Financial planners continue to sound the alarm. If you're like most people, you haven't saved enough for retirement. In fact, it can be dangerously dangerous. One of the main reasons could be your mortgage. In other words, your home is costing you too much and it's robbing your retirement.

But wait. Before you say "Yes, I know, my home is too expensive", this may not be the problem. Instead, it could be how you structured your mortgage.

How mortgages affect savings

When people buy a home, most need to find a mortgage. Many will not shop around at all – bad idea – but for those who do, it's hard to understand what they're looking at.

Lenders will give you a good estimate, filled with numbers in an endless sea of columns that are confusing at best. It is easy to focus on the one column you understand: the monthly payment. When considering these competing estimates, it's natural to choose the winning mortgage based on the lowest monthly payment. What mortgage professionals will tell you is that this is a poor way to evaluate a loan.

The lower your monthly payment, the more you pay to use the lender's money. One reason: to achieve that lower monthly payment, it's likely you'll borrow the money over a longer period of time – and thus pay more interest. You could also pay for points to buy your interest rate to save money over time.

Understand the difference

What does this have to do with your retirement? Because you are likely to pay a lot of money in interest on your mortgage company that could be retired. Here's how the math works.

Let's say you're buying a home with a loan of 250.000 and your down payment is 10% on a 30-year fixed-rate mortgage with an interest rate of 4%. After 30 years, you will have paid a total of $429, 674. If you had done a 20-year fixed rate mortgage with the same amount down, you would have paid a little over $300 more per month, but your total cost over 20 years would be $363, 588. That's €666 you keep for retirement .. If you made a 15-year loan, you would have approximately $96, 814 extra in your pocket.

How much money can increase in value over time is subject to many variables. But if that $66, 086 gained 5% each year for 10 years, you would have more than $107, 000 extra for retirement.

And don't forget that with a shorter-term loan, you'll build equity in your home faster. Assuming your home goes up in value, you get the equity back when you sell your home.

The bottom line

Of course, the above example is oversimplified – and with a 10% down payment, you'll also have to pay for private mortgage insurance (PMI).But while the components of your mortgage, retirement strategy and future market conditions are variables that can't be generalized, the message is clear: If you have the ability to cover a higher mortgage payment, it will put more money in your pocket later on. .. That's money you can invest in your IRA, 401(k) or other tax-deferred retirement account, 529 plan or non-tax-deferred brokerage account.

A lower mortgage payment won't save you money. Unlike other purchases, paying less does not mean you have a better deal. In most cases, paying less per month means your mortgage will have a longer term and you will end up paying more because of all the interest you will exceed.

There is usually no penalty for paying off your mortgage early (see The Benefits of Mortgage Payoff ) and if you double your payments, that's less interest you pay over time. Once you reach 20% equity in your home, you no longer have to pay PMI – a savings of about $60 per month in our examples above (see How to get exempt from private mortgage insurance). Other sources say PMI could exceed $90/month for loans this size.

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After the surprisingly strong performance of the Democrats in the U.S. congressional elections, there was reason to rejoice in the White House. At the same time, the Republicans' expected partial victory also means a mortgage for President Biden. The offered cooperation.

U.S. President Joe Biden has given his party a good election result. "Democrats had a strong night," Biden said during his first post-midterms speech at the White House. Media and opinion makers would have predicted a "huge red wave," as a supposed landslide victory by Republicans would have been called, given the party color of conservatives. "And that didn't happen," the U.S. president clarified.

He called Tuesday's congressional midterm elections a "good day for democracy" and "good day for America".

Biden: Understand the frustration

But Biden also acknowledged that some voters disagree with the direction the country is moving in. "The voters have also made it clear that they are still frustrated. I understand that," he said. However, he sees no reason to fundamentally change something in his governance.

At the same time, he reaffirmed his willingness to cooperate with the opposition Republicans, who are likely to form the majority in the House of Representatives in the future. He is willing to compromise on many issues, the 79-year-old Democrat said. "America's future is too promising to be caught up in endless political warfare."

However, he would use his veto to block any Republican bill aimed at banning abortions nationwide or undermining health care, he warned. Also, Biden said he hopes they will continue to work together to support Ukraine after the election.

Close race for Senate majority

U.S. President Biden's Democrats had done better than expected in the congressional midterm elections, preventing a triumphant march by opposition Republicans. But a clear decision on the future balance of power in the two chambers remains a long time coming. So far, Democrats have a slim majority in both the House and Senate.

In the House of Representatives, there are increasing signs of a narrow majority for Republicans, though well below their expectations. A winner was not proclaimed so far. In the hard-fought Senate, there may not be clarity for several weeks as to which party controls the congressional chamber. Because in Georgia, after a neck-and-neck race between the Democratic candidate and that of the Republicans, a runoff election will be held on 6. December needed.

Besides Georgia, the only results missing at 49-48 for Republicans were Nevada and Arizona, where absentee ballots were still to be counted. Currently, both camps have 50 seats in the Senate; in the event of a tie, Vice President Kamala Harris can cast the deciding vote in favor of Democrats.

Mortgage for remainder of Biden's term

Even without an initially clear final result, the elections put a severe damper on Biden's predecessor in office, Donald Trump. Republicans had been banking on what they called a "red wave" landslide victory in light of high inflation and poor poll numbers for Biden. This one would have given Trump a boost ahead of his soon-expected announcement of another presidential run.

Leading Republicans already acknowledged on election night that such a "red wave" failed to materialize in the congressional elections. Among other things, in the state of Pennsylvania, Trump-backed Senate candidate Mehmet Oz lost an extremely important race to Democrat John Fetterman.

The looming loss of the House majority, however, is a heavy mortgage for President Biden's second term in office. Republicans could thus largely block Democratic legislative initiatives.

Trump is said to have raged

Former President Trump officially called it a "super" election night for his Republicans. The majority of the candidates he supported would have won in the so-called midterms, Trump wrote on the Truth Social platform he co-founded. "Who has ever done better?", he asked.

In fact, in close races, prominent Trump proteges lost or were behind. Candidates supported by him have been successful especially where the approval rating for the Republicans is high anyway. According to a report by the news channel CNN, the right-wing populist is said to have reacted angrily to the outcome of the midterms and "yelled" at employees.

Trump also watched his intra-party rival Ron DeSantis triumph in the Florida state gubernatorial election: the hardline right-winger was re-elected with around 60 percent of the vote, cementing his status as a rising star among Republicans. DeSantis could challenge Trump for the Republican presidential nomination in 2024.

Biden to comment on re-election early next year

Asked about running again in the 2024 election, Trump's successor in the White House, Biden, said he plans to decide early next year whether to seek a second term. "My intention is to run again," Biden said at the White House. However, this is "ultimately a family decision".

He was "in no hurry" to make a decision, the 79-year-old continued. He said he expects to make a commitment after talking with his wife, Jill, early next year.

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