Mortgage for Retirement
If you are thinking of retiring in the next several years and considering refinancing your mortgage, then this article is for you.
Lifestyle During Retirement
One of the first things to consider is what your retirement lifestyle might be like. Perhaps you want to stay in your home, or maybe you want to downsize. You might even be considering passing on your home to your kids or grandkids. Some folks even use their home for rental income during retirement.
Either way, the first thing you want to consider is the cost of refinancing. If you don’t have enough time to recoup the cost of refinancing then it may not make sense. However, if you have several years or you just want to know that your mortgage is paid off when you hit your retirement date, it might just make sense to refinance today.
Many of our members say that they significantly fear running out of money during retirement. If you pay off your mortgage while you are still working or before retirement, then it can be a big relief that allows you to be comfortable during your golden years.
Other members are willing to take on some risk by investing the extra money that would otherwise go towards your mortgage, to build up their reserves before entering retirement.
The bottom line is there isn’t one right answer for everyone.
Key Refinance Considerations
If you are getting closer to your golden years, there are some key considerations when thinking about a shorter-term loan.
Here are some of the most important ones:
1. Your risk appetite. Can you make more investing or saving. Would you rather have a guaranteed return and predictability or a little more income if things work out as planned?
2. Time you have before you retire, and the cost of refinancing. The good news is that if you owe less than $250k on your mortgage, then you can probably refinance quickly without a lot of work and without significant costs.
3.Your priorities. Are you going to have enough retirement income to allow you to keep paying your current mortgage? Is your current home and/or location going to meet your needs as you age? These and other similar questions are important to ask before making a decision.
If you have questions about refinancing, the good news is that as a credit union, we are here to answer your questions and help you decide whether refinancing may be a good choice to make.
Not all members will qualify for a mortgage with Nymeo. You must qualify for membership with Nymeo to be considered for a loan. Credit decisions are based on several factors, such as creditworthiness of applicant(s), capacity to repay, and value of collateral.