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Retirement Planning

Retirement planning: Eliminating your mortgage

Paying off your mortgage before you retire is a great goal. By following a few budget tips, retirement without a mortgage payment could be possible.

Keeping your mortgage goal front and center may be the best way to pay off your home loan if you want to retire without a house payment. You could do this by considering these three tips, and calculating your ideal payoff date and sticking to it.

Budget with your mortgage in mind

If you work at it, there's always some area of the budget that you can cut back on in order to put that little extra toward paying down your mortgage. For example, think about brewing your own coffee drinks at home or cutting back on eating out. Finding that little extra and putting it toward your mortgage could not only take years off your loan, but possibly save you thousands of dollars in interest!

Refinance with a shorter mortgage

At this point in your life, your financial situation has probably improved somewhat since when you first bought your house. If you can swing it and want to pay off your house before you retire, consider refinancing with a 15-year mortgage versus a traditional 25-30 year loan. Yes, your payments will be higher, but you could save a ton of interest and pay down your principal in time to enjoy retirement mortgage free!

Make bi-weekly payments

By paying half of your monthly payment every two weeks, you'll have made 26 half payments. This adds up to 13 full payments - or one extra full payment a year. Although some lenders may not offer bi-weekly billing, you can easily do it yourself by establishing an online account (if you lender has this capability) and make the twice monthly transactions yourself.

 

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