Agent

No real benefit to paying off mortgage

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Q: Our condominium unit is now worth approximately $350,000, and we owe only $25,000 on our mortgage. We are from the old school, and want to own this property free and clear. We have the money, and are considering paying off the loan. Is this a good idea, and if so, how do we go about making sure that it is done correctly? A: The old school is a reference to our parents (or grandparents) who lived through the recession in the 1930s. Because the stock market crashed, and lots of people were unemployed, those who owned their home free and clear of any debt at least had a roof over their head and did not have to sleep in the streets or under the bridges. There are many people today with this same mindset, and while I personally disagree with this concept, I certainly respect and understand their views. Let me play devil's advocate. You have $325,000 in dead equity -- this is the difference between what your property is worth and what you currently owe. Three or four years ago...