There are more an more people reaching retirement with mortgages. In fact, many people are acquiring mortgages in retirement. Is it a good idea?

First of all, most financial advisors will tell you that you shouldn't carry a mortgage into retirement. That is because most retirees are cutting back on what they are living on, income-wise. Personally, I don't want to carry a mortgage into retirement because I want that extra money for myself. I also strive for the clear ownership of my property. But you have to look at what fits you.

Yes, you can get a mortgage when you are close to retirement or in retirement already. Yet, what the bank will lend you isn't the issue. You have to determine the amount you can spend on housing based on your personal preferences and situation. The lender doesn't know your budget or how you spend or what your goals are. The lender only cares about getting money out of you.

So what do you do? If you currently have a mortgage and are afraid that you won't be able to afford it in retirement, look at paying it off early. This is a good idea for anyone. Just make sure that your loan doesn't carry any prepayment penalties. Not only will you save interest, but you will also have the freedom of not having a mortgage to pay.

If you have the income and the inclination, make your mortgage selection carefully. Look for a fixed-rate mortgage. This is important for anyone on a fixed income. You have the security of a mortgage payment that will always be the same amount.

You should really consider what you can afford to spend in retirement. Create a budget, if you don't already have one in place. Add in any housing costs that you might forget about, such as property taxes and homeowner's insurance.

Now take a look at your financial situation. For example, do you have emergency savings? Everyone, even retired people, should have an emergency stash. If there is a death in the family or an accident or repairs needed, the emergency money will help buffer your fixed income. If you don't have the cash to pay for the unexpected, your mortgage could be at risk.

I think that one of the most important things you can do is to play a little game of "what if..." Consider all of the possibilities. If you can get your mortgage paid off, great. But if you can't, don't worry too much. You will. From my own experience, owning your own property in retirement is a prefect situation. My parents would have never been able to retire had they not owned their own property -- their retirement income was too limited. But they have been comfortable due to less monthly housing costs.

Having a mortgage in retirement is fine for many people who can afford it. But remember, the rules don't change: fixed rates are best, don't borrow too much and buy wisely.