Mortgage Mythology

Storms, Phil
April 2000
Journal of Financial Planning;Apr2000, Vol. 13 Issue 4, p46
Academic Journal
This article discusses the desirability of advising clients about making extra mortgage payments. In advising clients, factors like tax bracket, liquidity needs, retirement funding, educational funding and alternative investment opportunities are to be considered. Choosing between a 15-and a 30-year mortgage payments represents a similar situation to the extra payment scenario in that the client choosing a 15-year mortgage. The main problem is that many clients are entering retirement still have mortgages and are faced with some difficult choices as to sources of cash to repay the debt. A better alternative is to refinance with a longer repayment schedule even if the result is a higher interest rate.


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