The path to mortgage freedom

We all have ‘mortgage freedom’ until we purchase our first home unless you are lucky enough to have the cash to purchase without the financing assistance of a mortgage lender. We all know that when we purchase our first home that it will be decades before we have ‘mortgage freedom’ again.

So what is mortgage freedom? Is it the day that you make your final mortgage payment and get to have a ‘mortgage burning’ or as it relates to our company, the day we can help you ‘paint your door red’.

My definition of ‘mortgage freedom’ is not only being able to retire mortgage free or have the ability to be mortgage free, you also need to have a source of income that will support the lifestyle that you have become accustomed to. Do you know how much you will need to enjoy a comfortable retirement? Does it seem unattainable?

Here are some alarming statistics from some recent surveys.

• “Pre-retirement” Canadians aged 50 to 59 are taking on an alarming amount of debt and are most at risk of bankruptcy, according to a new study that examined some 7,000 insolvency filings.
• More than half of all retired Canadians are carrying debt, with many stuck managing two or more payments a month.
• Boomers are about $400,000 short of their financial goals in retirement.

When you obtain a mortgage it is most likely the largest financial transaction of your life. Here’s a thought for you – instead of focusing solely on the interest rate perhaps it might be important to consider various strategies that you can utilize within your mortgage that will assist you with your goal of ‘mortgage freedom’ and ‘financial freedom’ when you are ready to retire.

Having the same mortgage strategy your entire life is not always the best financial decision. If you are applying different mortgage strategies at different stages of your life, just like your other investments, it can lead to the financial wealth and the independence you are hoping for in retirement.

Do you have mortgage strategies for the different phases of your life? Your mortgage is the financial tool that is tied to your largest asset so whether you decide to pay off your mortgage early or keep your other investments liquid, having a strategy and utilizing your mortgage like the financial tool that it really is can help you have the retirement that you desire.

Whether you are refinancing or purchasing a home, you should not be walking away from your bank or mortgage broker without a strategy in place to accomplish your goals not only for the short term but also for the long term and it shouldn’t look the same through every phase of your mortgage life.

Ask yourself these questions - Do you manage your mortgage? Do you manage your Equity? Or, do you just leave everything alone for the next 25 years and hope all will work out for the best?

As a Strategic Mortgage Planner I have dedicated myself to helping people develop and utilize the right mortgage strategy for their financial goals for now and for the life of their mortgage.

 

 

April Dunn is a Mortgage Broker who has been assisting clients to purchase, refinance or renew their mortgages for over 20 years. April is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects and specializes in Strategic Mortgage Planning. April provides a full range of residential and commercial mortgage financing for clients all over the province of British Columbia and across Canada through the Mortgage Architects network. April can be reached at 250-826-3543.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.