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View Poll Results: Have you taken on new mortgage debt after retirement?
Yes 13 12.87%
No 87 86.14%
Other (explain in post) 1 0.99%
Voters: 101. You may not vote on this poll

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Old 03-15-2015, 02:13 AM   #21
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We belong to several credit unions and all will consider retirement / investing portfolios in making loans and/or count 401K transfers to a checking account as "income".
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Old 03-15-2015, 11:30 AM   #22
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I've heard conflicting information on how lenders count "pension" income that is discretionary (like Roth conversions) but as I recall to mortgage brokers told me that if it shows up on the 1040 then it counts, but I've heard from some posters that it doesn't count, so it seems that practice varies.
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Old 03-15-2015, 04:08 PM   #23
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We choose to have no debt but as others have posted there can be very good reasons for taking on a mortgage. Whether doing so is a good thing is highly individual to each person's circumstances.
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Old 03-15-2015, 04:20 PM   #24
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I bought a new car when I retired and paid for it with a home equity loan, so the interest would be tax deductible. In retrospect, it wasn't worth the hassle, so I paid it off after a year or so.
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Old 03-15-2015, 06:42 PM   #25
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We bought our house about 9 months before I retired, 30 yr VA loan at 4.25%. A little over a year later, this past December, re-financed to 3.50% with very little cost (around $1700 total). Also, I recently bought a new 2014 Chevy Silverado pickup. Financed too, but intend to accelerate payments to pay off in 18 months.

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Old 03-15-2015, 07:18 PM   #26
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I put other.

I paid off our house just prior to retiring...
And just after retiring applied for (and qualified for) a HELOC. Haven't tapped it. It's there in case I want to do income "smoothing" from one year to the next for tax or ACA purposes.

As far as qualifying for new debt when retired... we have small income (DH's ss, one rental income) and the rest is draw down from savings... Not only did we qualify for the HELOC with no issue. Just today I applied for a penfed visa (for the chip and PIN function) and qualified in about 10 seconds.
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Old 03-15-2015, 10:07 PM   #27
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I guess it's not clear to me what the OP is looking for. Is this a poll to see the ratio of people who took on more debt, or to try to figure out what the pros/cons of debt in retirement is?

I don't think ratios of replies will tell you anything useful. Maybe those same people who replied "NO" would take on debt under favorable condition, but those conditions have not appeared. Maybe they wouldn't under any circumstances. The same numbers could be true for very different reasons.

I still carry a mortgage, and I really haven't had any reason to take on more debt. But if there was an opportunity, I'd do the same thing I did before I was retired, and as daylatedollarshort mentioned: "I do what the numbers in my spreadsheet tell me to do. I just try to maximize my long term net worth after accounting for taxes, tax credits and inflation. "

Other than possible verifying income issues, I don't see any difference in the debt decision pre/post retirement.

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Old 03-15-2015, 11:08 PM   #28
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In OP's case, the 75K mortgage probably won't help with itemizing expenses, depending upon all the other tax factors, but it could help from forcing a large taxable IRA withdrawal.

But of course, the cost of getting the 75K mortgage is probably going to be 1K->2K as the its the same work as getting a 300K mortgage. Sort of expensive.
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Old 03-15-2015, 11:16 PM   #29
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I don't have any problem with getting or keeping a mortgage in retirement, especially at today's incredibly low rates.

I just personally haven't done so.
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Old 03-16-2015, 09:48 AM   #30
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Quote:
Originally Posted by ERD50 View Post
Other than possible verifying income issues, I don't see any difference in the debt decision pre/post retirement.
Well said. Exactly my feelings.
Bruce
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Old 03-16-2015, 09:48 AM   #31
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I ER'd 4 yrs ago and paid off my mortgage 2 yrs ago. I voted no because getting rid of my mortgage was part of my financial plan. However, a debt payment is just an expense. If you can afford it and you want to buy something then why not?
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Old 03-16-2015, 11:18 AM   #32
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I'm normally the most anti-debt person you could find, but I recently got a mortgage.

We've been talking about moving to a condo for our "final" home (until a CCRC) for several years, and just found a perfect one.

We'd rather take our time moving before putting this house on the market, so it was either a mortgage or sell a bunch of investments to buy the new one.

I was lucky enough to find a 2.5% mortgage (with half a point) and low closing costs, so it made sense to do that. It's a 5/5 ARM, and I'll pay it off after selling the current house.
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Old 03-16-2015, 12:11 PM   #33
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I always try to build long term spreadsheets for different scenarios. I can't make the numbers work for either downsizing, at least in the near term, or paying off the mortgage because of the tax implications and the current likely projections of alternative uses of our money not doing much better (stock valuations are high, interest rates are still low). Our initial gut reaction was if we downsized it would help pave the way to ER. But the reality is a chunk of our our mortgage payment is principal and paying on that does not change our net worth, I am planning for our house to at least keep up with inflation, we have to live somewhere, we have Prop 13 for property taxes so moving doesn't lower them but could make them higher, smaller houses in our local area cost more per square foot and usually have pricey HOA fees, and a hundred other factors.

So we have a mortgage and it looks like we won't be paying it off, even though my reptilian brain says a smaller, mortgage free house should be less expensive. In many cases this might be true. But for us, our local real estate prices, our 30 year mortgage interest rate, our Prop 13 tax base and tax situation it just doesn't seem like it would be a good long term financial move.
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