The Not So Glory Days of Retirement

Many folks not using sound judgement are having trouble making their mortgage payments.Many owe more on their home than it is worth.

With a $200,000 mortgage at 6% interest, the payment of principal and interest is $1199.00. Your first payment on this mortgage only incudes $199.00 as a principal payment.The next month $100.00 goes to principal and each month after that the principal payment creeps up ever so slowly.

Because of how lucrative this is, the number of mortgage lenders over time has grown and grown. You not only could get a mortgage from a bank, but from a variety of different 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.

Forclosures are higher than they have been for a long time, and people are out of work. Many people could have kept their homes. However, they did not realize that there is a way to reduce the pay back time on their mortgage without refinancing or even changing their monthly payments. Many of them just did not see a way out.

Some very concerning statistics stated that 18% of retirees ages 65-74 in 1992, still had a house payment, as reported by the Employee Benefits Reserach. By 2004, that percentage had risen to 32%. And in 2007 -- the most recent year available -- 43% of 65- to 74-year-olds had a mortgage. Retire? Are you serious?

The levels of personal debt have also risen. The amount of debt has increased from $24,609 in 1992 to a staggering $69,000 in 2007 (both of these figures are stated in 2007 dollars.) Credit card debt has also risen. By 2007 37% of this group had credit card debt, up from 1992 by just 5%. The bad thing is that the amount owed had tripled to $3,000.

Debt is not always a bad thing if you can afford to pay it off. However, there has been a jump in the percentage of older Americans 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 folks 65-74 reached that threshold which was up from 4% in 1992. This is staggering, and something that we need to do something about.

If there is a better way, then they better find it soon. Do you think that if there was a way without refinancing to pay off their mortgage sooner, do you think they would want to know?

To learn how, go to Pay Off Your Mortgage where I will show you why it is a smart decision to do so.

Kathy Sammons