Buying a home is a long-term commitment, so it’s not surprising that older Americans are much more likely than younger people to own their homes “free and clear”. If you have paid off your mortgage or anticipate doing so by the time you retire, congratulations!
Owning your home outright can help provide financial flexibility and stability during your retirement years.
This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing five ways to use or increase home equity:
Even if you still make mortgage payments, the equity in your home is a valuable asset. And current low interest rates might give you an opportunity to pay off your home more quickly. Here are some ideas to consider.
Enjoy Lower Expenses
If you are happy with your home and don’t need to tap the equity, living free of a monthly mortgage could make a big difference in stretching your retirement dollars. It’s almost as if you had saved enough extra to provide a monthly income equal to your mortgage.
You still have to pay property taxes and homeowners insurance, but these expenses are typically smaller than a mortgage payment.
If you sell your home and purchase another one outright with cash to spare, the additional funds could boost your savings and provide additional income.
On the other hand, if you take out a new mortgage, you may set yourself back financially. Keep in mind that condominiums, retirement communities, and other planned communities typically have monthly…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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