Sure you are just starting on your search to buy a Southeastern Michigan home. Right now you think your goal is just to buy a home that will fit your family’s needs. But as time flies by and it does you will start thinking about retirement.
One of the goals when you buy a house is to:
PAY YOUR HOUSE OFF IN FULL BEFORE RETIREMENT
You don’t want a mortgage payment when you retire. It is hard enough to survive sometimes when you live on a fixed income. So why add to it with a mortgage payment. Here is what saavy homeowners do and don’t do.
DO NOT USE YOUR HOUSE AS A BANK – by this I mean do not get a home equity loan to pay for cars, vacations, college educations, or weddings.
Save for home improvements. Want to do a kitchen? Save the money to do it. Do not go backwards and take out a loan for it.
If interest rates go down and it makes financial sense, refi. But shorten the length of the loan and keep the same payment. It makes no sense to take out another 30 year loan if you have been in a home for 5 years. You will be just starting over. Sure it is a cheaper payment, but use your head. The person who is making the most money is the lender and the loan officer that is selling you the new loan.
And absolutely do not listen to your stock broker or financial planner when they tell you to take the equity out of the house and put it in the stock market or mutual funds.
So many people have lost their homes in the last few years because they broke these rules. Be a smart homeowner and follow these rules if you can. Your goal is to have no house payment when you retire.