Roger Schlesinger

When should you payoff your mortgage? The answer depends on you, however most people need to have the mortgage paid off if they wish to have a comfortable retirement. That, of course, isn't the only way to have a satisfactory retirement but it goes a long way toward insuring a happy one.

Should you be about the age that was always considered the retirement age, 65 years old, and haven't paid off your home mortgage then I can only assume you are in a position to retire without doing this. If you reached this age and have been too busy to think about it, and aren't in a position to retire, you still may be able to get there. Keep reading. Last but certainly not least there are many in this country who wouldn't consider stopping what they have done and loved all their life: their work! I know the feeling and I salute their work ethic.

Back to reality. The work force participation is the lowest in decades and not only is the nation deeply in debt, the workers are also. Social Security is probably at best a tossup as to whether those in their 40 to mid 50s, or younger, will have it around to help them retire.

Your house could be the answer if you manage it right. That means concentrating on paying it off, not continually lowering the payment and starting the time of the amortization over and over. If you take a shorter amortizing loan and stay with the program you should be able to payoff your house in one to two decades, and you will have locked up your future right then and there.

I am not against refinancing to lower rates, however, most borrowers think first and only about lowering their payments. They do not count the extra years they add to their loan nor the fact that paying off the house will, at minimum, take more time and could also cost you more money. When you refinance you should always try to take a shorter amortization. If you are not convinced compare the two payments as to what percentage of the first new payment will go to principal and what percentage will go to interest on the same amortization you currently have and the shorter one that I suggest. When you make that comparison realize your retirement is hanging in the balance.

Roger Schlesinger

Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.


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