You probably didn’t know this, but 30 percent of Americans are mortgage free. It was not long ago when owning your home through credit was beneficial. However, many people are now opting to buy their homes without getting mortgage.

What are the pros and cons?

Just like all other financial decisions, this too has consequences. One of the major benefits is peace of mind. You will no longer have to worry about mortgage payments or foreclosure. Freeing yourself from paying mortgage allows you the flexibility of making other decisions like quitting your job. If you have the right financial discipline, you can also invest the cash you would have been paying for mortgage and get returns.

How will you pay off your home?

Many factors can be used to predict who will choose free and clear and who won’t. The first factor is home value. There is a direct relationship between how affordable the home is in a particular area and the ability to have the mortgage paid free and clear.

Age matters

The second largest factor we noticed is the borrower’s age. People between 65 and 85 are at the top of the list of being mortgage free. About 40 percent of people in this age group own free and clear. The reason for this is that the longer a person lives in a house, the more time they’ve got to clear their mortgage. However, even the younger generation is choosing to own homes free and clear.

Credit score is at times an indicator

About 45 percent of all people who own free and clear have a credit score between 800 and 900. You are probably wondering whether it is the excellent score that came first or clearing the mortgage. However, it can be assumed that people who have good credit tend to have self-discipline to pay off their mortgage. Also, if you pay off mortgage earlier you will get a better credit score.