Many borrowers purchase or refinance their homes during peak years of income. Five years ago, Al refinanced his thirty year fixed $800,000 mortgage and chose a loan with an interest rate fixed for seven years. Payments were low; his income, high. Seven years seemed like forever! Al has made extra payments and now owes $600,000. Preparing to retire, he worries that when his loan adjusts, rates may be high and his income, considerably less. This may be the time for Al to consider a refinance: rates are low and he wants the security of a fixed rate loan. Still working, he can easily qualify for the new loan. Questions about mortgage planning for retirement: · Is your interest rate the same or lower than current rates? · Is your loan fixed for thirty years or will it adjust? · Do you plan to stay in the same home? · Will your income during retirement qualify you for a refinance? · Is your loan significantly smaller so that a refinance will lower your payment? The financial puzzle is complex and when planning for retirement, it is important to review the mortgage piece of that puzzle. |