Tuesday, January 16, 2007

Home mortgages, Reverse Mortgages, personal debt and retirement - My personal thoughts and experiences.

I wrote about my personal experiences with mortgage debt and how to reduce it a couple of years ago, read about it here.

Today, we have 30, 35 and even 40 year mortgages available. This concerns me a great deal.

If you take out a 40 year mortgage when you are 25, you will not pay off your house until you begin your retirement. You will never be able to save enough to benefit during the important years of your life.

Our philosophy has been to 'live within our means' and by doing so we were able to pay off our mortgage by the time we were in our early 40's This has made our life unbelievably comfortable. We no longer have the pressure of making those huge mortgage payments, just the pressure of saving for retirement. Of course, we had to sacrifice along the way, but we've always enjoyed life, regardless of our financial situation. When you are mortgage free, something inside you happens and you get that 'imagine the freedom' feeling once and a while. All of a sudden you have the freedom to purchase those $100 items and not worry about when it appears on your Visa statement. We've continued to watch our cash flow and invest at least half of what our previous mortgage payment was. We don't go on extravagant vacations, but do enjoy our boat and vacations. We are lucky as we also enjoy our own company and times together as a family.

This is our experience. My wife and I truly believe that your 40's and 50's is the time to enjoy life, as your children are getting into their early teens and can take more care of themselves. This is the time to enjoy life, while we have the energy to do the things that we want. As I approach 50, and anyone at my age or older will attest, your body just doesn't move at the same speed as it did when you are 35 and the recovery period is longer. This is a fact of life and aging. I can't even imagine what it will be like at 60, but I'm not waiting until 60 to enjoy life. All of this is possible by taking care of business during your 30's.

Now, some will say that home ownership is better than renting, whether you have a mortgage or not. Some will also say that if you didn't buy the house at 30 you would not have anything when you are 65. This is true too and you can't go wrong with buying your home rather than renting your whole life. Some people do rent their entire life and enjoy this lifestyle, but that is their choice and come retirement, they may be sorry. I completely agree with home ownership, but at the same time, I think we have to manage our debt better in our 30's to enjoy life in our 40's. I think that your early twenties are the fun times, late 20's are your working years, your 30's are your hardest years with children and debt, your early 40's are your prime working years and the time to pay down debt at the highest rate possible, your late 40's to late 50's are your prime earning years and prime enjoyment years, so enjoy them, your 60's are your slowing down and 'chilling' years with your grandchildren, you won't need the huge income you earned during your 40's and 50's but, you will be glad you saved during those years. Your 70's are for looking back on the rest of your life and anything over 80 is a bonus. Personally, my goal is to absolutely, unequivocally and without a doubt, live to be 100 or a little older than that. I want to enjoy the next 50+ years of the Internet and high-tech age.

Another disturbing trend that seems to be rearing it's ugly head is reverse mortgages. I had a great conversation with a mortgage friend/financial planner last week and his comments were that people are generally retaining debt and refinancing their homes throughout their lives up to their 50's and early 60's and then when it comes time to retire, they are taking reverse mortgages to pay for their retirement. Oh my, what a tough way to go through life. I can picture it now, buy your house at 28 years old and get a 35 year mortgage and then when you have paid it off, take out a 20 year reverse mortgage for 75% of the value to fund your retirement. Some may say that this is a perfectly fine method of life planning, but I can't agree with that. Not only will you carry debt for your entire life, but you will have almost nothing to leave to your children. Again, these are my values, but our children really are our legacy and I want to help them as much as possible when they are in their 20's and 30's to give them the best start possible on their lives.

So, for those of you that are just starting out in your 20's or even if you are in your 30's I do hope that you can get hold of your financial situation, pay down some debt, get rid of credit card debt, follow some of my advice here and get that mortgage paid off by the time you are in your mid to late 40's and enjoy your life with your kids before they leave you!

I wish you all the best,


For more information please contact A. Mark Argentino

A. Mark Argentino Associate Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS 905-828-3434
FAX 905-828-2829
E-MAIL mark@mississauga4sale.com
Website: Mississauga4Sale.com


  1. Mark,
    I just bumped unto your blog via my usual web surfing.Thank you for this post.Although I do not agree with everything you say in it,I believe its one great piece of advise that one can not easily buy it anywhere.I applaud you for your honesty(at least I sensed it) and for sure would love to visit your blog again and again.

  2. Thank you for your kind comments. Yes, this is my advice and experiences from my heart. This is why some of the concepts that I present may not agree with your line of thinking, as it's my personal thoughts. There is no real right or wrong in this, just experience and applying it to your personal situation.

    I would be grateful if you were to comment on what you don't necessarily agree with or how you would do things.

    I don't think we share enough of our own personal experiences with each other and rely too much on the so called 'experts' which of course is only what they have been taught along with their personal experiences.

    All the best,

  3. Thanks for sharing your personal experiences...its great to hear these stories and to know learn from other people's experiences.

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