Making major financial decisions, especially after your spouse or a family member passes away can be not only confusing, but difficult to process. In his new blog post, Michael Aloi explains why it is important to create a pros and cons sheet for paying off your mortgage. From reasons such as being able to still live in the house, taking a deeper dive into any remaining assets and potential tax breaks, these helpful reflection prompts will help you make the best decision for your family.
Key Takeaways:
- If the surviving spouse might need to sell the house soon in order to receive long-term care or move in with relatives, then it’s best to keep life insurance payments liquid.
- If the surviving spouse has enough other assets and cash flow, but does not want to take risks involves with the stock market, paying off the mortgage is the most conservative option.
- If the surviving spouse has an adjustable rate mortgage, paying it off now may avoid both a rate increase and the hassles and costs of refinancing.
“If a client wants to stay in the house, paying off the mortgage can provide peace of mind. However, it’s not a good idea to pay off a mortgage if that leaves the widow or widower house rich and cash poor.”
