Should You Pay Off Your Mortgage Early? Maybe Not

If you're able to pay off your mortgage early, should you do it?

It seems like a simple decision, but there are actually many sides to the story. CNBC asked several advisors to weigh in, and they came up with a number of pros and cons.

When it's wise to pay it off

"I recently talked my own mother into paying cash for a new home, as she is entering retirement," said Elizabeth Grahsl, certified financial planner and vice president at Prosperity Bank. "The downsides are that she has to recognize a fair amount of capital gains to sell enough assets to pay for the home outright … [and] she'll lose the mortgage-interest tax deduction."

But the downsides are nothing compared to the interest and closing costs she'll save, said Grahsl, compared to even a 15-year mortgage.

Coping with Debt When You're Laid Off

Until the right "help wanted" ad appears, today's pink-slipped workers may benefit from posting their own "help wanted" appeal.

Creditors may agree to ease loan terms when workers need the help to survive a jobless spell.

Sounds simple -- seek and ye may receive. And, lenders routinely encourage contact at the first sign of trouble. But credit experts warn: Have a plan before you plea.

The bill pile 

Some workers are entering unemployment with savings, little or no debt, and a solid credit record. Others begin their layoff with less enviable positions on one or all three fronts.

Begin by plotting how long your resources will cover your basic living expenses -- mortgage or rent, food, transportation, food, utilities, insurance.

Advantages And Disadvantages Of A Second Mortgage

What is a Second Mortgage? 

It’s simply another mortgage on your home. The term “second” means that the loan does not have priority on your home in case you default. Instead, your first mortgage (typically the loan used to purchase your home) has priority and that loan would be paid off before any funds go towards the second mortgage.

 So why would somebody risk their home with a second mortgage? These types of loans are appropriate for times when you need a lot of money. And it's not like most have us just have money lying around.

 Assuming you've paid off part of your home loan or your home's price has risen, second mortgages allow for bigger loans because the lender considers a loan against the home to be safer as the home serves as collateral.