DEAR BENNY: I am confused about paying off our mortgage on our primary home or on a secondary home/rental. My husband is totally against paying off either loan, even though we could pay off at least one of the mortgages. Our home mortgage has 10 years left at 5.25 percent interest and the other is a 30-year at 5.75 percent interest.

One of my girlfriends says you should definitely get your mortgages paid off, and yet another person who has his own business and is in his fifties says he is going to get the longest (30- to 50-year) mortgage he can get on his next home.

I don’t know what to do. I would feel much more secure personally if we had one of the mortgages paid off, especially our primary. I must say though that we may sell in the next couple of years and move our primary home to Florida. This is where the second home is. –Cynthia

DEAR CYNTHIA: You have asked perhaps the most difficult questions in residential real estate: Should I pay off my mortgage? And if so, when?

Some people like to have the comfort of having their home “free and clear” of any debt. Others — like your 50-year-old friend — want a large mortgage so that they can take advantage of the tax benefits.

But there is no easy answer. Personally, I believe in having a mortgage on my home. Why? Because over the years, my home will appreciate in value (notwithstanding the current real estate market). Let’s take this example. If my home currently is worth $300,000, conservatively speaking it will appreciate 3-5 percent per year. And this appreciation will take place regardless of whether I have a mortgage. So instead of paying off my mortgage, why not use that money for some other purpose — whether it is for personal travel, entertainment, or just to have it for that rainy day?

The more equity I have in my house — and assuming that the property will appreciate — the more it is “dead equity.”

I know that readers will differ with me, but that’s my opinion. You have to look to your own situation, as everyone has different issues and concerns.

In your case, because you plan to sell your current home in the next few years, I see absolutely no reason to pay off that mortgage. Use that money — if you so choose — to pay down the second home in Florida, which carries a slightly higher interest rate.

And here’s a suggestion: Instead of paying off the mortgage completely, if you can make one additional payment each year, you can reduce a 30-year loan down to approximately 22 years. For example, if your monthly mortgage payment is $2,000, each month add $166.66 (1/12th of the monthly payment) when you send in your check. But make sure that your check — and the coupon — clearly indicates that you are making an extra payment.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column.

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Filed under: Legal Advice in Common Scenarios, Mortgage, Real Estate Market, Selling, Tax Issues