To Mortgage or Not to Mortgage Your Santa Cruz Home: That is the Retirement Question

Posted by Lauren Spencer on Thursday, November 1st, 2012 at 1:01am.

It used to be that you spent 50 years at a company and 50 years in your Santa Cruz home, and when you retired, your home mortgage was (happily) paid off. Times have changed. Certainly, few people spend their entire careers at one company, and now many retirees are shrugging off the conventional wisdom of paying off their homes at retirement. 

Here are some points to consider if you are pondering using your savings to dispose of that mortgage on your Santa Cruz home:

• Home Value: If you are one of the unhappy folks who are underwater (that is, the value of your home is less than what you owe on the mortgage), then paying off the mortgage will secure your credit from any possible foreclosure issues should you have cash flow problems later. But paying off that mortgage also depletes your savings substantially, leaving you less cushion if emergencies arise. Reverse mortgages (mortgages based on the equity in the home) are certainly an option for getting back at that cash later, but other investments may be more income-producing in the long run. 

• Interest Rates: If you are one of the many people who have taken advantage of the historically low interest rates recently, your mortgage payment may not be the burden it used to be.  With your retirement income from pensions, 401Ks and social security, you may feel more comfortable holding onto your savings in a more liquid form rather than paying off the house. 

• Tax Benefits: Mortgage interest continues to be tax deductible, so you may want to consider the tax ramifications for your situation. You can only deduct mortgage interest on two houses, so if you are a snow-bird commuting between several houses, ponder all the options.

• Wanderlust: Paying off the mortgage on your Santa Cruz home for retirement makes more sense if you are planning on staying in that home for the duration. 

If you are considering selling your home or buying a new one, I can help. Give me a call today at 831.662.6522 or email me at

For additional real estate information, please visit my homepage at


Reverse mortgages

Historically low interest rates

Tax deductible


About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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