Posted by Larry Hurt

How to Retire Without a Mortgage

How to Retire Without a Mortgage

Homeownership has always been a trait of the American dream. Traditionally, owning a house has been a representation of financial stability and reliable retirement savings. For many, owning a home is the most significant investment in a family's financial portfolio. But will you still pay the mortgages in retirement?

One way to retire with little or no debt is to consider paying off your mortgage sooner than expected. Depending on your financial situation, this option can help you enjoy the golden years with fewer money worries.

Refinance your mortgage

One sure way to reduce your mortgage bill is to refinance your mortgage at a lower rate for an equal or longer period. You'll benefit from reduced monthly payments and less pressure on your bank account. It is not a bad idea if the money is low. What you don't earn is the mortgage-free pension. To pay off your mortgage in advance by refinancing, you need to opt for a short term loan. 

Reduce the size of your house

Think about it: at a time when you should be enjoying simple living, do you need a formal living room, a separate living room, and two guest bedrooms that you've never been in? If your answer is no, consider reducing its size.

The great thing about reducing to a smaller house in the same area is that you do not have to say goodbye to your friends, family, and communities. Of course, class can also be found in the event that you can pay cash for your new little home. This means that there is no mortgage.

And don't limit yourself to the concept of downsizing. Just because you've spent the past 30 years on a traditional ranch doesn't mean you should buy another ranch with fewer square meters. Consider conventional alternatives such as condominiums and urban residences as well.

Move to a cheaper city

Can't find the perfect area at the right price to retire in your city? Withdraw to somewhere less expensive. Of course, there will be sacrifices, but what you give up will be financially familiar. The best retirement places combine extensive and accessible real estate activities. And moving to an economic location will increase the chances that you will no longer have to take out a new mortgage.

Housing prices are not the only factor to consider moving. You must also weigh the taxes. 

Rent instead of owning

One guaranteed way to retire without a mortgage is to sell your current home for a profit and use your income to rent accommodation during retirement. Although it seems that you only write a check to a landlord rather than a lender, the differences between rent and property can be considerable.

Among the advantages of renting in retirement: there is no leaking roof, there is no property tax to pay, and there is no capital linked to illegal properties. There is not even a residential albatross around your neck that will keep you from moving the way you want. You can also save a few dollars on living expenses, such as insurance, when you rent. 

Regarding popular tax exemptions to support arguments over property rights, some of these housing deductions have been limited or removed by the new tax law passed in 2017. Double the standard deduction that started with declarations in 2018 also means that fewer taxpayers are broken down, further limiting access to other tax incentives linked to residences.

Live with your children

Of course, for some families, the idea that parents would later retreat from their home to their kid's home is a nightmare. But in your case, it could be a dream scene where you can watch and help your grandchildren grow up. You can assist your kids by taking care of your grandkids while receiving free accommodation.

Anyone can win financially. Adult children not only save on child care but also retired parents can help with family bills. And, of course, when they move with their son or daughter, the retired couple can get out of the mortgage, save money and spend money on things that matter, like going on that dream vacation or going with to that fancy restaurant with your loved ones.

Larry Hurt
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