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Hello,
What would happen if I got a mortgage shortly before reaching retirement age and ended up not having enough time to pay off the mortgage?
Greetings,
One way to amortize your mortgage sooner is to increase your amortization payments. The second mortgage (the part of the mortgage which exceeds 2/3 of the property's purchase price or market value) must be fully amortized before you reach retirement age.
In some cases, lenders may allow you to continue amortizing your second mortgage after retirement. A high income after retirement is the primary requirement. Ask the lender about their policy governing amortization after retirement.
Important: If you are paying off your second mortgage using indirect amortization with repayments being paid into a 3a retirement account rather than directly to the lender, the amortization payment will be transfered to the lender in a single payment. Withdrawals from 3a retirement accounts are regulated by law, and must be completed no longer than 5 years after you reach legal retirement age.
Another option is to avoid taking on a second mortgage in the first place by making a bigger down payment and borrowing less.
Best regards from Moneyguru
More on this topic:
Mortgage comparison
Second mortgages explained
Mortgages and retirement: things to be aware of
