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I recently paid off my mortgage early. I only had about 6 years left on it. My reasoning was just personal and not financially motivated in any way. I wanted to once in my life own my home free and clear. I'm checking that off my bucket list.
Is it still possible to retire with a mortgage? How?
As I recall, the mortgage broker gave us crap about being old and seeking such a large mortgage on this big beautiful house. That was right before we pointed out we had another home, fully paid-for, in Silicon Valley. And then it was, "Oh. Okay."
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Originally Posted by Serious Conversation
It's also just simpler too. If you're bringing in $3k-$4k a month, you have a lot more flexibility without that mortgage over your head.
What works even better for me.... Is having $2000 / month income from each mortgage I carry from selling my income properties. Just one of those easily covers my aged 3% mortgage + property taxes (which are far greater than any mortgage I've ever had.).
Retirement finances requires cash flows. Figure out where your's will come from. The evil witch CEO absconded with the pension and HC plan for 330,000 of us worker bees, so we had to devise another resource to replenish a significant cash flow loss. Very late in our careers. Many of us were out the door 10-15 yrs earlier than planned.
Have a plan for cash flows,
And a few alternatives.
Equity parked in a personal dwelling does nothing for your daily cash flows.
While our home has appreciated 10x in value, our taxes have increased 22x. Insurance, maint, improvements, ... It's all outflow. Our home is one of our worst performing assets.
Renting a home can be a lot more responsible way to manage your wealth and cash flows in retirement. Don't be "house rich and cash poor", especially during your active years or retirement. Getting a cheap 20 yr mortgage (<4%) at age 55 is probably the most efficient plan to utilize your equity and cash for travel, adventure, fun, pleasure, while able to enjoy those things. If you have oodles of accumulated wealth, you can park $500,000 into a non-performing asset.... Such as a personal home.
If you are an eager beaver, and want more income during retirement.... Flip your primary residence every 24 months for $250/$500k tax free gains. My mom did that 8x during retirement, using executive homes. It's a pretty sweet deal. Who needs a job if you can reap a few million dollars upgrading homes in your free time.?
We had our 1st home paid off in our late 30s. But once we hit 50-interest rates were low we decided to buy and have a mortgage. No regrets the rate is less then 4%.
Next year our daughter is buying our house. We are selling it to her for under market. Then not sure. We may rent or we may buy a small condo or cottage and have another mortgage. We want to travel so renting or a condo-where we can shut the door and go appeals to us. Here in WI they break up resort cottages into 'condos' where they do the maintenance. We have many options to explore.
My mortgage is 440 which includes property taxes and insurance. To rent a similar condo it would be 2k/month. Even adding my hoa fee of 419/ a month which includes all my utilities and maintenance it’s still much cheaper than renting. The key to condo living is to buy in a complex with well funded reserves.
Our two buildings have a boiler system that is water based for both heat and air conditioning so it’s really cheap to provide this for 150 condos. Also buy in a complex big enough to be able to split the costs among many people.
but cash flow could be far greater without the extra dough tied up in the house and instead invested elsewhere
at the end of the day. MEH
I've thought of it, and may end up renting again someday, at least temporarily, but right now, the mortgage/taxes/insurance payment on my 2BR 1 BA condo with an attic, a front porch, and a back patio/garden is $1377 a month. You of all people know I am NOT going to find an equivalent apartment that cheap in the NY/NJ metro area. At least not one that doesn't come with roaches, rats, and maybe bullets flying outside the front door!
My mortgage is 440 which includes property taxes and insurance. To rent a similar condo it would be 2k/month. Even adding my hoa fee of 419/ a month which includes all my utilities and maintenance it’s still much cheaper than renting. The key to condo living is to buy in a complex with well funded reserves.
Our two buildings have a boiler system that is water based for both heat and air conditioning so it’s really cheap to provide this for 150 condos. Also buy in a complex big enough to be able to split the costs among many people.
Wow, that's really inexpensive. Good for you. Your condo is in more of a high-rise type building, IIRC. Mine is in a townhouse complex. My HOA fee is $305, but does not include utilities. We do have good reserves.
MQ, because I have security issues from some past bad experiences I wanted to live in a secure building where you need to be buzzed in. It’s 3 stories and I am on the top floor. I have the best view as I face the courtyard with a long view and no one looks onto my balcony and I am away from the pool.
I recently had it enclosed with a wall of glass and I can open the windows for fresh air. I start and end every day reading there and it also increases my square footage. My view is mature trees, bushes and grass.
For those on a modest fixed income of SS and maybe some savings, I don't see how they can handle a mortgage along with regular monthly expenses. I really don't. I found health insurance to be the biggest kicker. And what are you going to do if you need a new car, a new roof, or have other major expenses such as dental work?
No kidding. I haven't had a mortgage since the 80s so was not used to it anyway. DH paid cash for his acreage, so never had a mortgage. The astronomical health care cost in the U.S. is one major reason we're down here. Ours is $80 a month for us both. Or we can pay a private physician of our choice for 1/10 the cost in the U.S. Property taxes are $60 for the year. No car either.
Dental work is always an unpleasant surprise, but at least it's way cheaper here. DH just had 2 root canals at $500 each. Fillings are $30. Endoscopy was $195.
So that's how we make it work. Can't even imagine a mortgage payment.
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