Should you pay off your mortgage?

Many people who are seeking a "better life" think that by moving to a bigger and better home every 4-6 years that will do it. With this method of "moving up" they are in fact losing out in the long run. In the first 5 year of your mortgage 80% of the payment goes to interest. With the understanding that most of the payment in the first 5 years goes to interest, moving or refinancing is not a wise decision.

A mortgage on a $200,000 home at 6% has a payment, including principal and interest, of $1199.00 Your first payment on this mortgage only incudes $199.00 as a principal payment.The next month does not get much better with an additional $1.00 going to principal.

Because there was money to be made in the industry the number of lending institution grew and grew. It no longer was just the local bank that was lending, but a wide variety of mortgage companies too. So that the lenders could keep expanding their market they developed different types of loans to attract more and sometime riskier borrowers.

Home foreclosures are at a record high with unemployment reaching close to 10%. Many people could have kept their homes. However, they did not realize that there is a way to accelerate the pay off of their mortgage without refinancing or even changing their monthly payments. Many of them had no idea they could do that.

Some concerning statistics stated that in the year 1992, 18% of Americans ages 65 to 74 had housing debt, this was from data compiled by the Employee Benefit Research Institute.However, by 2004 the number of people still in debt because of houseing had risen to 32%. It just continued to rise as noted in the most recent year noted, to 43%. How is this generation ever going to retire?

Not only are they still in debt, the levels have continued to grow. In 1992, the median amount of housing debt carried by those 65 to 74 was $24,609; 15 years later, the median amount owed was $69,000 (both figures are 2007 dollars). The amount of debt carried on their credit cards has also grown. By 2007 37% of this group had credit card debt, up from 1992 by just 5%. Although, the median amount owed had tripled during that time to $3,000.

Debt is not always bad in and of itself, if you can pay it off. However, there has been a jump in the percentage of this group who have debt payments equaling more than 40% of their total income, a threshold level which many lenders consider a yellow flag. Over eleven percent of retirees 65-74 reached that threshold which was up from 4% in 1992. These trends have got to stop, or in the future no one is going to be able to retire.

What if there was a better way? If they could pay off their mortgage in one third to one half the time without refinancing or increasing their mortgage payment wouldn't they want to know how?

To save the glory days of retirement, you need to read Pay Off Your Mortgage and plan for it now.

Kathy Sammons

About The Author Many homeowbers have paid off thier mortgages in a fraction of the time, do you want to see if you quality? Follow this link and find out now!! Pay Off Your Mortgage