Managing Mortgage Debt in Retirement

4. Sell Some Personal Assets

If we're honest with ourselves, most of us have way too much stuff in our homes and apartments. It's so easy to collect items over the years that we no longer want, need or use — particularly if you're hanging on to items with the expectation that one day the kids or grandkids may want them.

Instead of hoarding items, let some of that stuff go. You can have a garage sale, put things for sale on eBay or Craigslist, or even list items for sale through a local community bulletin board. The method you use to unload household furniture, electronics, clothing and other goods isn't what's important. What is important is that you be willing to part with all the stuff in your home or apartment that's sitting around — often gathering dust.

The items you sell could bring in a windfall (large or small), and the cash you raise from selling those goods could be used to toward making an extra payment on your mortgage.

5. Pay Off Credit Card Debt

A final way to improve your cash flow, of course, is to lower your credit card expenses by paying off some of your debts. Reducing those big credit-card balances puts you in a better position to start socking more money toward your home mortgage. Once you eliminate your credit card debt entirely, if you want to be really aggressive about paying off your mortgage, you can take all of the money that you had been allocating toward credit card bills and use it to reduce your house note.

These ideas are just starting points. There are lots of other ways to reduce your overall housing expenses — everything from taking in a roommate to downsizing to a smaller, less expensive residence. Even refinancing an old mortgage with a higher interest rate into a more affordable, lower-rate loan can help you more quickly eliminate your housing debt.

Whatever you do, just realize that having mortgage debt, even in retirement, isn't the ideal scenario. But it's not the end of the world either. As a consolation, if you itemize your taxes, in most cases you can get a tax deduction for all the mortgage interest paid on your primary residence. But paying off your mortgage early means you would no longer get this tax break.

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, television and radio personality, and a regular contributor to AARP. You can follow her on Twitter and on Facebook.