Are you currently paying for a mortgage on your home or planning on having one in the future? If so, you should make a payment plan so you can finish paying for your mortgage before you retire. Here are a few reasons why you should pay off your mortgage before retiring.
Increase Your Free Cash Flow
First, paying off your mortgage before you retire will free up your budget andincrease your free cash flow. Retirement can have a lot of expenses, even if they are enjoyable expenses. Having your mortgage paid off will help you to have more money to pay for travel, trips, and gifts for family and friends.
Additionally, it will be a big financial help once you have bigger health bills to pay for. If you or your partner start to need end-of-life or long-term healthcare, those expenses will add up quickly. Having your mortgage paid for before retirement will make it a lot easier to afford those necessary expenses.
You Get to Say You Own Your Home
Second, paying off your mortgage before you retire will give you the satisfaction of being able to say that you own your home. Fully owning your home can give you a lot of flexibility, particularly as you’re traveling and enjoying your retirement.
This will also help you if you’re working on your will and want to name a beneficiary to inherit your home. If you still have expenses on your home, it will be much more complicated to inherit. Additionally, paying off your mortgage is the surest way to prevent foreclosure.
You Can Save Big on Interest Payments
Finally, paying off your mortgage before you retire will help you to save big on interest payments. No matter how low of an interest rate you were able to secure when you took out the mortgage on your home, interest will still grow over time. The interest that your bank or lender gathers could add tens of thousands of dollars to your mortgage, perhaps more. Paying your mortgage off earlier will help you to stop that much interest from growing. You can accomplish this goal by making more mortgage payments more often. For example, rather than making a monthly mortgage payment, try to make additional payments towards your mortgage every week. This can help you to pay it off more quickly.
So, if you have a mortgage that you’re paying regularly and you have flexibility in your finances, consider paying off your mortgage before you retire. This will help you to increase your free cash flow, own your house completely, and save big on interest payments. If you’re financially able to pay off your mortgage early, you’ll reap many benefits from that decision.
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