will come to an end.  The broker will carry on serving other clients and the homeowner will have a new and, hopefully, freer financial situation.  So, what to do with the money that is no longer going toward the mortgage?

Most homeowners already have a financial planner and consulting with them is a sound first step.

A key task will be figuring out just how much money has been freed up.  Often mortgage payments also include property tax payments and life insurance premiums.  Those kinds of costs will be ongoing and will take a bite out of the mortgage-free savings.

There should also be an assessment of anticipated home ownership costs.  Improvements, maintenance and repairs should be planned for.  Things like roofs, appliances and heating and air conditioning can be major expenses if they need to be fixed or replaced.

The new cash flow is an opportunity to pay down other debt, especially high interest debt such as credit cards.  Paying off the mortgage is also a good time to re-examine retirement savings, investment strategies and estate plans.

Related Articles

All articles