There is security in owning a home that is totally paid for. Real estate markets may fluctuate on the home’s worth, however this is secondary to having the freedom of knowing your home is really your’s and not the banks or lenders. If you are in a financial position to pay off your mortgage, don’t walk, run to the bank and pay it off!
There are no downsides to owning your home outright. It is a total asset which allows you the freedom to entertain many options of what you wish to do, after the mortgage has been paid off. Having a mortgage, when you don’t have to, is just an unnecessary burden. There is nothing to be gained from it.
Think about this. Once you do retire, the goal is to make life as problem-free as possible. The goal is to try to make those golden years, truly golden. By simplyfying your life, you gain freedom and the ability to enjoy it more.
BENEFITS of PAYING OFF YOUR MORTGAGE:
1. No more monthly payments to be concerned about, or rising interests rates, if your mortgage is not on a fixed rate.
2. Other then taxes, insurance and upkeep, your retirement income will go a lot further, minus a monthly mortgage payment.
3. Retirees, who own their home outright, have the option of renting out their home, thereby giving them extra income. The retiree can then use the rental money to downsize, rent a smaller apartment, move into a retirement community, while all the time still owning a paid for asset! Or, stay in the home, if you wish. You can make decisions.
Do not rent with a lease agreement. Rather, “tenant at will”, meaning a month to month rental. The point is, even if everything went belly-up, you can always go home!
4. If you decide to sell outright, you can wait until the market turns to your advantage and in the meantime enjoy living mortgage-free in your paid for home.
5. If you have grown children, and want them to inherit the home, it is extremely important to put the home in a trust fund for your children. In most States it takes 3 years before it goes into effect. This portects the home from being swallowed up by the State for nursing home liquidation to pay for your healthcare, should you end up in one later on.
Retirement should be as hassle-free as possible to get the best out of your golden years. Keeping a mortgage payment hanging over your head when you don’t have to, goes against simplyfying your life.
If you find you can’t meet the payments, on your retirement income, your home is as subject to foreclosure as much as the next person. It won’t matter that you paid off 20 years worth of payments with only 5 or 10 years left to go. Banks and lenders can be merciless.
Banks and mortgage lenders can rip your home out from under you, when you fall behind in mortgage payments. If the home is paid for and you need to file for bancruptcy, for other reasons, the law protects you from losing your home and one vehicle. Leins can be placed on the home by any secured creditors, but they can’t take your home away.
Again, as soon as it is paid for, put your hard-earned home in a trust fund. After 3 years, your home will be untouchable by creditors. This protects your child/children’s inheritance. (This information was shared to me by a banker friend).
So, yes, if one has the financial means to pay off the mortgage, it is wise to do so. Again, there is nothing to be gained by having a mortgage payment hanging over your head every month. But there is everything good to gained by paying it off!