Paying off your mortgage early saves you money on interest but it can also change your tax situation. Once the mortgage is gone you lose the mortgage interest deduction, which may reduce the total amount you can itemize on your tax return. That could mean a higher taxable income than you expected. You also need to consider other factors like property tax deductions and whether pulling money from a retirement account to pay off the loan creates a taxable event of its own.
A financial advisor can help you figure out whether paying off your mortgage early actually saves you money after accounting for the tax impact.
What Does It Mean to Pay Off…
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