When the majority of us take out our mortgages, we don’t even think about the elusive ‘end date’. With this mentality, we make mortgage payments without even keeping any real eye on how much we have left to pay/how many so-called ‘years’ there are until clearance. That is, at least, until we’re fast on the way to retirement with a mortgage still hanging over our heads.
Unfortunately, while most lenders do make efforts not to loan past retirement age, it doesn’t always work out, especially where remortgaging, mortgage holidays, etc. are concerned. Yet, for obvious reasons, a mortgage that continues into your golden years isn’t ideal.
If you’re rocketing towards this reality with no idea what to do about it, then fear not. You do have options, and we’re going to discuss them here.
Check your retirement income
Before you worry too much about having to pay a mortgage when you stop working, consider your retirement income. Workplace or private pension efforts are generally more than enough to live off if you’ve dedicated yourself to them through your life. As such, you may be able to continue meeting your mortgage by just tightening your belt for a few more years. Even if your final retirement sum isn’t quite enough to pay your current monthly amount and still cover your other expenses, speaking to your mortgage lender could lead to a slightly altered rate/longer term that’s manageable.
Consider your get-out options
Even if there’s no way that your retirement earnings can stretch, there’s no need to worry. Rather, it’s time to think about your get-out options. Luckily, there are solutions on the cards, especially if you’re turning to this worry a few years pre-retirement. In this case, increasing the amount you pay on your mortgage now could see you clearing it before it becomes a problem. Even if you need to move to make retirement possible, it needn’t be as bad as it seems. Selling either through the traditional market or with a cash buyer could see you with no mortgage and still money left over to buy a property in another area or downsize.
Don’t be afraid to use your savings
Saving for retirement is one of those things that many of us do by proxy, knowing full well that we could have thirty or more years in which we’ll need finances to play with. But, as much as savings matter, it’s also important that you aren’t afraid to use them for things like mortgage clearance. Yes, a lump sum like this could annihilate the saving’s pot, but this is really what retirement saving plans are for. Plus, given that property is an investment, you can still technically access that money down the line should you need to.
No one likes to think about facing a mortgage during retirement, but trust us when we say that this situation isn’t as impossible as it sounds. You simply need to take stock and start working towards mortgage clearance as soon as you can.