Personal Finance

When Is Paying Off Your Mortgage the Right Move?

Reported by Sharon Epperson, written by Michelle Lodge

In most cases, a financial adviser will recommend not to pay off your mortgage ahead of time.

But when it does make sense to break that rule, it could mean a new and better retirement.

A case is point is that of Anthony and Ann Granato, of Sea Girt, NJ,

who plan to retire next year and want to travel more starting then. Ann is a currently a director for Horizon Blue Cross, while Anthony had a second career selling real estate after he sold his auto repair business.

Like many Americans, for the Granatos, the second half of 2008 was a rude awakening. “When you start talking in hundreds of thousandths of dollars of retirement money that you are losing, then your house isn't worth anywhere near what it was worth and you lost a lot of money in the stock market,” said Anthony Granato, “and it’s very scary.”

However, with the help of certified financial planner Doug Lockwood, with Harbor Lights Financial Groupin Manasquan, NJ, the Granatos found some answers that put their particular situation in perspective.

The Granatos were fortunate in some cases. Unlike many Americans, their only outstanding debt was the mortgage on their house. They had no loans—neither home equity or auto—nor credit card debt. Once Lockwood helped the Granatos crunch their numbers, he concluded: “Why not be financially free by paying off that mortgage?”