The Consumer Financial Protection Bureau’s Nora Dowd Eisenhower reports in a May 7 blog (“Consumer advisory: 3 things to keep your retirement plan on track”) that fewer older homeowners own their homes free of mortgages now than a decade ago.
According to Eisenhower, from 2001 to 2011 the percentage of older homeowners with mortgages increased from 22 to 30 percent and the median home mortgage of older homeowners grew from $43,000 to $79,000.
About 4.4 million homeowners with mortgages are retired.
Since paying down a mortgage on a fixed income can be problematic, Eisenhower offers older consumers tips:
- Older consumers with a mortgage should make the mortgage pay-off date a part of any retirement plan. She notes that prior to a payoff, consumers should consult a professional adviser about any tax and estate implications of the payoff.
- Eisenhower cautions those retired or approaching retirement to consider carefully the impact of taking out new loans, re-financing existing mortgages, or tapping into home equity. Consult with professionals you trust as to potential transactions and your ability to deal with unanticipated expenses.
- Since many people have less income after retirement, consider what your retirement income and expenses are or will likely be, so you can develop a budget and have an understanding of where you stand financially.
You can read the full blog at www.consumerfinance.gov.