more expensive house at retirement ... bad idea???

[jimandthom]

Have read concerns in this thread and elsewhere, about how hard it can be to get a mortgage when you retire.

I only worked part-time the final 5 months of work, spouse was retired for 5 years. We got a 20 year at 3.125% from the local CU up here. Had to join before we could start the process. Is it really that hard to get when retired?

I can understand not wanting to have a mortgage. We do intend to pay off after about 12- 15 years. An small RMD from an inherited IRA goes into a taxable account for that purpose.

When we are done with ours, there will still be taxes and insurance which is almost 1/2 of our total payment. No mortgage will really be a modest blip in the overall scheme of things.

 

[COcheesehead]

If you defer this decision until after you retire, will your wife's income be enough to qualify you for the mortgage amount you may need? There have been a few posts from retirees living only, I believe, on their invested assets (no pension or annuity income) who have had hard times getting mortgages. At least mortgages with good rates. So that is something to consider if you wait to buy until after you retire.

I can relate to the difficulty of finding a small ranch home. The smaller homes in my area tend to be older, with only one bathroom and a one car garage, or other limitations that would be costly to try to remodel around. I also want a little bit of elbow room, maybe a 1/2 acre or larger lot, and these are really hard to find without a McMansion plopped down in the center. Good luck with your hunt for the perfect home.

We went down the road of looking for all one level and ran into availability issues. We looked at two stories and found out you can retrofit some with a new tube type elevator. We thought that was a possibility, but as luck would have it, we found an existing house with an elevator already installed.

 

[NoiseBoy]

Have read concerns in this thread and elsewhere, about how hard it can be to get a mortgage when you retire.

I only worked part-time the final 5 months of work, spouse was retired for 5 years. We got a 20 year at 3.125% from the local CU up here. Had to join before we could start the process. Is it really that hard to get when retired?

I think the difficulty may hinge on whether or not the retiree has a pension or other form of annuity income. My BIL easily qualified for a very favorable mortgage at age 70. But he has a COLA'd pension and Soc Sec that puts their household income above the median in my city. The comments I dimly recall were from folks who had a high net worth, but no pension income. Another factor is current income while working versus expected income in retirement. Mine is going to be much, much lower. Also, like the OP, my present home is modest, so I'm looking at paying more for my retirement dream house than I will realize from the sale of my home. I may decide to take the advice to wait until I've been retired for a year or so before jumping into the real estate market.

 

[Katsmeow]

Have read concerns in this thread and elsewhere, about how hard it can be to get a mortgage when you retire.

I only worked part-time the final 5 months of work, spouse was retired for 5 years. We got a 20 year at 3.125% from the local CU up here. Had to join before we could start the process. Is it really that hard to get when retired?

Well, will depend on sources of income. DH and I are both on SS so we used that as income as well as IRA income. I set up a monthly withdrawal from my IRA and provided proof of it to the mortgage company and that, along with the SS, was sufficient.

 

[jimandthom]

When we applied, I had no income as had just stopped working a month before we applied for the loan. The employer was 400 miles away at what would become our previous home and I had no desire to commute.

We did have spouses pension of 40K and a small inherited IRA of approx. 3K per year. I guess that must have been enough. Our income was higher than the median household income for the county.

Is it a case that income regardless how modest is preferred over assets regardless how substantial or accessible?

 

[Teacher Terry]

We retired and immediately bought a smaller house. Then we remodeled it before moving in.

 

[RobbieB]

A smaller house in a better location sounds good to me. A house with no stairs is a good thing for seniors. Falling down the stairs is lethal and hospital bills are really high.

I'd lose more sleep over falling down the stairs than working 6 more months.

 

[Katsmeow]

A smaller house in a better location sounds good to me. A house with no stairs is a good thing for seniors. Falling down the stairs is lethal and hospital bills are really high.

I'd lose more sleep over falling down the stairs than working 6 more months.

When we moved last year we moved to a smaller house in a much better location. DH's one absolute was --- no stairs. I agreed. (He didn't really want a pool either but that was one he had to give on. Rejecting a pool was really limiting our choices in a very hot, tough market).

 

[jimandthom]

We retired and immediately bought a smaller house. Then we remodeled it before moving in.

We are mid way through a reno that is enlarging the 1st floor bath for greater access in our declining years. Should we need, the 1st floor secondary living area can become a bedroom.

A smaller house in a better location sounds good to me. A house with no stairs is a good thing for seniors. Falling down the stairs is lethal and hospital bills are really high.

I'd lose more sleep over falling down the stairs than working 6 more months.

We do have a bunch of stairs--- to even get into our house, there are 4 (front) 5 (back) stairs to get to the door.

If we had a single floor near ground level, there were a couple of times this year that the doors would have been drifted in. One windy snow storm did drift heavily onto the front porch.

 

[Dtail]

Moved 3 weeks ago to a one level house, as not wanting to think about stairs later on in life and be forced to move just for that reason.
Luckily, FLA has many one story SFH's which are built post 2005.

 

[W2R]

We are mid way through a reno that is enlarging the 1st floor bath for greater access in our declining years. Should we need, the 1st floor secondary living area can become a bedroom.

A smaller house in a better location sounds good to me. A house with no stairs is a good thing for seniors. Falling down the stairs is lethal and hospital bills are really high.

I'd lose more sleep over falling down the stairs than working 6 more months.

We do have a bunch of stairs--- to even get into our house, there are 4 (front) 5 (back) stairs to get to the door.

If we had a single floor near ground level, there were a couple of times this year that the doors would have been drifted in. One windy snow storm did drift heavily onto the front porch.

I can't even imagine the mental gymnastics that would persuade me to live in such a location (by that I mean a location where I felt I had no choice but to live in a house with stairs after age 70). But each to his/her own...

 

[albireo13]

I will have. modest pension once I retire ($30K/yr) plus my wife will still be working so her income will be intact for another 3+yrs. She has a 6-figure salary.
I will hold off on SS at least until FRA.
I think we should be able to land a mortgage. The issue to me is what will happen to the mortgage rates by then ... will they shoot up?

 

[yakers]

Sold our small single family home for a larger condo 8 years into retirement. Not exactly my idea but cheaper than a divorce.

 

[Teacher Terry]

WR2 , when you mentioned in one thread about Mr. MM not being thrilled with his home it’s because his wife and son remain in the family home he remodeled. He bought another house and will probably do the same.

 

[W2R]

WR2 , when you mentioned in one thread about Mr. MM not being thrilled with his home it’s because his wife and son remain in the family home he remodeled. He bought another house and will probably do the same.

I sure hope so. He doesn't sound at all happy with the house he has, especially with the pergola, the tiny patio, and the house's location. I feel sorry for him.

Also, to JimandThom, I wrote (above) that:

I can't even imagine the mental gymnastics that would persuade me to live in such a location (by that I mean a location where I felt I had no choice but to live in a house with stairs after age 70).

JimandThom, when I re-read my post, it sure sounded snotty! I'm sorry; I have never lived as far north as your area and I am pretty ignorant about it; but I didn't mean to write something like that. Maybe when you grow older, if stairs become tough for you to handle, you could have a ramp built to use instead of stairs when the snow is deep.

 

[MarieIG]

Well, I would be ok with a more expensive home, if it could be done comfortably. I would not want to go through financial gyrations to pay for it.

Anyway, my dream home could be slightly larger, but I would prefer a lower monthly overhead. All living could be done on the main floor. I would like a decent amount of storage, a nice size kitchen, master bedroom with an ensuite (learned that from HGTV) with a tub, and walk in closet.

Ok, after having had to share the bathroom with seven males (just THINK of all the cleaning that entailed) can make one fantasize about having one's own bathroom.

 

[Teacher Terry]

WR2 , MM may not have bought the right home after the divorce but with all his money he can afford to make mistakes. When you grow up in snow country you never even think about it. My aunt lives in Wisconsin at 94 in her own apartment.

 

[ivinsfan]

I sure hope so. He doesn't sound at all happy with the house he has, especially with the pergola, the tiny patio, and the house's location. I feel sorry for him.

Also, to JimandThom, I wrote (above) that:


JimandThom, when I re-read my post, it sure sounded snotty! I'm sorry; I have never lived as far north as your area and I am pretty ignorant about it; but I didn't mean to write something like that. Maybe when you grow older, if stairs become tough for you to handle, you could have a ramp built to use instead of stairs when the snow is deep.

Snotty, don't worry about sounding snotty, I live up in the North too and am hard pressed to figure out why I haven't fled years ago. It's just as miserable as you think it is..we have 4 grandkids 8 and under so I guess that's why we hang around...

 

[jimandthom]

I sure hope so. He doesn't sound at all happy with the house he has, especially with the pergola, the tiny patio, and the house's location. I feel sorry for him.

Also, to JimandThom, I wrote (above) that:


JimandThom, when I re-read my post, it sure sounded snotty! I'm sorry; I have never lived as far north as your area and I am pretty ignorant about it; but I didn't mean to write something like that. Maybe when you grow older, if stairs become tough for you to handle, you could have a ramp built to use instead of stairs when the snow is deep.

No offense taken. Its sort of the Yooper way.

Its a land that time and progress has somewhat forgot. Or, we purposefully ignore time and progress. We have only about 300K people that live in the UP and it is 1/3 of Michigans total sq mileage. On the few occasions that we go down below, it is a weight off our shoulders when we cross the Mac Bridge.


https://www.mackinacbridge.org/events/event-photo-galleries/ This is one of the most beautiful brides in the country. Had to put in a plug.

 

[RenoJay]

If you’re losing sleep, to me that gives you the answer right there. But I will suggest it’ll be easier to get a mortgage while you’re working than after you stop.

 

[Sconie]

So what----you've got to put off retirement for 6 mo to a year to get a home you like. IMHO, go for it! Remember, you'll remember the quality long after you've forgotten the price----being in a home that you want to be in is incredibly important in retirement. Ultimately, the question(s) which you need to answer is, what are your priorities----what is important to YOU!

 

[Sirka]

consider a mortgage?

If it will cause you worry and stress, and a perceived stretching of the budget, I would not do it. Retirement is a time for less stress and worry about money, not more.

+1
After we sold our house we rented in a resort area that we liked. We found a lot to build a new house in the area. No way would I consider a mortgage, since the paychecks stopped coming after retirement. We had money leftover to pay the rent and enjoy early retirement. Our budget had changed to include rent every month. Spending down assets is hard to get use to at first!

 

[gooddog]

Here is a way to buy a home that might be a bit out of budget and get something out of it - buy a house that has a guest house and rent it out on VRBO. Wife and I do just that, and it is great meeting people from around the world, and we pocket more $ than I care to admit. If you live in an area that it would work in, it provides income, something to do, interesting people to meet, and can give you the ability to buy more house than you could otherwise justify. By the way, any member of this site is welcome to contact me if you want to stay at a nice place on the ocean and go to the Redwood National Park.

 

[Crabbyjerry]

I sure hope so. He doesn't sound at all happy with the house he has, especially with the pergola, the tiny patio, and the house's location. I feel sorry for him.

Also, to JimandThom, I wrote (above) that:


JimandThom, when I re-read my post, it sure sounded snotty! I'm sorry; I have never lived as far north as your area and I am pretty ignorant about it; but I didn't mean to write something like that. Maybe when you grow older, if stairs become tough for you to handle, you could have a ramp built to use instead of stairs when the snow is deep.

While trying to read and understand some of the post which sometimes have my head spinning with the financial knowledge that quite a few on here have, one thing that I admire on this forum is the class that you show for each other. W2r , your apology shows what this forum is made of compared to other forums on the web.

 

[W2R]

While trying to read and understand some of the post which sometimes have my head spinning with the financial knowledge that quite a few on here have, one thing that I admire on this forum is the class that you show for each other. W2r , your apology shows what this forum is made of compared to other forums on the web.

Aw, thanks! I try. Sometimes my posts don't get across the meaning and good intentions that I had when writing them. That happens especially if I am distracted or trying to write the post quickly for some real life reason or other. I never mean to be nasty to people but you know how it is on the internet - - no body language, no facial expressions, so it's hard to tell one's intent.

I think the experience of living in northern Michigan like JimandThom, is fascinating. I loved the photos of the bridge.