Can Refinancing Your Mortgage Help You Retire Sooner?September 12, 2016 in Monday on the Money
My mother retired last week, and oh how much better her life has instantly become. She no longer needs to use an alarm clock. She has time to keep a better exercise routine and pursue her creative energies. She can travel or nap or babysit whenever she wants. Having continuously had a job since high school, she’s earned it, but this new life, which is basically an endless Saturday, wouldn’t have been possible had she not paid off her home mortgage.
If you find you have more years on your mortgage than you’d like to continue working, there are several methods to help you pay off your house before retirement, including downsizing to a more affordable house, making extra payments on your current house, or refinancing. That last choice, refinancing, may be the best option because you can keep the home you love, shorten the length of your mortgage and take advantage of low interest rates all at the same time.
Making a decision to refinance involves a thorough analysis of many variables including the reduction in your rate, refinancing costs, length of your current mortgage, and how long you plan to stay in your home. Consider using an online refinance calculator to help crunch the numbers, and talk to your local lender to get additional input on whether it makes sense in your particular situation. You might be able to retire mortgage-free sooner than you think.
By Adam Lucas Adam Lucas holds a Finance degree and an MBA from the University of Kentucky. His work has appeared in many major outlets including Yahoo, AARP.org, and GoBankingRates.com.
Monday on the Money is a weekly commentary from Bank of the Ozarks providing financial advice and solutions important to you and your family.
Member FDIC. Equal Housing Lender.