Retirement Mortgage Management

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MORE pre-retirees plan to take home mortgages with them for retirement. In Jamaica, you have up to 40 years to pay off your NHT mortgage. Hence, if you were given a mortgage at the age of 30, the mortgage will expire at the age of 70. Some mortgage companies provide up to 35 years of age to pay off your mortgage, but with the retirement age at 65, you can count on your mortgage to be with you in retirement.

Should your mortgage go away with you?

There are a number of factors to consider when considering paying your mortgage before retirement. Always try to look at the long term consequences. If your monthly mortgage payments are not onerous, then you should probably continue making those payments in retirement. Funds used to pay off mortgages early could be better served in a diversified fund to provide retirement income. Seniors who have access to a lump sum can reduce their monthly payments by repaying the principal and restructuring their mortgages to a manageable amount at retirement. However, this process must be carefully considered, since funds will be required for emergency purposes, as well as to replenish retirement income.

NHT mortgage

Some seniors can get a 10-year NHT mortgage at the age of 60. The mortgage is insured, so in the event of death, the property is paid. In the case of a joint mortgage, in the event of the early death of one of the pledgers, the property is transferred to the surviving pledger without payment of debts. Diaspora members are also eligible for NHT mortgages.

Mortgage Review

According to a survey on retirement and mortgage lending by mortgage banker American Financing, 44 percent of Americans between the ages of 60 and 70 have a mortgage upon retirement. Homeowners usually strive to pay off their mortgage before retirement. Regardless of geographic location, managing mortgage payments and proper planning before retirement provide older people with more opportunities to make mortgage payments during retirement and still live comfortably. Retirement planning is very important, especially in the pre-retirement years. A competent and certified financial advisor can assist in the decision making process.

Self-employed and business owners

The decision to pay off your mortgage before retirement depends on the circumstances. Self-employed people such as educators, consultants, and business owners can still earn significant income after retirement. This means that mortgage payments will not be a deterrent for them, since mortgage payments are affordable. Business owners who have a succession plan may consider getting a mortgage for commercial real estate.

Real estate can be a significant source of income for seniors from both renting and selling. Real estate income can be used for monthly mortgage payments and for short and long term investments. Managing your mortgage in retirement is important for peace of mind. After all, this is the time when you “enjoy working, not living at work.”

Grace J. McLean is a financial advisor to BPM Financial Limited. Contact her at gmclean @ bpmfinancial or her website at www.bpmfinancial.com. She is also a podcaster for the Living Above Self program and can be contacted by email: livingaboveself@gmail.com

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