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Grandparents And Grandchildren Sitting Outside House On Lawn

Did you know years ago, there was a practice called a “Mortgage Burning Party?”  This was done typically around the age of retirement to celebrate you now owning your home free and clear.  So it begs the question, should you be mortgage free at retirement?

Refinance & Retirement Age, Quick Look!

First and this fact is undeniable:  Retirement savings on average falls short of needed living expenses by almost 42%.  So does it make sense to be mortgage free with those statistics?  The truth is, in retirement your most powerful financial tool will be your mortgage.  However, let’s be very clear about the strategy.

Are we speaking of a reverse mortgage?  No. Not that those services don’t have their place in financial portfolios for most Americans at retirement or nearing retirement age.  Let’s look at what cash can be used for.

Refinance & Retirement Just the Facts!

  • A refinance of your mortgage, with cash out enables you not to have to touch investments, retirement plans, or insurance policies.
  • A new and emerging issue for retired couples is long-term care.  If the pandemic has taught us anything, it would appear that nursing or assisted living facilities are not the alternative we once thought.  In-home care from a provider is the best care possible.
  • Be debt free otherwise.  Eliminating your credit cards, auto loans, costly timeshares, RV’s, secondary properties all makes perfect sense here.  Consolidate it into one payment.
  • Helping family.  The retirement generation is facing financial pressure from their kids, unlike any other generation.  Many are paying their kids’ bills.  A perfect strategy instead of sending them $2000 or $3000 a month would be to pay off their debt, such as their student loans.  It then becomes more manageable for you without having a serious impact on your cash flow.

Times have changed.  Financial models have changed.  Mortgage burning parties are definitely a thing of the past.  Bear in mind that you don’t want financial issues when you pass for your family.  However, you have worked hard your entire life to enjoy this next phase.  A mortgage is a good debt.  Debt that will give you financial freedom, unlike earlier in life.  You now have options.  Use them.  We have specialists standing by to help you understand this phase of your “mortgage life.”  Let’s put a plan together that makes sense to use this asset for the next 5, 10, 20, or even 30 years.

6739053 - luxury home in suburbs with triple garage

November 3rd, 2020.  It is a date that we are reminded of on a daily basis.  No matter the side of the aisle you are on, you may be asking “Should I wait till after the election to refinance?”  Now as a matter of what the markets may or may not do, we will leave that to the political pundits and economists.  Let’s talk about you.

Waiting Till After the Election to Refinance is a Logical Question.

However, what you are doing here is trying to time the mortgage market.  Or, you are trying to time interest rates.  Either of which is truly a losing strategy.  In fact, in past posts, you will see clearly that interest rates may be the most irrelevant piece of your mortgage transaction.  

Some have spent a lifetime analyzing and evaluating the timing of how and when interest rates may or may not move.  The factors that go into the Federal Reserve making a rate move are far too lengthy and complex for this post.  Then how banks will react to the news is a matter entirely separate and unto itself.  If you would like a sneak peek into what influences the Fed in monetary policy, click here: Federal Reserve.

So, Should I Wait Till After the Election to Refinance?

The short and simplest answer is absolutely not.  Why run the risk?  The election is over 3 months away.  Do you want to continue paying a high rate credit card for another 3 months? Continue to pay PMI for another 3 months?  Put off saving for your retirement for another 3 months, or put off starting your business for another 3 months?  Lose out on $500 or even $1000 or more in monthly payment savings for another 3 months?  

These are examples of the risks you run in hoping to save a fractional percentage more on your interest rate.  You will be losing real dollars, real savings, and real financial opportunity.  Instead of timing, let’s talk about the best possible steps in moving forward on a refinance for you.  Click here and work some numbers, your numbers and the difference a refinance today will make.

mortgage_for_sale

Although you may find yourself overwhelmed by unpaid bills, if you own a home, you are one step closer to debt relief. Your home is your best investment, which you can use to get you and your family in the black financially after medical bills, credit card bills or unforeseen expenses leave you scrambling for available cash. It’s never too late to refinance your mortgage. Here are a few tips for getting the timing right.

home-refinance

Refinancing is the process of taking out a new loan to replace an old one. The steps you take are similar to those you took when obtaining your original mortgage. You fill out a mortgage refinance form and submit it along with financial documents and credit information, and then wait for the lender’s approval. If approved, the new lender pays off the old loan, and you begin making payments to your new lender. Homeowners choose to go through the process again for several reasons, but the main reason is usually that the new loan offers key advantages over the old one.