Markola
Thinks s/he gets paid by the post
We are a couple in our mid 50s with no kids and so no legacy/bequest aspirations; we have no debt except a 30 year fixed mortgage at 3.68%; we like our walkable, college neighborhood with its amenities a lot. We refinanced this year and the appraisal was $535,000. We took some cash out to do some work, which ought to raise the value to $600K. According to Zillow, this house’s value has been appreciating 4.25%/year on average for the last 25 years, as far back as the sales records show, in line with the desirable neighborhood in this growing metro area.
Our plan assumes we keep the mortgage for the full 30 years. Even if we can afford the mortgage, however, it helps the portfolio projections a lot if we can be creative to make the mortgage payments stop in about 13 years at around age 67. Ways that we could do that include selling and downsizing or renting it out profitably and living somewhere else. Another idea is to take out a reverse mortgage for the estimated $250,00 loan balance at that time. At 4.25% continued annual growth for 13 years, the house ought be worth about $1 million, so we’d have $750,000 equity. If we were able to stay in the house 30 years until age 84 for me, it would be worth $2 million. Doubtful we could stay that long given the stairs and ability to keep the yard up, but that’s the math.
Does anyone have advice to help us evaluate the option of taking a $250,000 reverse mortgage 13 years from now to pay off the fixed mortgage at my age 67/DW age 70, if we decide then that we want to live in the same house another decade or more? Thanks.
Our plan assumes we keep the mortgage for the full 30 years. Even if we can afford the mortgage, however, it helps the portfolio projections a lot if we can be creative to make the mortgage payments stop in about 13 years at around age 67. Ways that we could do that include selling and downsizing or renting it out profitably and living somewhere else. Another idea is to take out a reverse mortgage for the estimated $250,00 loan balance at that time. At 4.25% continued annual growth for 13 years, the house ought be worth about $1 million, so we’d have $750,000 equity. If we were able to stay in the house 30 years until age 84 for me, it would be worth $2 million. Doubtful we could stay that long given the stairs and ability to keep the yard up, but that’s the math.
Does anyone have advice to help us evaluate the option of taking a $250,000 reverse mortgage 13 years from now to pay off the fixed mortgage at my age 67/DW age 70, if we decide then that we want to live in the same house another decade or more? Thanks.
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