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Old 06-28-2018, 10:45 AM
 
1,931 posts, read 1,158,804 times
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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?
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Old 06-28-2018, 11:09 AM
 
Location: The Triad (NC)
26,833 posts, read 57,830,396 times
Reputation: 29215
Quote:
Originally Posted by Murk View Post
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...
MOM should visit an attorney who specializes in elder law matters.
Some objective 3rd party to hash out her concerns and ideas and who can help with the legalities.


She should do this VERY soon and do so **without** your "help"...
and before she makes any changes in her legal work status...
and absolutely before she even considers making any other financial decisions or changes.
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Old 06-28-2018, 12:20 PM
 
Location: The Berk in Denver, CO USA
13,112 posts, read 18,707,927 times
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I see the potential for elder abuse here.
MrRational writes wisely.
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Old 06-28-2018, 01:05 PM
 
Location: Raleigh NC
7,749 posts, read 6,110,007 times
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for real. your credit stinks, and you have no cash beyond your next paycheck, and you're however old and living with your mom without any stated emotional/physical care need of hers.

and you want to try and give her financial advice?
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Old 06-28-2018, 02:31 PM
 
1,931 posts, read 1,158,804 times
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Wow. I was just looking for opinions from people who perhaps knew something about real estate so I could pass opinions on to her. And I get accused of elder abuse? Just wow.

A lot of very odd and insulting assumptions here.
She doesn't have concerns. She has a plan, as well as all her faculties.
I absolutely have money beyond my next paycheck -- where that came from I have no idea.

No one ever just tried to help someone gather information to help them? She's not that internet-savvy. Oh well.
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Old 06-28-2018, 03:50 PM
 
3,317 posts, read 7,251,326 times
Reputation: 4095
Quote:
Originally Posted by Murk View Post
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? This is tough to answer because we don't know what monthly debt is on her credit report and how much income she will have post-retirement. I'm not a fan of putting the entire nest-egg into a house and not having access to it, especially at an age when $$ will be needed for health care, etc.

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. Depends how far the new house is from the current job, and what her HR department would say on the Verification form (if they might mention her pending retirement.)

Am I wrong? Any recommendations?
If she puts a big chunk down on a new mortgage, have her look into a Reverse mortgage as it will eliminate a monthly payment and keep her cashflow available for other needs.
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Old 06-28-2018, 07:34 PM
 
9,258 posts, read 7,284,180 times
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Clear up your credit, have your mother loan you the down payment (with papers), and you buy the house and pay the mortgage.

This will protect your mother's retirement funds.
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Old 06-28-2018, 09:31 PM
 
Location: on the wind
4,105 posts, read 1,535,580 times
Reputation: 14669
Quote:
Originally Posted by MrRational View Post
MOM should visit an attorney who specializes in elder law matters.
Some objective 3rd party to hash out her concerns and ideas and who can help with the legalities.


She should do this VERY soon and do so **without** your "help"...
and before she makes any changes in her legal work status...
and absolutely before she even considers making any other financial decisions or changes.
Yes. The advice she gets will probably benefit her in more ways than the real estate decision.
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Old 06-28-2018, 09:40 PM
 
Location: on the wind
4,105 posts, read 1,535,580 times
Reputation: 14669
Quote:
Originally Posted by Murk View Post
Wow. I was just looking for opinions from people who perhaps knew something about real estate so I could pass opinions on to her. And I get accused of elder abuse? Just wow.

A lot of very odd and insulting assumptions here.
She doesn't have concerns. She has a plan, as well as all her faculties.
I absolutely have money beyond my next paycheck -- where that came from I have no idea.

No one ever just tried to help someone gather information to help them? She's not that internet-savvy. Oh well.
Hmm, not assumptions or accusations per se but they can't help but be possibilities. Don't you plan on living independently of your mother? Dealing with your own credit hurdles and making housing decisions for yourself? The life you've been living has been convenient for you, but could be increasingly less so for her. Another house purchase, modest at that seems to be, might not be in her best interest at all. Especially if it takes her savings to do it. No way. She may not be making hard decisions about herself because of concern for you. Is that still even fair? Time to think of her first, then yourself. An important side effect of doing this is that YOU will become the independent adult you should be. At her age, even with her good health and faculties all it takes is a fall, a bump on the head, an infection or simple illness to change all of your lives quite quickly.
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Old 06-28-2018, 10:13 PM
 
Location: California
4,445 posts, read 5,168,213 times
Reputation: 9180
Quote:
Originally Posted by Pfhtex View Post
If she puts a big chunk down on a new mortgage, have her look into a Reverse mortgage as it will eliminate a monthly payment and keep her cashflow available for other needs.
Although I don't like Reverse Mortgages, this might work for Mom by using her equity to support her. I also think a visit to an elder law attorney would be beneficial so she can have all the proper documents taken care of.

I left home when I was 17 yrs. old and haven't looked back so I just can't imagine how this would work. I missed a few meals in my younger days but learned to work two jobs so it didn't happen often.
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