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When to buy retirement house?
Old 10-08-2012, 08:27 PM   #1
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When to buy retirement house?

I am 52, DW 49 - I have been at my current employer 16 years and she with hers for 6 years. Last child heading to college Fall 2013 and our plan is to put semi retirement plan into motion.

The plan (God laughs):

1) Put current house on the market in June 2013, move into apartment if house sells fast, which is likely in our area.
2) I give notice to employer that I will be terminating at year end 2013, employer would appreciate the notice, no issues.
3) DW starts looking for full time employment in new locale - she is a CPA, in Tax (work for 5 -6 years)
4) Start looking for new house in new locale (have already narrowed down price, area, etc, made easier as her parents live in the area).
5) I will seek part time work in new locale (work for 4-5 years)

While I am sure there are many questions and advice on each item mentioned, what I am really hoping to get is advice on timing the real estate transaction effectively.

1) I would think that it is best to be employed with my current employer when seeking the mortgage on the new house?

2) Do I need to sell the current home before buying the new one so that the interest rate on the loan is not priced as a 2nd home when in fact it will shortly become the primary residence? I don't need the equity in the current home to provide the down payment for the new home which I intend to obtain a 30 year mortgage but payoff within 5 years.

Would appreciate any insight from others who have been in a similar situation.
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Old 10-08-2012, 08:56 PM   #2
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Moving to an apartment That's exactly what DW and I want to do, however, our kids got another 5 years to go. Why do you call it "retirement house" when your wife is going back to work full time and you are looking for part time?? I don't really get a clear of financial situation other than that you still need to finance your "new" retirement home for another 30 years. Sorry I am not much of a helper and don't really have any advice. I just think that you are "relocating" rather than buying a "retirement home".

Enuff Clueless :-)
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Old 10-09-2012, 08:23 AM   #3
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Personally, I wouldn't move into an apartment and then move again, especially if you are planning on buying a house in your new location. You will either be getting rid of a bunch of stuff you are gonna need or paying to have it in storage.

Depending on the lender, if your intent is to live in your new home, it is considered your primary.
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Old 10-09-2012, 08:30 AM   #4
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FWIW, before I retired I assumed we MUST decide where to retire to so we could move as soon as I retired, literally within weeks. Where I got the idea that we had to move immediately is beyond me, but eventually I realized there was no such time constraint. Our plan is to:
  1. Rent somewhere in the Triangle area (plan 12 months, but no rigid timeframe, going month to month on a lease would be helpful)
  2. After 3-6 months, if we're still convinced we want to move, put the house in Chicagoland up for sale.
    1. If we don't like the Triangle area, we just move back to Chicagoland. Other than winters, it's a great area.
  3. Begin looking for a home in the Triangle, but casually at first.
  4. Ideally when the house sells, buy the next house in the Triangle area. We may get caught with two houses for a while, but if the new house is that irresistable, so be it.
I retired 16 months ago, and we're perfectly happy living in the Chicagoland house. There's no reasons I can think of to hem ourselves in on timing, one of the bennies of being retired...

A co-worker of mine bought a retirement house in AZ about 5 years before retiring (just before the real estate meltdown). A few years later, he put his primary house up for sale, but it just sat on the market with no buyer interest at all. After waiting for two years, a buyer finally showed up and make him a ridiculously lowball offer, even demanded they get all the furniture and could take possesion in 30 days! He was so tired of waiting, he took the offer, but he was not happy about it. Even though he really didn't have quite enough of a nest egg and no plan for health care, he announced his retirement and left within a month. He lost is a__ financially, but he made the move, and hasn't looked back. God laughs indeed...
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Old 10-09-2012, 08:34 AM   #5
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Some people (like me) spend a lifetime trying to figure out what they want to do when they grow up. Others (like Midpack) spend retirement trying to figure out where they want to live once they are retired.

It's all good - everyone needs a hobby...
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Old 10-09-2012, 09:19 AM   #6
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Midpack - thanks for your reply. Are you concerned about how the mortgage company will view being retired, if you are obtaining a mortgage? If paying cash I can see how it doesn't matter.
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Old 10-09-2012, 10:07 AM   #7
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Quote:
Originally Posted by Newventurer View Post
Midpack - thanks for your reply. Are you concerned about how the mortgage company will view being retired, if you are obtaining a mortgage? If paying cash I can see how it doesn't matter.
We don't plan on taking a mortgage unless there are property tax advantages (there are where we live now), and even then we'll pay the mortgage off as soon as terms allow (within a year or less). That said, I realize the current interest rates are compelling, so I can understand why some might consider a mortgage.
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