This is our home. It is paid for. We don’t carry a mortgage on it since we were brought up in the days that told us to carry no debt into retirement. We heeded that advice despite constant advertisements over the years urging us to “refinance” to get “ready cash” to spend on “whatever you want.” A number of people we know who are our age(65-70) did just that. They “took money out of their house” to buy boats, vacation homes, trips and plastic surgery.
But of course, there is no “money in your house.” There is only the wonderful opportunity to once again carry a mortgage. And apparently not enough people, most especially us, have not jumped at the chance. Every week we receive offers to refinance. When I go into our bank to deposit money, the lovely young woman offers me a chance to refinance. I am encouraged that with a refinance my interest rate could go down. I carefully explain that since I have no mortgage, my current interest rate is 0%. Hard to beat that.
I was able to research the dismal statistics of borrowing at our age. 47% of people aged 65 owe more mortgage debt than they did in 2003. They bought into the fantasy that their home equaled “ready cash.” We just wanted to have a house to retire into. I guess I should just wear a button to the bank that says “Don’t ask me if I want to refinance.”
Saved By Words 
I love this. Over here we too get adverts about how wonderful retirement could be if you ‘refinance’ your house… and I always think “but once I’ve paid off my mortgage I’m a free agent”. Also I want to leave something for my kids!
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Thanks. Had no idea this was in any place besides the States.
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Resist, resist, resist. I am free of debt after a long period of owing to a mortgage company (and other agencies) and there is nothing that compares to the feeling of independence it provides. I doubt you could purchase a better feeling no matter how successfully you refinanced
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We love having a debt free life. It was a real joy to burn the mortgage.
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I’m proud of you, and for you. Now,
Make it a tad larger to hold “Refinance? No thanks, I didn’t fall for it the first time, I’m mortgage free!”
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That’s a great lapel pin.
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No button is a good one! In Canada, they call it reverse mortgage. The idea is eventually the retiree dies, the balance of the property is paid to the next of kin.
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We keep getting offers for that one too. We don’t want those either.
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My husband & I were only talking about this over breakfast, this was huge here in Australia a few years ago & we know many who jumped at the chance…They have literally lost their homes!!
You still have to pay a loan/mortgage back even in equity loans…circumstances aren’t stagnant, they change… And when there is a down turn in the economy then the banks come to claim what’s their’s! Beware!
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Yes, I had a close friend lose her home over this. In our town house prices were very inflated for a time and people were seduced into taking out these loans. Then they are losing money trying to sell their homes and still owing on the mortgage.
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Very sad, we really have to have wisdom in all aspects concerning instant gratification…don’t we…. there is ALWAYS a cost involved in the longer term… 😦
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Unfortunately that friend often bites on such offers.
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When you say refinance, you mean mortgage the property?
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Yes. Or turn in the first mortgage and take a bigger one and keeping the cash.
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wonderful post…I am adapting that model…don’t go into retirement in debt
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Good. It was excellent advice given when we were young.
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