Picking the Right Mortgage Options

En español | What does "house" mean to you, when you're planning for retirement or retired already?

See also: Is an adjustable-rate mortgage a good idea?

It might mean security if you've paid off the mortgage and can handle the taxes and repairs. It might be just one of your assets, to be borrowed against or sold for ready cash. It could be a love object — difficult to leave. A house is a nightmare, however, if you can't afford it and can't sell.

Here are just a few of the likely decisions that those of you who own homes might have to make.

1. Prepay your mortgage. It cuts your living expenses in retirement if you suddenly need money or your housing plans change. Full ownership also is a bulwark against extreme economic risks, such as hyperinflation, says real estate guru John Reed, author of How to Protect Your Life Savings From Hyperinflation & Depression. Pay off your mortgage out of income, not with cash from your IRA or 401(k). Retirement accounts provide liquidity and are protected from creditors.

2. Refinance. If you're strained by mortgage payments, you may cut your expenses by taking a new 30-year loan — regardless of your age.

Next: Consider a reverse mortgage. >>