Because I divorced my husband, I had to give him all the equity from the house as part of the divorce settlement.
I'm 55 and I hope to retire at 68. I don't think I can pay off the house in 13 years (I have 91K left on the loan).
However, my total monthly mortgage is $760, which around here is less than rent. So any suggestions? I would like to live to 85 and have it paid off.
I have no children, but I'd love to give the house to my nephews or nieces who might need it. Any suggestions.
My estimated retirement income is $2,000 a month.
And does anyone have any thoughts on the ethics in selling me a mortgage I might not live to pay off?
What do I do with my mortgage for retirement?
May 23rd, 2011 at 11:07 pm
May 24th, 2011 at 01:21 am 1306200064
Is there any way you can sell and downsize the home? Get a second job to pay it off? Take in a roommate to pay it off faster?
Do you have any equity? Another option is to do a reverse mortgage to live off of. That said, that rules out giving it away. I think you need to focus more on taking care of yourself rather than having a paid off house, anyway. To be clear, I don't think a reverse mortgage is a good idea. But it is a last resort. Is better than being homeless or completely broke.
May 24th, 2011 at 01:57 am 1306202245
Otherwise, you need to look at what small side jobs you might be able to do in retirement that could supplement the mortgage payment and move you closer to a paid for home.
May 24th, 2011 at 02:45 am 1306205122
I think reverse mortgages can make a great deal of sense for someone with home equity and a tight cash flow. It may be an option for you.
I have an aunt who had decided to do a reverse mortgage, but her kids asked her not to. Instead, they each committed to pay her a certain amount monthly from that point on. They are all happy with that arrangement.
Another thing you might consider is pay down your mortgage as much as you can, then pay it off with a HELOC shortly before retirement. The payments would be much lower and possibly flexible.
May 24th, 2011 at 03:41 pm 1306251688
May 24th, 2011 at 04:57 pm 1306256265
Is your mortgage a 15 year or a 30 year?
I'm guessing 30 (since otherwise having it paid off in 13 more years wouldn't be a very big concern) and also guessing that $760 includes taxes and insurance.
I made a spreadsheet and played with it a little. Do you know that if you made principal and interest payments of $794.48, you will pay off a 91k mortgage in 13 years? You would have to pay your taxes and insurance on top of $794.48. Is that doable for you?
May 24th, 2011 at 08:29 pm 1306268949
May 24th, 2011 at 09:31 pm 1306272717
I used exactly 91k @ 5% and exactly 156 payments (13 years) for my calculations.
May 24th, 2011 at 09:41 pm 1306273294
May 24th, 2011 at 10:29 pm 1306276165
What is your principal and interest payment now? You said your payment is $760, but I think that must include taxes and insurance. Do you have a statement handy?
So for example, if your principal and interest payment is $500 and your taxes and insurance are $260, you would need to write your check for $1060 ($800 principal and interest plus $260 for taxes and insurance). Be sure to indicate that the extra money is for principal reduction.
May 25th, 2011 at 12:51 am 1306284688
This is kewl!
May 25th, 2011 at 02:14 am 1306289665
And the rate is 5.375
May 25th, 2011 at 02:50 am 1306291807
I've been reading your old posts today. I wish you would post more often.
I'm very sorry about the loss of your first roommate.
I was born in Riverside County, which I gather must be near where you live. I never lived there though, I was adopted immediately after birth and my adoptive family lived elsewhere.
May 25th, 2011 at 02:33 pm 1306334035
And, of course, I have Molly, her labby/red back mix. Molly has turned out to be a great watch dog. The neighbors are all afraid of her bark, but in actuality, she is a wimp. The chihuahua would chase her out of the house and eat all her dog food until I figured it out. Bella turned into a triple wide chihuahua.
I live about 2 hours away from Riverside. I'm in the desert, and Riverside is at a higher and cooler elevation.
May 25th, 2011 at 08:21 pm 1306354913
Having my house paid off before retiring was one of my main goals and it provides huge peace of mind, knowing I don't have that big bill every month. Of course now, my health insurance bill is taking the place of the mortgage payment.
May 26th, 2011 at 12:23 am 1306369406
Since I save a minimum of $400 a month (this is besides what I save in my yearly expense fund) I think I could probably handle this. I'm going to make it a goal and see if it works.
May 27th, 2011 at 09:14 pm 1306530866
Jerry