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Old 10-20-2014, 03:46 PM
 
284 posts, read 490,133 times
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I am 63 and both my wife and I will be retired in a couple of years. At that point we would like to move to a smaller, less expensive house in order to use the extra money as a supplement to our retirement savings.
The idea would be also to have lower property taxes, lower heating and cooling costs and perhaps maintenance and insurance too.

If the closing of the sale of our house and the purchase of the new house go through on the same day I see no problem, but if we take possession of the new house before the closing of the old house we will need to bridge the gap, and have nothing but our government pensions to show as income.

This must be a common problem so I assume the banks are used to dealing with this kind of short term financing, but would like advice from those who know more about it.....thanks!
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Old 10-20-2014, 03:48 PM
 
Location: Salem, OR
15,518 posts, read 40,267,236 times
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You would have to show that you can afford two mortgages. Most people can't do that so they rent temporarily until their new house closes. It is why PODS (Portable On Demand Storage) has a booming business.
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Old 10-20-2014, 03:50 PM
 
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Would you be staying in the same general area? If so, what about making the move before you quit your jobs? The bank doesn't have to know that you are planning to retire.
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Old 10-20-2014, 04:19 PM
 
284 posts, read 490,133 times
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Wow, that was quick!
We would only be moving about 5 miles or so, we have friends in the area and it is close enough to our son who lives in Toronto that we can visit easily.

I think the bank could tell from our age that we are pretty close to retiring, but then I suppose we would only need the financing for a couple of months.

We would likely buy a new construction home in order to have a warranty and avoid maintenance costs for a few years. Also this would allow us to get just what we want in terms of features and finishes. I think that would make the short term rental impossible, but possibly I am mistaken.
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Old 10-20-2014, 04:36 PM
 
2,645 posts, read 3,314,534 times
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Quote:
Originally Posted by Geezerrunner View Post
I think the bank could tell from our age that we are pretty close to retiring, but then I suppose we would only need the financing for a couple of months.
Lots of people keep working into their 70's. My FIL quit his job at 84. Maybe someone in the mortgage business could answer for sure, but I can't imagine someone 65 being turned down for a mortgage under the argument that you're not expected to work much longer. I think they only care about here and now.

I'd be curious to know, as we've always assumed we were free to move and/or refinance based on our current income all the way up until the day after we actually retire.
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Old 10-20-2014, 04:59 PM
 
Location: Denver CO
24,204 posts, read 19,086,029 times
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Quote:
Originally Posted by Geezerrunner View Post
We would likely buy a new construction home in order to have a warranty and avoid maintenance costs for a few years. Also this would allow us to get just what we want in terms of features and finishes. I think that would make the short term rental impossible, but possibly I am mistaken.
I am in the middle of new construction. I needed to sell my prior house to cover the down payment for this one, and it ended up selling and closing in a month. It's well worth it to me to pay to have my things in storage until the new house is ready to move into. I'm fortunate to have local family that we are staying with, but there are plenty of people in my new neighborhood who have found short term rentals when they need to in similar circumstances.

I don't know what the real estate market is like in your area but I can tell that I started sleeping a whole lot better at night knowing the proceeds from the sale of my old house were sitting safely in my bank account and not trying to juggle simultaneous closings, particularly since new construct delays are so common. Rather than having to deal with putting things in storage last minute, it's been a lot easier doing it all on my own timetable.
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Old 10-20-2014, 05:14 PM
 
Location: Salem, OR
15,518 posts, read 40,267,236 times
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Quote:
Originally Posted by Geezerrunner View Post
Wow, that was quick!
We would only be moving about 5 miles or so, we have friends in the area and it is close enough to our son who lives in Toronto that we can visit easily.

I think the bank could tell from our age that we are pretty close to retiring, but then I suppose we would only need the financing for a couple of months.

We would likely buy a new construction home in order to have a warranty and avoid maintenance costs for a few years. Also this would allow us to get just what we want in terms of features and finishes. I think that would make the short term rental impossible, but possibly I am mistaken.
I don't know. We have a town home development out here that is just month to month with no length requirement. It is owned by a local developer who saw a huge need for people just like you, a place to live while building. I'd see if your area has a place like that.
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Old 10-20-2014, 05:41 PM
 
2,645 posts, read 3,314,534 times
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Twice when we sold our homes but weren't ready to move into the new one, we were able to negotiate a "rent-back" agreement with the new owners of our home. That's the luck of the draw depending on who buys your house, but we got lucky twice so I can't believe it's that uncommon.
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Old 10-21-2014, 08:34 AM
 
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,244 posts, read 80,480,482 times
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We're in the same situation, but planning to move about 40 miles away with a ferry ride in between when we retire. Since I work fairly close to the dock on this end, our plan is to buy and move a year or so before retiring, and just have the longer commute the last couple of years. That way if we do need a mortgage it will be based on our good current income.
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Old 10-21-2014, 12:30 PM
 
13,389 posts, read 6,396,282 times
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Quote:
Originally Posted by LoriBee62 View Post
Lots of people keep working into their 70's. My FIL quit his job at 84. Maybe someone in the mortgage business could answer for sure, but I can't imagine someone 65 being turned down for a mortgage under the argument that you're not expected to work much longer. I think they only care about here and now.

I'd be curious to know, as we've always assumed we were free to move and/or refinance based on our current income all the way up until the day after we actually retire.
I'm not in the mortgage business, but they will use your income at the time you apply and there is no reason or requirement to tell them you are planning to retire.
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