www.HowCanIRetire.net

Pay off the house and retire.

A great idea is to work out the mortgage early.

Your home is your castle.

You are going to retire in 15 or 20 years or maybe even in less time.

You know that your income will be dropping to a lower amount.

That mortgage payment will be tough then.

So what to do about it?  

If your interest rate is greater than a point above what you could get now with a re-mortgage, then it might be well worth getting a new mortgage but for a shorter time period.

Most mortgages today are so low that you can save as much as 3 or more points.
That adds up to a lot of money over the years.

Lately some banks are creating mortgages that can scale to a specific amount of time rather than for a fixed period such as 15, 20 or 30 years only.

If you are going to retire in 15 years, then a 15 year mortgage might work just fine but otherwise go shopping for the banks that will be more helpful as far as the time scale is concerned.

This is a new thing that is just starting to come about now with some banks.

Cut the amount of money that you will need in retirement now so that when it comes you will be in a good place financially. No mortgage is a good start.

Also, you could make more payments than needed while you are working and this can also bring your final payment to your retirement date.

Less time to retirement

If you are going to have to live on just a Social-Security check in 5 or so more years, then you had better do the math to see if it will work out for you with a mortgage payment as well as all of the other expenses to live after you have to retire.

You might consider the 30 year re-mortgage plan in this case but at a lower interest rate, therefore a lower payment. This could reduce your regular monthly mortgage to as much as half of what you are paying now.  

In the end, the bank would own part of your home, and it would hamper the ideal pay-offs to those who are inheriting from you a bit but it is still better than losing your home.

Part 3 - The other option

Plan to sell the house that you are living in now and either rent a smaller place to live in or buy a smaller house with the profits from the equity in your current home. That could easily equal no mortgage.

Now that the kids have moved out, and you only have the two of you living together, it might be the easiest way to live in the future.

In the end, what makes you happy is the most important thing to consider.

Later, Roger