Author Topic: buying house in retirement?  (Read 509 times)

albireo13

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buying house in retirement?
« on: September 21, 2018, 05:13:21 AM »
We would like to downsize one more time soon ... within next 5 yrs ... to a more aging friendly house.  WE like our current house but it has too little storage, lots of stairs to get in and out, plus a steep driveway which is a PITA to deal with in the winter.  We want our last house purchase, something that will last us the next 20+ yrs or until a CCRC.
I am 62 and DW is 58.  I will retire within 2 yrs and DW is thinking 4-5 yrs.   

  We are in southern NH and real estate is not cheap where we are.  Also, some of the towns we like make our commutes too painful.   We still will have to do a mortgage.

   So, we have a sort of dilemma.   Do we wait 4-5 yrs to retire and then downsize?  We'd have more time to plan and get things in order.  Our options will also be greater since we no longer have to worry about commuting.  Some lower tax towns will now be an option.   : )

  On the other hand, we'd have to obtain a mortgage when we'll be on a lower, retirement income.   How much of a challenge is that??
Also, I worry about interest rates creeping up.

  Anyway, we're going back and forth on our strategy and have gotten mixed recommendations from people we know.

Any thoughts from folks who've faced this?   words of advice?

Thanks a bunch.

MJseast

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Re: buying house in retirement?
« Reply #1 on: September 23, 2018, 05:13:18 PM »
If you still have 4-5 years of commuting and wouldn't be able to move to lower priced town that you really like, then I would wait until you're closer to retirement. Meanwhile you can really explore all the potential towns and neighborhoods and hopefully you'll narrow in on a place that you love.

I don't know if it's more difficult to get a mortgage in retirement, but I wouldn't be surprised if it was. Will your proceeds from the sale of your current house help with that? I guess I would just plan to apply for the mortgage right before you retire while you can still show proof of income.

clarkfan1979

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Re: buying house in retirement?
« Reply #2 on: September 24, 2018, 09:54:37 AM »
My wife's grandparents got a mortgage in retirement in November 2017. They sold their house in CA for about 750K. I think they had about 100K left on the mortgage. After transaction fees I think they walked with about 600K. I think they spent about 50K fixing up the house in Jan 2017 to June 2017 and sold in June 2017.

They bought a house in Colorado for 565K and wanted to be able to purchase it in cash. I think rates went down in September 2017 when they got the house under contract, so they ended up getting a mortgage. I don't know their rate, but I think it should be under 4%.

They said it was a huge pain in the ass to get a mortgage in retirement. They said the mortgage lender asked for their bank statements to calculate their spending. They claim the mortgage lender first denied them because their spending was too high. They probably normally spend 75K/year, but they spent an extra 50K that year fixing up the house. I don't know if this part is true, but this is what they told me.

When they were trying to get a mortgage on their primary home they had 1.5 million in paper assets, 600K in cash and a paid off townhome rental worth about 450K that rents for $2500/month.

Dicey

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Re: buying house in retirement?
« Reply #3 on: September 24, 2018, 11:16:15 AM »
My wife's grandparents got a mortgage in retirement in November 2017. They sold their house in CA for about 750K. I think they had about 100K left on the mortgage. After transaction fees I think they walked with about 600K. I think they spent about 50K fixing up the house in Jan 2017 to June 2017 and sold in June 2017.

They bought a house in Colorado for 565K and wanted to be able to purchase it in cash. I think rates went down in September 2017 when they got the house under contract, so they ended up getting a mortgage. I don't know their rate, but I think it should be under 4%.

They said it was a huge pain in the ass to get a mortgage in retirement. They said the mortgage lender asked for their bank statements to calculate their spending. They claim the mortgage lender first denied them because their spending was too high. They probably normally spend 75K/year, but they spent an extra 50K that year fixing up the house. I don't know if this part is true, but this is what they told me.

When they were trying to get a mortgage on their primary home they had 1.5 million in paper assets, 600K in cash and a paid off townhome rental worth about 450K that rents for $2500/month.
It's a huge pain in the ass to get a mortgage of any kind these days, retired or not. My guess is they have no recent experience, therefore it seemed worse than they remembered. It's mostly because of all the new layers of verification required since the mortgage meltdown, not specifically because they're retired.

We've purchased five properties in five years and done one re-fi. Each one was its own fresh hell even with great credit scores, big DP, and tons of assets. And DH is still working. Total clusterfucks, every one. I still have the file from my first home purchase. It's about 1/5 the size of any of the recent transactions.

Alanwatts

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Re: buying house in retirement?
« Reply #4 on: September 27, 2018, 03:35:15 AM »
Great to hear that at this age you and your DW is thinking of shifting to the other house. Well, if you are not in the condition to take the decision on your own regarding the estate planning then according to me you should contact the estate planning attorney for the help and guidance. You can even get the mortgage in the retirement stage, but for that, you may need to apply for the procedure of taking help from the lawyers.