May 9, 2016
Homeowners who have retired or who are close to retiring and still have a mortgage may have concerns about their finances. While many do pay off their mortgage before retiring, those who purchased a home later in life with a 30-year mortgage or who have had to refinance their home for some reason may find that they have ten years or more to pay on their mortgage after they leave the workforce. This may leave them with a difficult choice: be under financial stress for years or sell their home.
Few want to sell the home they have worked hard to own, especially since it means giving up the equity they have invested in it. However, there are a number of reasons why renting may be the better option. Having a smaller space to take care of, for example, can be much easier on retirees. Another advantage to renting is that there is no yard work or maintenance to handle.
Those who are facing the grim prospect of losing their home once they retire will need to look at the possible options. According to the Federal Trade Commission (FTC), homeowners may be able to work out a new repayment plan with their mortgage company, get a loan modification, or work out a forbearance for a short period of time while they restructure their other debt. The FTC recommends looking at these options if the retiree’s mortgage debt makes up more than one-fourth of their income.
Moneytips can help you refinance your existing home loan.