You planned on paying off your mortgage in the next five years, that is before you retire, but the markets current state is holding you back.
As 40% of your retirement savings have already suffered, you can only hope that the stock market will recoil so you will be able to recover what you have lost.
Can you actually afford to still pay off your mortgage before your retirement?
There are two reasons why you should pay off your debt and accelerate your mortgage payments especially in 2009.
But before I provide you with an explanation of those reasons, here are two important considerations that you might want to bear in mind before you pay off your mortgage.
Although there is one exception that Ill be writing about later, it is recommended that you pay off high credit card debts first as interest rates can reach at up to 30%. Clearing off your credit card bills before paying mortgage is yet the most practical action to take.
Another important consideration would be this: make sure that your 401(k) or retirement savings account contributions are updated. Although the stock market has not been doing so well during the last eight months, keep contributing to your retirement savings account so that you can still qualify for your employer matching contribution. This is like free money.
The move to pay off your mortgage when you have done all these will be the most appropriate step to take before you retire. And it is even better if you take action this year.
The best reason why you should own your home in retirement is that you would use your retirement funds only for property tax and maintenance cost. You don’t need to use your retirement savings to pay off your huge monthly mortgage bill.
Reverse mortgage allows you to get access to your retirement funds when you settle your mortgage before you retire.
With a reverse mortgage, you will be able to make use of your home equity and turn your home as a source of income when you retire. However, you may only enjoy this benefit if you have your mortgage account almost paid off fully.
Paying off your mortgage does not necessarily mean you have to make use of your own money to get your account settled early.
A new technique has been formulated to allow homeowners to pay off their mortgage accounts faster without them actually spending more or changing your lifestyle. Through mortgage acceleration, you get to slash at least 13 years off your mortgage. That means you save thousands of dollars that is supposed to be spent on paying mortgage interest.
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