Page 28 - May 2022 Issue.indd

Should You Make Extra Suppose, for example, that you need a large
sum of money quickly for a new car, a new
Mortgage Payments? furnace or some other unexpected, signifi -
cant expense. Or, in an even more serious
Submitted by Ann Jacobs, Financial Advisor, scenario, what if your job ends and you need
Edward Jones - Denton 410-479-0271 money to tide you over until you get a new
one? In these situations, you need liquidity
– ready access to available cash. And your
You might enjoy owning your home – but the mortgage? Not so much. In fact, house may not be the best place to get it. You

you might want to do everything you can to pay it off as quickly as possible. could apply for a home equity loan or line
But is that always the best strategy? of credit, but these typically require approv-
als (which might be difficult if you aren’t
In one sense, your mortgage can be considered a “good” debt because it’s backed
employed), and you’ll be using your home as
by a tangible asset – your home – that has real value and may even gain further
collateral. A home equity loan or credit line
value. Furthermore, by historical standards, you’re probably paying a pretty
isn’t always bad – under the right circum-

low interest rate on your mortgage, so you’re getting a lot of benefit – a place
stances, it can be a valuable fi nancial tool.
to live and a potentially appreciating asset. And if you itemize on your taxes,
But that doesn’t change the basic fact that
you can possibly deduct some, or maybe all, of your mortgage interest.
your home is essentially a non-liquid asset.

Nonetheless, despite these benefits, a mortgage is still something you have to
So, instead of making extra house payments,

pay, month after month and year after year. And for some people, it may feel

make sure you have built an emergency fund

good to pay it off . After all, there may well be a psychological benefit to being

containing several months’ worth of living
free this long-term debt. But is it really in your best financial interest to make

expenses, with the money kept in a low-risk,
extra payments?
accessible account. After building an emer-

gency fund, you should weigh extra mortgage
payments against other uses of your money.
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For example, if you have other types of debt
– such as credit cards or student loans – you
might want to work on paying those off more
Compare our CD Rates quickly, as these debts may also carry higher
Bank-issued, FDIC-insured interest rates.
% APY* Minimum deposit You might also consider increasing your
1-year $1,000.00 contributions to your 401(k), IRA or other
retirement/investment accounts. You could
$1,000.00 so it’s important to save as much as possible
3-year % APY* Minimum deposit spend two or three decades in retirement,
$1,000.00 As you can see, you do have some good
5-year % APY* Minimum deposit for those years
reasons for using any extra money you
Call or visit your local financial advisor today. may have for purposes other than making
additional mortgage payments. Ultimately,
Ann M Jacobs, AAMS®
Financial Advisor though, it’s a personal decision. In any case,
think carefully about your choice. You may
105 Franklin St
Denton, MD 21629-1207 want to review the various tradeoffs with
410-479-0271 a financial professional, who can possibly
recommend the most advantageous strate-
gies. And you may also want to consult with
* Annual Percentage Yield (APY) effective 4/14/2022. CDs offered by Edward Jones are
bank-issued and FDIC-insured up to $250,000 (principal and interest accrued but not yet paid) a tax professional. By understanding all that’s
per depositor, per insured depository institution, for each account ownership category. Please
visit www.fdic.gov or contact your financial advisor for additional information. Subject to involved in the “extra payment” decision,
availability and price change. CD values are subject to interest rate risk such that when interest you’ll be better prepared to make the right
rates rise, the prices of CDs can decrease. If CDs are sold prior to maturity, the investor can lose
principal value. FDIC insurance does not cover losses in market value. Early withdrawal may not moves.
be permitted. Yields quoted are net of all commissions. CDs require the distribution of interest

and do not allow interest to compound. CDs offered through Edward Jones are issued by banks This article was written by Edward Jones for use
and thrifts nationwide. All CDs sold by Edward Jones are registered with the Depository Trust
Corp. (DTC). by your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC
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