U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
View Poll Results: Mortgage or Investments
No mortgage pay 350k for house 30 54.55%
Mortgage with money in investments 25 45.45%
Voters: 55. You may not vote on this poll

Reply Start New Thread
 
Old Yesterday, 06:22 AM
 
Location: Loudon, TN
5,826 posts, read 4,868,767 times
Reputation: 19600

Advertisements

Quote:
Originally Posted by GeoffD View Post
You can get a $100k house in Fresno.
But then you'd have to live in Fresno....
Reply With Quote Quick reply to this message

 
Old Yesterday, 06:48 AM
 
Location: Loudon, TN
5,826 posts, read 4,868,767 times
Reputation: 19600
Quote:
Originally Posted by TuborgP View Post
And how many hit retirement with a real plan?
Well I hope a lot of us did. Not everyone's plan is as detailed as others, but most of us I think know what money we will be getting, and from what sources, and approximately what our expenses are. I don't calculate withdrawal rates annually, etc, as some do, because that's not how my cash flow works. But for others it might be very much a necessity. Others just make educated guesses and roll with the changes. Whatever works.

Me, personally, pre-retirement I made detailed budgets of expenses, both in my pre-move locale, and my post retirement move locale, after much research. I made graphs of spreadsheets to analyze our cash flows from various sources, and to adjust the withdrawal amounts, and the start and stop dates of those flows that could be adjusted (SS, and rental income) to obtain a basically level amount of income throughout our retirement, COL notwithstanding due to the majority of our income being COL adjusted anyway. To date, 9 years in, we are ahead of plan. We were able to delay starting SS for one of us by 3 years later than our plan due to the bull market, and that allowed that SS check to grow some. I'm still not eligible and haven't decided if we will delay mine or not. But we also took the idea of a big market drop into account, and made sure that our expenses and other income were such that we could take that temporary loss in stride and ride out a recession if we needed to.

So yes, some people plan, others say "what happened?"
Reply With Quote Quick reply to this message
 
Old Yesterday, 07:42 AM
 
19 posts, read 7,339 times
Reputation: 71
This is an interesting conversation. Not sure if my comment will be entirely relevant or not, but it does explain my lack of fear of mortgages.

We started out broke. I actually became a very successful hunter to put meat on the table (but I haven't hunted since 1991). As soon as I found a bank that would loan us money for a house ($30,000.00 @ 13.25%) I jumped on it. Eventually my income went up and interest rates went down and low and behold IRA's became a thing...and a tax break, so I refinanced the house for all they would give us and became an investor. Every time the interest rates fell enough to make sense to refinance, I refinanced and put some money back into the house, but all I could into the market for better or worse at times (boy did I take a bath on World-Com stock) but no matter, I kept investing.

That little house became the backbone of where we are today, and where I feel we're in position for a comfortable retirement...in fact it also allowed me to purchase my little piece of paradise on 13 isolated acres in the woods (that i still have a modest monthly payment on I might add).

I always considered that house a critical tool for building a portfolio, but I also knew that it's eventual value better be a minuscule portion of my real retirement plan. Even where we live now, i rarely even consider our home as part of my retirement plan until long term or when i cannot care for the property anymore. It will eventually sell for whatever the market says it is worth, or someone will pay for it, so why worry?

Anyway, DW and I gave our first little house to our daughter this year. She has put a great deal of time and $$ into it, and we didn't want her rent check anymore.

done rambling, thanks for reading.
Reply With Quote Quick reply to this message
 
Old Yesterday, 08:14 AM
 
Location: SoCal
13,397 posts, read 6,404,610 times
Reputation: 9980
Quote:
Originally Posted by GeoffD View Post
You can get a $100k house in Fresno.
I just checked on Redfin. Nothing in Fresno for $100k, thereís one for $115k, but itís a mobile home. The average home is about $300k.
Reply With Quote Quick reply to this message
 
Old Yesterday, 08:30 AM
 
Location: Washington State
18,711 posts, read 9,660,847 times
Reputation: 15950
Quote:
Originally Posted by Beach Sportsfan View Post
A question for many thinking in retirement soon. With interest loans going so low how many of you Would get a mortgage and let the balance in your investments as opposed to paying house completely.

Letís assume you have 350k to buy a house with no mortgage or take mortgage and let most of that money in investments

Option #1 Pay for house completely- no mortgage
Option #2. Carry a mortgage and invest the money

This is of course assuming you can carry mortgage payments with retirement income
Not enough information to make a recommendation. If you are comfortable with your retirement and investment income, then pay off the house. If you need more income, then take the loan and invest the $350K.

Currently, mortgage rates are very low and one can make a higher return than the interest rate so the general policy would be to invest and make more than the interest...you just have to be prepared to ride out the ups and downs of the market.
Reply With Quote Quick reply to this message
 
Old Yesterday, 08:53 AM
 
2,911 posts, read 1,025,804 times
Reputation: 3303
Quote:
Originally Posted by Tall Traveler View Post
Not enough information to make a recommendation. If you are comfortable with your retirement and investment income, then pay off the house. If you need more income, then take the loan and invest the $350K.

Currently, mortgage rates are very low and one can make a higher return than the interest rate so the general policy would be to invest and make more than the interest...you just have to be prepared to ride out the ups and downs of the market.
Yes and Thanks to everyone that has given their thoughts on this.

In my case I would have enough retirement income to both carry the mortgage or not so for me the question is really is where would I and partner feel more comfortable. Iím willing to get the mortgage and invest the extra cash. My partner likes everything paid off to the no mortgage is the way to go.

So who knows what we will do at 5his point.
Reply With Quote Quick reply to this message
 
Old Yesterday, 09:37 AM
 
10,285 posts, read 12,309,194 times
Reputation: 14238
I'd think to the past on this one:

Grandparents got to retirement with zero debt, paid for house and minimal expenses (no gym memberships/netflix/cell phones, cable tv etc). They would eat out once a week, grandma worked part time at a country club so they could be members there for free. She liked the social aspect of the job. Grandpa bought himself a new Cadillac Eldorado upon retirement and drove it for 20 years. Grandma was a Honda Accord fan, bought used and drove them for 10 years or until the rust took over.

I also consider an uncle that retired from Fortune 500 company and was essentially broke. No home equity, 401K was not 7 figures and once the monthly income dried up they were choking. Big house sold, pair of Mercedes Benzes downsized to a Corolla and a condo. Moved a couple years later to a smaller condo in a less desirable area. Guy overspent/undersaved and easily would be a guy that would say things like "got a 30 yr interest only mtg" and invested and got 7%. Sure.....7% and you paid tax on it and spent the rest but you still got 24 yrs left on that mtg and you still owe the whole thing!

Put me in the "no mortgage" category. Get pinched, you could sell the house at any time/any market, you could always rent it and move somewhere cheaper yourself. Heck you could even fall for a reverse mortgage with whatever actor is pitching them in the future. I'm also less likely to let greed sneak into my head and fall for the flashy sales pitch of the local broker guaranteeing 12% if I invest 500K today! Yes, Mr Madoff is taking only one new client this month and you have been selected.......
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:37 PM
 
14,024 posts, read 7,477,867 times
Reputation: 25679
Quote:
Originally Posted by NewbieHere View Post
I just checked on Redfin. Nothing in Fresno for $100k, thereís one for $115k, but itís a mobile home. The average home is about $300k.
It was a joke. And Iíd bet a $100k cash offer would land that delightful Fresno property. LOL
Reply With Quote Quick reply to this message
 
Old Yesterday, 03:41 PM
 
71,991 posts, read 72,020,102 times
Reputation: 49560
Quote:
Originally Posted by City Guy997S View Post
I'd think to the past on this one:

Grandparents got to retirement with zero debt, paid for house and minimal expenses (no gym memberships/netflix/cell phones, cable tv etc). They would eat out once a week, grandma worked part time at a country club so they could be members there for free. She liked the social aspect of the job. Grandpa bought himself a new Cadillac Eldorado upon retirement and drove it for 20 years. Grandma was a Honda Accord fan, bought used and drove them for 10 years or until the rust took over.

I also consider an uncle that retired from Fortune 500 company and was essentially broke. No home equity, 401K was not 7 figures and once the monthly income dried up they were choking. Big house sold, pair of Mercedes Benzes downsized to a Corolla and a condo. Moved a couple years later to a smaller condo in a less desirable area. Guy overspent/undersaved and easily would be a guy that would say things like "got a 30 yr interest only mtg" and invested and got 7%. Sure.....7% and you paid tax on it and spent the rest but you still got 24 yrs left on that mtg and you still owe the whole thing!

Put me in the "no mortgage" category. Get pinched, you could sell the house at any time/any market, you could always rent it and move somewhere cheaper yourself. Heck you could even fall for a reverse mortgage with whatever actor is pitching them in the future. I'm also less likely to let greed sneak into my head and fall for the flashy sales pitch of the local broker guaranteeing 12% if I invest 500K today! Yes, Mr Madoff is taking only one new client this month and you have been selected.......
It can be very hard selling a house in a 2008 style recession ...even if you found a buyer the banks were reneging at closing because they had no money ...don’t fall in to a false sense of security here .. you may need cash ,lots of liquid cash or instantly salable investments that can go with the push of a button if push comes to shove
Reply With Quote Quick reply to this message
 
Old Yesterday, 04:36 PM
 
14,024 posts, read 7,477,867 times
Reputation: 25679
Quote:
Originally Posted by mathjak107 View Post
It can be very hard selling a house in a 2008 style recession ...even if you found a buyer the banks were reneging at closing because they had no money ...donít fall in to a false sense of security here .. you may need cash ,lots of liquid cash or instantly salable investments that can go with the push of a button if push comes to shove
It kind of depends on your income sources and what percentage the house is of your net worth. The reason I moved at age 50 was to keep my home to net worth ratio and home ownership costs low. You call it moving to Cheapsville.

Someone with a big income stream from a pension or someone with lots of investable assets beyond their home isnít going to care about the liquidity of their house. Itís when you run out of money with no significant income stream where it would matter.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top