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He said previously that he doesn't have the best credit rating.
Mom owns the house free and clear. She doesn't need a bank to write the mortgage. A title company will process the payments for a pittance. She sells the house to him, with lifetime tenancy, and collects a monthly income. When she dies, he inherits the balance on the mortgage and owns the house free and clear. Win-win for both of them.
Mom owns the house free and clear. She doesn't need a bank to write the mortgage. A title company will process the payments for a pittance. She sells the house to him, with lifetime tenancy, and collects a monthly income. When she dies, he inherits the balance on the mortgage and owns the house free and clear. Win-win for both of them.
They are buying a new home that will require a mortgage. If the OP says they have enough income to pay all the expenses including the mortgage, why not get the mortgage in the OP's name?
Let the mom have a free and clear roof over her head. All retirement funds safe and secure.
Trying to figure out the smartest way to handle an upcoming move with my family.
My mother (72) is retiring in the next few months - she's finally decided it's more bother than enjoyment. We all live together in the house she owns completely.
After she retires, we plan to move to a new house that she pays for 100%. Not talking about an expensive house here -- maybe up to $175k tops. She has enough to pay this with her savings at present. Her current house is not in great shape and will probably get sold to a flipper for maybe... $80-100k. Her credit is great. She's in great health if that matters. My credit stinks and I do not have a huge chunk of savings or investments.
Questions:
Is it better to just buy a house outright with cash and have basically nothing left other than her SS and small pension income? Or should she get a mortgage (before or after retirement?) and put 50% or some other huge amount down?
Obviously, I have an income that can cover all living expenses for all of us, including whatever a mortgage would be on that value of house.
In my uneducated-about-real-estate head, it makes sense to get a mortgage before retirement, buy a house, move, then sell this house asap, pay off the mortgage asap, and enjoy life. Mostly to have some financial cushion in case something expensive happens.
Am I wrong? Any recommendations?
I've been trying to figure out something similar and there are so many variables its tough. Ultimately I think you end up going with what you feel comfortable with. Personally I like the idea of hanging on to as much money as I can. If the economy tanks, your circumstances change etc. you have more options. You can sell at a loss if you have some money in the bank and downsize if need be. If something happens and all your money is in the house, the real estate market tanks and you are underwater, you'd have to sell at a loss anyway.
My credit is on the mend, but I (perhaps wrongly?) believed that you get a better mortgage more easily with good credit. That seems to make sense.
Also, while I have savings, I do not have a HUGE chunk to put down a large downpayment like my mother does.
The plan is for the house to be sold and the money divided up between my sisters and me after my mother's death... just like the rest of her belongings, etc. If she got a reverse mortgage, there would be more money floating around now, but the end result would be the same it seems.
ETA -- My father is in a nursing home at present (they're divorced), so we (meaning my sisters and I) understand all the ins and outs of that process and the financial aspect.)
You all have given me a lot of avenues to research further, so thank you!
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