How To Retire With No Mortgage
July 18, 2018 | Tom Ashworth
If you are like me, you will procrastinate every chance you get when it comes to planning for retirement. This article on “How To Retire With No Mortgage“. A lot of people just think that by magic there mortgage will be paid by the time they retire. Most people plan on working until the mortgage is paid and this makes sense.
A strategy used by some is to add more on the payment toward the principal and this is not a bad idea. But let’s take a closer look.
If you refinanced your mortgage at 4% last year with the first payment due on May 1, 2012.
If you financed it for 30 years let’s say, the home would be paid for in 30 years.
If you made an additional principal payment with every payment you send of $250 then the home would be paid off in 20 years. If you paid and extra $525 it would be paid off in 15 years and if you paid an extra $800 it would be paid off in 12 years.
The obvious benefit of paying off your home before you retire is that you have no house payment. It is also a great asset if you need to borrow money for emergencies.
You can also think of buying a smaller home now with those extra payments, say a lake home on Lake LBJ, which you can rent. Then when you retire you can move into the smaller home and use your original home as the rental.