Mortgages to Pay Off or Not?

Mortgage rates have been rising recently to about 5%. The lowest mortgage rate for 2010 was at 4.30%. I was able to refinance at 4.5%, pretty close to the low of 4.30%. My original mortgage rate was at 5.25% for 30 years, the refinance saved me about $200 each month..not bad.

I thought about selling some of my stocks and cashing out CD's to pay off my mortgage. I realized that it was a good decision to leave my money in the stock market. The stock market run has been nice with returns of about 15% for 2010 v.s. 4.5% by paying off my mortgage.

One thing to note about paying off your mortgage is that your actual mortgage rate is lower since you can deduct your mortgage interest on your tax return. So for example if your mortgage rate is 5% your actual mortgage rate is 4% because of your tax deduction.

The market isn't always going to guarantee a 15% or even a 10% return but it not very hard to make a 4% return.

Getting a Free Credit Score

If your in the market to buy a car or house then its crucial that you know your credit score and try to improve it as much as possible before you make your purchase.

For example my roommate who did not establish any credit at all was hit with a 20% interest rate for his car. That is more than double the average car loan rate. With a higher interest rate when buying a house you will be paying thousands more over 30 or 15 years.

Credit Karma gives free credit scores that are very accurate. You able to track your credit score and it will give you advice on how to improve your credit score.

http://www.creditkarma.com