• Compare your mortgage interest rate to the rate you are earning on your investments. If you retain your mortgage because you believe you will earn more on your investment assets, make sure that is really happening. When paying off a mortgage, you are effectively earning a pretax return equal to your mortgage interest rate, which is a guaranteed return with no risk. Very few investment alternatives have a guaranteed return with no risk.

• Consider the tax benefits of the mortgage interest. Interest paid on mortgages with balances of up to $1,000,000 and on home-equity loans up to $100,000 is deductible on your federal tax return, provided you itemize deductions. You only benefit if your total itemized deductions exceed the standard deduction amount, which in 2009 is $11,400 for married couples filing jointly and $5,700 for single taxpayers. According to the IRS, approximately two out of three taxpayers use the standard deductions. Even if you do itemize deductions, you are paying most of the interest cost yourself anyway. For instance, if you're in the 25% tax bracket, you save 25 cents in taxes for every dollar of interest, but you're still paying the remaining 75 cents.

• Pay off consumer debt first. Consumer debt typically carries higher interest rates than mortgage rates, and interest payments are not typically tax deductible, unless it's a home-equity loan. Thus, you should probably pay off your consumer debt in full before paying down your mortgage.

• Consider which funds you would use to pay off the mortgage. If you are planning to use tax-deferred monies, such as those in a traditional IRA or 401(k) plan, to pay off your mortgage, those withdrawals could be subject to income taxes, which will impact your decision to pay off the mortgage. Financially, it is typically better to use taxable accounts to pay off your mortgage.

• Retain some savings. You don't want to use so much of your investment assets to pay off your mortgage that you have difficulty paying for unexpected expenditures.