Retiring Free and Clear
This is an oldie but goody , but it is something that not many people
accomplish . I am always shocked when someone on the other side of
65 still has a substantial Mortgage ( and mortgage pmt.) . This is really
tragic and didn’t have to happen ( in most cases ). Please take time to
read this post and remember having at least One Property Free &
Clear is crucial to a successful Retirement Strategy !
There was comment made on a blog post recently about how it is great if the end of mortgage payments would coincide with retirement. Thanks Wendy Neugent Hayden for that comment (comment # 5) By the way, the ability to be free and clear with no additional mortgage payment due is one part of the rent vs. buy decision where buying has the clear advantage.
So what would it take? If you have seen some of my recent posts, you know to expect a chart. As an example, if you are 45 and are getting a mortgage for $100,000 at 5% interest, you would have to increase your monthly principal and interest payment from $536.82 to $659.96 in order to pay the mortgage down to a zero balance in about twenty years. (This is based on making even payments for the twenty years. There are other strategies as well for achieving that zero balance.)
Look over the chart to get some ideas on how it might apply to your situation. Of course, it might be better since this chart is based on an interest rate of 5% and lower rates might well be available. For current interest rates and APR, check with your mortgage lender.
Loan Amount Interest Rate Number of Years Monthly Principal and Interest Retirement Year Present Age (with retirement at age 65) 100,000 5% 30 $536.82 2040 35 100,000 5% 28 $553.59 2038 37 100,000 5% 26 $573.34 2036 39 100,000 5% 24 $596.90 2034 41 100,000 5% 22 $625.29 2032 43 100,000 5% 20 $659.96 2030 45 100,000 5% 18 $703.04 2028 47 100,000 5% 16 $757.68 2026 49 100,000 5% 14 $828.88 2024 51 100,000 5% 12 $924.89 2022 53 100,000 5% 10 $1,060.66 2020 55 100,000 5% 8 $1,265.99 2018 57 100,000 5% 6 $1,610.49 2016 59 100,000 5% 4 $2,302.93 2014 61 100,000 5% 2 $4,387.14 2012 63 Please note the following: The above chart is for illustration purposes only. This is not an offer to extend credit. Annual Percentage Rate (APR) will vary for your specific loan, Consult your mortgage lender for information about APR. The chart above shows approximate monthly principal and interest payment required to pay off a mortgage early for an example $100,000 loan amount, based on an example 5% interest rate. Your lender may require additions to your monthly payment for property taxes, insurance and other items. Consult with your lender for additional details about the specific loans, rates and terms currently available.
Indianapolis-Carmel, Indiana real estate represents one of the most affordable areas of the country according to recent surveys. Contact me for information about finding your affordable home in the Indianapolis-Carmel Indiana area. (And yes, we would be happy to show you foreclosures, HUD Homes and short sales.)
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