We owe $30,000 on our home with 2 years left on the loan- have no credit card debt and one car payment of $211.00 a month and a $200 a month college loan for 2 more years. Our financial advisor thinks we should take out a new 20 year mortgage of $100,000-he’s not not calling it a second mortgage – pay off our old mortgage, the car and the loan and use the rest to fix up our home and/or travel. I am a retired school teacher with a partial pension and my husband will retire next June with a full pension. We are both under 60. I come from the generation that says “pay off your house,” but now we are getting the advise not to do that. We are very confused…..HELP!!!!!
Terry Says: Well, I agree with you! And I know how wonderful it is to go into retirement with a fully paid home. So work extra hard before your husband retires and try to pay off those student loans and the mortgage while you still have income (or perhaps you could substitute and earn extra money or your husband could do some consulting). Then, if you really get strapped for cash one day in retirement, you could take out a reverse mortgage and have tax-free income for life as long as you stay in your home. But save that idea for many years from now, and live on your pensions, and enjoy a debt-free life.