I would like to pay off my mortgage; should I pay it off before retiring?
And also, I have a long way to pay off...30 yrs?
Answers | 5
Hi - You don't say how old you are or when you plan to retire so here are a few questions to ask yourself: 1) Is this my retirement home? The home may be suitable now, but how about for the long term? 2) is the mortgage affordable now? Will it be affordable based on my expected sources of retirement income? 3) What does my cash flow (income and expenses) look like in retirement? 4) If I were to pay it off before I retire, how will I do that - extra principal payments, lump sum, other? In my experience, the best and simplest action someone can take to pay their mortgage off early is to use a bi-weekly payment plan - that means you are making half of your payment every two weeks instead of one payment per month. The end result with a bi-weekly payment is that you make 13 payments every year instead of only 12 (paying by the month). This will usually knock 9 to 10 years off your 30 year payment schedule (pay a 30 year mortgage off in 20-21 years instead of 30) and save a boatload of interest. There are several websites with mortgage calculators you can visit it get a good idea of the possibilities. A good one is right here on MoneyTips. Good luck!
With interest at or below inflation, I would leverage as much as you can as long as you can. However keep in mind at age 62 you qualify for a HECM as long as you have 40% or more equity in your home. This will allow you to pay off your mortgage for good an replace it with a loan that never requires payment until you pass away and its guaranteed never to exceed the value of the home. FHA insures you will always have a minimum of 10% equity in the home, no matter what. To top it all off, the rate is currently at 2-2.5% and with us, you wont pay any origination fees.
Monte, you should absolutely payoff your mortgage before you retire, and the sooner the better. Payoff all other debts first, and then set aside an emergency fund that will cover 3-6 months of expenses, then put every spare cent into paying that mortgage off FAST. You will be surprised how quickly it will go once it becomes your main focus. I did it in 5 years. Good luck.
Good Morning, My question is about (QRP) Qualified Retirement Plan. I have a TSP that I will be rolling over to IRA account from early retirement. I have my own business. What would you recommend? I was look at a Solo 401K Self Direct IRA.
im 52 got hurt at work cant work anymore wont to pay off house for my kids i only get ssc cant afford the payment