Paying off your mortgage on a property...

[Yair Tapia]

Hello BP'ers. My name is Yair and I was listening to a podcast and the guest said that they NEVER pay off a mortgage on a property. Can you share the pro's and con's to doing this? I thought that was the goal so that you can make more from the property.?  did they mean an investment property only or the property you actually live in?

thank you all in advance.

[Nicole A.]

There is no right or wrong answer to this. It depends on your goals and your threshold for risk. The podcast may have been talking about investment and personal homes.

The argument for not paying them off is that if they are paid off, you have all this equity sitting there doing nothing for you. You could take that equity and purchase more properties. Also, when you have less equity, you're less appealing in a potential lawsuit.

However, some want the equity to have significantly less payments each month. Without a mortgage, one only needs to pay for taxes, insurance, repairs, capex, vacancies, etc.