Why You Should Pay Off Your Mortgage Loan Before You Retire?

family-home-475883_1280

You probably have a handful of different bills, but the most important one is your mortgage loan. After all, it is the loan that determines whether you continue to keep the roof over your head. The last thing you want to do is to deal with those payments once you retire.

Begin To Save

Whether it is to pay off your mortgage or to care for your day-to-day living expenses, you will want to start saving now for what may be financially harder in the future. Saving for retirement can be done in a few different ways. You can create a savings account, sign up for an IRA, or invest in stocks. Either way, you will want to begin your savings as soon as you can – whether it is twenty years or one year in advance.

Consider A Reverse Mortgage

If you are one of the people that simply cannot pay off their mortgage with cash and still have any money to live off of during retirement, you may want to consider the pros & cons of a reverse mortgage. With the reverse mortgage, you can have your mortgage paid off and possibly still have money that you can use to travel during your retirement or to pay your monthly expenses. As long as you are abiding by the terms of the reverse mortgage, the extra money is yours to do with as you please. If you have already paid off your mortgage by the time you apply for a reverse mortgage, it can still be a very beneficial loan for you since you will have even more money to work with.

While it is true that with the reverse mortgage you will not have to worry about monthly payments, you will need to keep up with the home repairs of the property, as well as the property taxes and insurance. You can also pay off the loan early if you want and you will not have to worry about trying to cover a pre-payment penalty as well. The options for receiving the money from your reverse mortgage are fairly flexible as well. You can opt for one lump sum, receive a line of credit, or receive monthly payments. You may also be able to take your funds and use a few different payment methods so your individual needs are met.

Take Advantage Of The Increased Loan Limit

In most parts of the country, the loan limit for reverse mortgages will be increased. This is exciting news since this is the first time this has happened in a long time. The limit for the loans increased by $10,650, which makes the new loan limit $636,500.

Of course, your home has to be of high value to obtain that size of a reverse mortgage, but it is nice to know that there is an increased limit that you can take advantage of if your property appraises for enough money.

You Do Not Have To Worry About Paying The Loan Back

While there are some options to pay off the reverse mortgage, you actually never have to worry about it if you do not want to. You can simply make use of the funds received from the loan for your expenses or enjoyment during your retirement. When you pass away someday, the reverse mortgage company will receive the money they are owed out of your estate. This could be out of the proceeds from selling the home. Therefore, you may want to let your heirs know ahead of time that this is what your plans are. But do not feel guilty, you worked hard your entire life. This is your house. This is your money. And this is your retirement that you deserve to enjoy.

Start talking to a reverse mortgage loan specialist for more information on how you can get the process started.