Your retirement is closing in but, with the kind of economy that we have now, you are not yet so sure if you should still pay off your mortgage in the next five years.
Since the market has slashed your retirement savings by almost 40%, you are betting that the stock market will rebound and that you would recoup your retirement savings.
Can you actually afford to still pay off your mortgage before your retirement?
Find out more about the two reasons why it is best to pay mortgage and clear off your debt in 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.
The second caveat is that you should make sure that you are always contributing to your 401(k) or retirement savings account. I know the stock market has fallen over the last eight months and it does not make sense to keep contributing in the stock market, but in order to prepare for your retirement, it is imperative that you keep contributing to your 401(k) plan at least out to your employer match.
If you done that, they paying down your mortgage is the smartest financial strategy in 2009 and it is even better if you can pay this off before you retire.
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.
Reverse mortgage allows you to get access to your retirement funds when you settle your mortgage before you retire.
A reverse mortgage gives you the ability to tap into your home equity only if your mortgage is almost fully paid off. This gives you the advantage of using your home as a second income source in the event you need this in retirement.
When you think about paying off your mortgage, you immediately think that you need to spend more of your own money in order to pay off our mortgage early. But it does not have to be this way.
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.
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