Money Matters: The Advantages of Paying Off Your Mortgage before Retirement

Multiple factors determine whether paying off your mortgage is the best choice for you.

After making mortgage payments for 15 to 30 years, nothing beats the sense of freedom of sending in the final payment so that you own your home free and clear. Historically, people were able to pay their home loan in full well before retirement; however, today many people find themselves still making mortgage payment well into their golden years. Some people needed to tap into their equity by refinancing their mortgage or by opening a home equity line of credit to cover medical bills or college costs, while others needed to pay bills during a period of unemployment. Now that the economy has recovered, what are the benefits of paying your mortgage before you retire and what are some strategies to achieve this goal?

Reasons to Pay Your Mortgage in Full before Retirement

According to MarketWatch, some of the reasons to make an effort to pay your home loan in full before you retire include:

  • Those who pay off their mortgage before reach age 65 reduce their annual housing expensing by two-thirds.

  • Retirees can still enjoy their homes without the risk of foreclosure due to missed payment that may occur during periods of illness.

  • Retirees who have paid their home loans in full have greater financial flexibility than those who are still making monthly payments.

If you plan to make extra payments to ensure your mortgage is paid off before retirement, you need to make sure all your high interest debt, such as credit cards, is paid in full. In addition, you need to ensure you do not incur any prepayment penalties.

To get expert advice about managing your mortgage, contact a local mortgage expert.