A recent study shows that Utah is the sixth-best place to retire in the United States. However, it is likely for a long-time Utahn to carry mortgage debt into retirement.
It is not because the Beehive State ranks 14th with the highest average mortgage debt in the country, at nearly $205,000. Nor is it because over 70% of its homeowners are not yet free and clear.
What troubles many indebted homeowners, however, is the lack of savings. If you want to boost your retirement fund, do the following:
Lower Your Monthly Payments
Do a mortgage refinance in Utah. Replacing your current loan with one that has different terms can help free up more space in your budget. Make every effort to reduce the monthly installments of your mortgage. You could achieve this by leaving your home equity alone and not opting for a shorter term.
Refinancing in hopes of reducing your monthly mortgage payments might not save you on interest that much. But it might be necessary to keep your finances manageable during your golden years.
Then again, do not forget to factor in closing costs. These fees must be paid upfront, and they represent the overall price of your debt, along with interest.
Crunch the numbers to identify the break-even point in your refinanced mortgage. This way, you could see when you could recoup your closing costs and begin keeping more cash in your pocket.
Use Home Equity to Eliminate Other Debts
Converting your home equity into actual dollars will increase your mortgage debt. However, using your property as an ATM to consolidate your high-interest debts could ultimately save you more money over the long term.
Considering that Utah is 10th among states with the highest household debt, being able to zero out your credit card, student loan, and auto loan balances could justify having a higher mortgage debt.
Borrow Against Your Property (Again)
Taking out a reverse mortgage lets you receive another stream of regular income come retirement. The amount you could receive through this loan is based on your property’s equity, which you do not have to repay as long as you reside in it for 12 consecutive months.
Ideally, you should apply for it when you no longer owe a single penny to your house. But it is possible to find a willing lender even if your current mortgage has not matured yet. You could also use the funds to pay off your other debts and spend whatever cash is left as you see fit.
Be a Landlord
If your house is too big for you, you could rent out your extra space and make some extra bucks to cover your mortgage payments. Take advantage of Utah’s booming economy and hot real estate market to beef up your overall retirement income.
Quitting work with mortgage debt is nobody’s dream retirement. Although you probably would rather not have it and still carry it when your gainful years are numbered, you should feel comfort in knowing that there is a way to manage it without struggling to make ends meet.