Many financial planners advise clients over 55 to pay off their home mortgage so they can live debt-free after retirement. But what if you must draw down savings to wipe out your home loan? Then your choices get much tougher, says Thomas J. Casey, a veteran financial adviser.

"After you retire, you won't want all your money in the ground in real estate. That's the downside of pre-paying your mortgage from your limited savings," says Casey.

An alternative to mortgage pre-payment is to refinance your home loan to lengthen the term and thereby reduce your monthly post-retirement housing costs.

"The upside of refinancing is that it gives you predictably low monthly payments, which is a strong positive for retirees on fixed incomes. But the downside is that you'll pay much more interest on a longer-term mortgage and you won't free yourself of that debt for many years," Casey says.

"The fees for refinancing are substantial. Because of that, it's important to be very sure you'll be staying in that house for at least five to seven more years," Casey adds.

Eric Tyson, co-author of "Personal Finance for Seniors for Dummies," urges those over age 55 to carefully think through any potential decision about real estate.

"If you make a major financial mistake during this time in your life, you'll have much less time to recover from your error," Tyson says.

-- Begin with an analysis of your full financial picture.

Before you retire, you need a spending plan that documents your current expenses and helps you closely estimate your income versus living costs for future years," Casey says.

In the first few years of retirement, he says most people spend roughly the same amount as they did during their working years, though their medical expenses usually rise. But by their mid- to late 70s, however, retiree living costs tend to decline, as interest in travel and entertainment start to taper off.

One way to develop a comprehensive spending plan is with the help of a financial adviser. If you go that route, Tyson recommends you choose an adviser who's compensated on a fee-only basis, meaning the planner wouldn't receive commissions by selling you stocks, bonds or insurance products.

You can locate the names of fee-only planners through the National Association of Personal Financial Advisors (www.napfa.org).

Another option is to hire a certified public accountant to guide you through the planning process. One way to find a CPA who specializes in personal finance is through the American Institute of CPAs (www.aicpa.org). This organization maintains a list of CPAs who've earned the "personal financial specialist" (PFS) designation.

-- Reduce your outlays for financial planning by doing prep work yourself.

The first step in developing a financial plan is to track your current spending patterns. You need to know how much it costs you to live, both in terms of mandatory costs (such as out-of-pocket health care expenses) and discretionary outlays (such as restaurant tabs).

Unless you routinely track these numbers (on paper or with a specialized personal finance tool, such as Quicken), assembling these data can be time-consuming. To avoid paying an adviser to assist with this grunt work, Tyson suggests you scrutinize your account statements and do these tabulations yourself before going to see the planner.

An online retirement calculator can be another handy tool. Tyson recommends the free online calculators available through such investment firms as T. Rowe Price (www.troweprice.com), Vanguard (www.vanguard.com), and Fidelity (www.fidelity.com).

Such calculators can help you estimate how much money you'll need to cover your expenses in retirement.

-- Don't overestimate your home's appreciation potential.

It's true that since the post-recession economy started improving, residential values have gradually risen in many areas. But in most neighborhoods, the upside potential for real estate remains limited. Because of that, Tyson says it's unwise to stake your financial future on the notion that you could fund your retirement by selling your house for a big profit and then moving.

"Of course, it's psychologically comforting to pay off your mortgage before retirement. But it's also true that you'll need probably need much or all of your savings to get you through your retirement years," Tyson says.

-- Don't forget your lifestyle preferences when weighing financial decisions.

Through the years, Casey has noticed that his clients vary widely in terms of how they wish to live in retirement. For example, some intend to pursue expensive hobbies and travel abroad in luxury. Others are happy with home cooking and inexpensive camping trips with their grandchildren. Most plan to stop working entirely, but many intend to work part-time for as long as possible.

Why are your retirement lifestyle expectations relevant to your mortgage planning? Because your living expenses, along with your income levels, can be a major factor determining how much you could afford for mortgage payments.

"In your prime retirement years, you don't want to shortchange yourself just for the satisfaction of having a paid-off home," Tyson says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Some years ago, most people followed the old adage repeated by real estate pros: "Buy the least expensive house in the best neighborhood you can afford."

Back then, you didn't have the means to buy an upscale place in the area you chose, so you had to settle for second-best. Now that you must sell, how can you and your listing agent present the house in such a way as to make the most of the situation?

"There's absolutely no need for panic," says Mark Nash, author of "1001 Tips for Buying and Selling a Home." "Across time, property values in posh neighborhoods always stay strong," he states.

Home values hold up well in fancy neighborhoods because status always sells, says Joan McLellan Tayler, the author of several real estate books.

But Nash cautions that the owners of a small house in a grand neighborhood -- what he calls a "C level" house in an "A level" area -- should avoid inflated expectations.

"Don't fall in the trap of thinking you can get an inflated price for your house because it's surrounded by palaces. But console yourself by knowing that on a square- foot basis, you'll probably get even more than the big guys," Nash says.

Why do homes of any size sell well in an elite neighborhood?

Here are a few pointers for the sellers of a modest home in a classy area:

-- Don't overshoot on price.

Sellers who overshoot on price at the outset can be severely punished later, especially if their property lingers unsold for a long time and all the excitement drains away. Then you may have to sharply discount the house to get it sold, Tayler says.

If you're at the lower end of the price range in a neighborhood with widely varied properties and many large homes, she says you should be especially careful to hit the price target correctly on the first try.

When comparing your modest home with a larger one with sumptuous features, make sure you and your agent adjust for the difference in amenities as well as size.

-- Make the appearance of your front yard a priority.

Though the yard in front of your modest property may lack the grandeur of the grounds around other nearby homes, you'll still benefit significantly from landscape upgrades, Nash says.

Consider hiring a landscape designer to create an overall plan for your yard, emphasizing blooming plants. Then to save money, do your own installation of the trees and shrubs included in the plan.

Also, make sure all your greenery, old and new, is pruned below window level so as not to hide the intrinsic beauty of your place.

-- Focus on fine detailing for minor upgrades to your interior.

Realtors are understandably reluctant to recommend major renovation work, such as the addition of a full family room to a house that has only a small den. That's because sellers often don't recoup the cost of major improvements, even in a fancy neighborhood.

But Nash says you can expect to be well compensated for money outlays on quality interior improvements.

"Though your house is small, top-grade detailing gives potential buyers visual clues that you fit into the neighborhood. Perceptive purchasers appreciate fine moldings, well-chosen paint colors and specialty wallpaper," he says.

You'll probably also want to steer clear of the painter offering the lowest bid. When it comes to painting, preparation is more important than price. To obtain a superior job, the painter should do extensive preparation of walls and trim.

"A superb paint job can iron out lots of flaws," Nash says.

-- Zero in on your floors.

Many brand-new homes still feature wall-to-wall carpet, especially in bedrooms. But Nash says an increasing number of buyers, including many young millennials, favor hardwood floors.

"Hardwood is architecturally elegant and conveys good taste. In contrast, wall-to-wall carpeting seems retro and tired," he says.

Nash urges sellers who already have hardwood floors to consider getting them refinished. Those living in prestige communities may even wish to replace wall-to-wall carpeting with new hardwood in parts of their property that are highly visible.

-- Consider hiring a home stager or an interior designer.

Clearly, sellers have the best intentions when trying to choose and arrange furnishings in a way that best shows off their property. But as Nash says, few sellers possess the experience and skills to create the best possible look.

One way to enhance your home's appearance is to hire a professional home stager recommended by your listing agent. Or heed the advice of Nash and engage an interior designer for an hour or two's worth of advice on furniture arrangement and paint colors. One source for referrals is the American Society of Interior Designers (www.asid.org).

"For that small house in an elite neighborhood, a minor makeover can make a world of difference to your success as a seller," Nash says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Rents are rising everywhere, but mortgage rates remain alluringly low. The combination is enough to entice many wannabe homebuyers into the market. But once there, some are haunted with misgivings and second thoughts.

"(Some prospective buyers) fear making a long-term mortgage commitment," says Ashley Richardson, a seasoned real estate agent who's affiliated with the Council of Residential Specialists (www.crs.com).

She tells the true story of a pair of clients who'd love to own a home. But they were obsessed with worries about the implications.

After a long and meandering property search, the couple finally settled on a new suburban townhouse. But after an anxiety-ridden two days, the couple phoned Richardson to say they were backing out of the deal during their right-to-rescind period.

Fast forward several months and the couple found another property, one that met all their needs. But they lost out on that house, as well, by submitting a lowball offer they knew would come in below that of rival bidders.

To calm their fears and frame a realistic view, Richardson advises nervous young buyers to consult others in their age group who've already bought a home.

Here are a few pointers for buyers:

-- Keep in mind your reasons for wanting to buy.

Fear is a powerful factor that can stop people from realizing their home-buying plans, even when logic tells them to go forward, says Sid Davis, a real estate broker and author of "A Survival Guide for Buying a Home."

"Obviously, no one has a crystal ball about real estate values or about rental rates. But everyone needs housing, whether that be rental or purchase. So if your dream is to own a home of your own ... you might kick yourself later if you let worry stop you," Davis says.

-- Seek the early backing of a reputable mortgage lender.

Though federal mortgage standards are gradually becoming less stringent, most lenders still go to great lengths to ensure that the loans they originate are solid. That means borrowers must be prepared to respond to their lender's request for documents.

As proof of income, many lenders now insist on more than the customary pay stubs and W-2s. For example, they'll likely ask for at least two years' worth of tax returns. Also, they'll probably want proof that the funds for your down payment have been in your savings or checking account for some time and weren't borrowed from your grandmother just last week.

In addition, a good lender will provide you lots of guidance on how to overcome hurdles -- like rectifying errors on your credit reports, Davis says.

The time you spend documenting your financial fitness to buy a home is well spent if the lender gives you a "pre-approval" letter, a vitally important tool as you negotiate for a property.

"Another advantage of pre-approval is that it helps you define your comfort zone on how big a mortgage you can afford. And that can help dispel your fears about overspending," Davis says.

-- Take a cautious approach to home selection.

Last year, many neighborhoods were short on property available for sale. But inventories are now gradually rising, and more would-be sellers are expected to surface as spring approaches. Davis says homebuyers always have good reasons to be choosy, though not irrationally so.

"Home-buying is like dating to find the right person to marry. You want to be open-minded. But you also don't want to look for a level of perfection that's impossible, because every house has flaws," Davis says.

Having lots of choices is a positive for buyers, but not if it promotes perpetual indecision that delays the realization of their goal. Those who find themselves delaying indefinitely may wish to work with an agent to formulate tighter screening criteria.

"Start with a list of maybe 10 or 12 houses in the best neighborhood you can afford. Then, gradually narrow that list to a shorter one. In the process, you'll learn more about what you're looking for," Davis says.

However, he cautions wariness about any agent who tries to convince you to buy a place that doesn't meet your core criteria, no matter how favorable the price.

-- Screen for homeowners eager to sell soon.

Tom Early, a real estate broker and past president of the National Association of Exclusive Buyer Agents (www.naeba.org), says that during all selling seasons there are some "test-the-market" sellers who have no urgent need to move. But there are also highly motivated homeowners who must move due to professional relocation, a financial setback or divorce.

"If a property is vacant, it's likely the sellers are eager," Early says.

Even if the home isn't vacant, there are ways to assess the sellers' level of motivation. Early says many owners, along with their listing agents, are remarkably frank.

"Some people are astoundingly candid about why they must move. They'll even tell you about their serious money problems or the breakup of their marriage. You don't need to pry, just ask why they're moving and they'll open up," Early says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)