2-Minute Money Manager: What’s the Fastest Way to Pay a Mortgage?

Welcome to your “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers. You can learn how to send in a question of your own below.

If you’re not typically a video watcher, give it a try. These videos are short and painless, and you’ll learn something valuable. But if you can’t deal with video, no problem: Just scroll down this page for the full transcript of the video, as well as some reader resources.

Today’s question concerns whether it’s a good idea to take out a mortgage in your 50s — and if so, how to pay it off as fast as possible.

This one is right up my alley, since I’ve had a mortgage virtually my entire adult life, including now in my early 60s. Should you follow in my footsteps? Here’s what I think.

For more information on this topic, check out “9 Tips to Save Thousands of Dollars on Your Mortgage” and “Getting the Best Deal on a Mortgage.” You can also go to the search at the top of this page, put in the word “mortgage” and find plenty of information on just about everything relating to this topic. Finally, if you’re currently in the market for a mortgage, be sure and check out the Mortgage Search page of our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Today’s question comes to us from Carolyn:

“How risky is it to take on a mortgage in your 50s? What would be the fastest way to pay one off so that we’re not working until the day we die?”

Well, Carolyn, I’m 62 and I’ve got a mortgage. I don’t really think there’s an age limit when it comes to having a mortgage, because it’s not the mortgage that matters — it’s the money that matters:

• Do you have enough money to own a house versus renting one?
• Do you have enough money to comfortably pay that mortgage every month?

Those are the questions you should be asking. Here are some thing to consider.

According to NerdWallet, the average owner pays 30 to 90 percent more monthly than the average renter. In short, owning a home is more expensive than renting a home. This is obviously something critical to consider. You certainly don’t want to pay a mortgage if renting could offer less hassle, less expense and more peace of mind.

Personally, I’ve always been a homeowner, partly for subjective reasons — I like fixing up and customizing my living space. I’ve also tended to live in places where property prices were rising and there was money to be made by owning.

As far as the fastest way to pay off a mortgage, you probably already know the answer: Pay more than the minimum. When it comes to a credit card balance, a car loan, a mortgage loan or any kind of loan, the minimum monthly payment is just that: It’s a minimum.

The purpose of minimum payments is to maximize the profit for the lender, which is the opposite of what you want. You should always try to pay more than the minimum, no matter the loan, to get rid of debt as fast as possible.

When should you buy a house versus renting? Lots of things go into the equation, but one thing you should consider is whether property values are rising where you live. If they are and you plan on staying put for at least five years, buying may ultimately be more rewarding than renting.

How are you supposed to know if you’re living in an area where property values might be expected to rise? It’s simple: Find out if the population is growing.

More important, find out if jobs are growing. If you’re in a place where jobs are growing rapidly — say, a place like Seattle, or here where I live in South Florida — then buying a house might ultimately be in your best interest, provided you’re able to comfortably service both the home and the debt.

Does that make sense, Carolyn? I hope so. Have a profitable day and meet me right here next time!

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About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

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