5 Reasons Why Paying Off Your Mortgage Can be the Best Choice Before Retirement
If there is one market that has been severely affected by the economic crisis of a few years ago, it was the personal loan and the housing and mortgage ones. Still, a lot of people in the U.S. are still tempted to extend the note for as long as they can, even if that means extending their payments well into their retirement years.
This is usually seen as simply seeking out a higher return for their investment. However, there are several advantages to choosing not to have any mortgage or personal loan payments after retirement.
Here are the most important ones:
Peace of Mind:
This is perhaps the greatest benefit of getting rid o your mortgage payments early on. Once you take care of your mortgage, you can completely stop worrying about earning that additional cash flow that you would otherwise need to repay it or to repay your personal loan every month. Additionally, if the market rates for your investments are not that good, you risk not earning enough to repay your personal loans and mortgages. So in short, being able to owe nothing for your house and be completely debt-free certainly can reduce a huge amount of stress in your life, which is the entire point of retirement right?
Having Equity with You Will Improve Your Living Standards:
If for some unfortunate circumstances you happen to fall behind on your mortgage or personal loan payments, you might be even asked to move out of your home. Without the stress of a mortgage or a personal loan though, you have complete control over your life and where you live. If you wish so, you can move to any place you want or simply choose to remain at your home for the rest of your life. This is an important aspect to consider when thinking about extending your mortgage or personal loan payments, since doing so will simply not give you this much freedom.
Build Equity Quicker:
If you put your mind to it and decide to take care of your mortgage and personal loans fast and aggressively, it will help you build equity very fast. The reason for this is that paying off your mortgage and personal loan quickly will allow you to avoid paying for mortgage or loan insurances. In addition to that, this will also allow you to be eligible for some of the best rates if you happen to need to acquire another personal loan or even another mortgage in the future.
Helps You Build an Emergency Fund:
One of the most tangible advantages of repaying your mortgage or personal loan in time and before you retire, is that if you achieve it, all future income you get can be destined to build an emergency fund that you can use for extreme circumstances. Even better: Once that emergency fund is built, you won’t need to apply again for a personal loan in case something unexpected occurs.
Will Help Minimize Any Other Risks:
You never know when the economy will go downhill again or when any other thing can go wrong. You can also start a low-risk savings or investment plan that can yield a steady amount of income every month. The market is never stable, and repaying either a personal loan or a mortgage can give you enough funds to secure your money for the rest of your life. Of course, this is as long as you choose the less risky investments.
There you go. Payments for personal loans and mortgages can be bothersome, but it is infinitely better to take care of them sooner, since this will free your time (and your money) to focus them on better alternatives, all with a unique peace of mind.