Burning the mortgage deed in celebration of owning your home free and clear, once a ritual for most older Americans on their way to retirement, has become less common.
A recent “Retirement and Mortgages” survey by American Financing, a national mortgage banker, found 44 percent of Americans age 60 to 70 have a mortgage when they retire, with as many as 17 percent saying they may never pay it off.
The survey found 32 percent predict they will be paying their mortgage for at least eight more years and 11 percent say it will take six to eight years before their last loan payment.
Another 14 percent say it will take three to five years to reach the payoff, and 7 percent say it will take one to two more years. Twenty percent of those who retire with a mortgage will pay it in full within one year.
The survey found a majority (64 percent) of 60- to 70-year-olds plan to remain in their home and 62 percent plan to leave their home to their children. The majority (71 percent) would rather make home renovations rather than move if a health issue affected their mobility or comfort at home. However, about half (48 percent) are unsure of what they will do if retirement funds run low.
Retirees and pre-retirees can look into refinancing or a reverse mortgage as potential solutions to reduce or eliminate mortgage debt.
A financial adviser can help evaluate those and other options. American Financing’s survey found 19 percent of those surveyed don’t know what a reverse mortgage is, while 15 percent would be open to considering one.
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