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Possible early mortgage payoff

By Terry Savage on January 12, 2021 | Financial Planning / Retirement

Terry,

We’ve refinanced our mortgage last january to a 8 year, 4.625% that currently has $168K left. We have been paying $1K extra per month towards the principal. We started just a year ago at $204K so we’ve seen a substantial reduction in a year and with the $1000 extra monthly payment continuing, we would be able to payoff in 4 1/2 years.

Due to unforseen health problems and the pandemic, my spouse has taken early retirement from
Nursing short of her expected full retirement at 66– and applied for disability ss. I am currently retired as I am a couple years older. I am getting a pension and social security and she will be
doing and getting the same.

My wife thinks it may better if she pays off the mortgage now or at least most of it when she gets her severance distribution instead of suffering thru more than likely family budget shortfall as we get older.

What do you think we should do? Going back to work for either of us is not real because both of us physically cannot go outside into the workforce anymore on anywhere near a full time basis.

Terry Says

I think you should immediately contact Leslie Struthers at Guaranteed Rate– She will let you know quickly if you qualify to refinance your mortgage based on your retirement income. If so you could get a 30 year mortgage (yes, I know you will never pay it off!) that would be the cheapest way to stay in your home as long as you can.
Her contact info is Leslie@rate.com or 312-379-3526.

If you can’t refi, keep in mind that cash will be valuable down the road. And that this might be a good time to reconsider your living options for your life in retirement — ie, a time to sell and move into some form of senior living community.

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