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.
Forty percent of your retirement savings have been slashed since last year. This is enough to entice you to take more risk in investing in stocks, cross your fingers, and wait until the market rebounds so youll be able to recover your saving.
Do you really need to pay off your mortgage in advance before you retire?
You need to know two reasons why you need to get rid of your credits and pay off your mortgage in advance this year 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.
If you have high credit card debt to pay, make this a priority in 2009. Credit card interest rates are high and sometimes around 30%. It makes much more sense to pay off your credit card debt first before you choose to pay off your mortgage. There is one exception and I will discuss this later.
See to it that you are making regular 401(k) or retirement savings contributions. The fact that the stock market is not faring well during the past eight months is not an unknown fact. It is understandable that you may find it impractical to regularly invest in the stock market. However, continuing to make the minimum contributions would still be the best way to get ready for your retirement while you are waiting to the market to rebound and restore your savings.
If you have completed these steps, then getting your mortgage all paid off before your retirement is the best financial tactic you achieve starting in 2009.
The thought of spending your retirement funds on maintenance costs and property tax and not for paying off your monthly mortgage bill should be enough to get you motivated to own your home free and clear before you retire.
If you pay off your mortgage in retirement you have the option of getting access to your money through a reverse mortgage.
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.
Mortgage acceleration enables you to cut at least 13 years off your mortgage account. Aside from the fact that you get to save thousands of dollars that you are supposed to spend for paying interest, this new technique would allow you to pay off your mortgage fast without you having to adjust to a change of lifestyle.