Mortgage in Retirement?
I was recently asked if it is wrong to carry a mortgage into retirement
Carrying a mortgage depends on your situation. Many homeowners suffered during the Great Recession. Over 1 1/2 million homes went into foreclosure in the first half of 2010. Those who owned their homes avoided that pain. When a home is paid for, you don’t have the fear of wondering what to do or where to go if you can’t pay the bill. Without a mortgage, you have the flexibility to give as the Lord leads. You can continue to invest, travel, and pour your life into your loved ones. Now of course homeowners still have to pay insurance and property taxes, and now we have inflation that’s increasing the cost of utilities, repairs and maintenance.
The biggest negative to a paid off mortgage is reduced liquidity. If you need a large sum of money that’s unavailable in a bank or investment account, you may have to borrow against the home, rent it or sell it. If it’s appreciated greatly, this may not be concerning except for the taxes you’ll have to pay. Over the past 30 years, older Americans are more likely to have a mortgage and to owe a large amount on it. Many are burdened with total housing costs and other debts. Those on fixed incomes who retire with a mortgage should avoid credit card debt, signing on student loans, and other debts that strain finances. Indebtedness in general adds stress to health and marriage. Remember: “The rich rule over the poor, and the borrower is slave to the lender.” (Psalm 22:7) Choose to discover true freedom by following God’s financial principles.
And if you struggle paying the bills because of credit card debt, contact Christian Credit Counselors. They’ll create a debt management plan just for you. For more information call the Crown Helpline: 800-722-1976 or visit online at crown.org/ccc.