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You are encouraging that “average person” to take on possibly hundreds of thousands of dollars of DEBT in their elderly years? What happens in coming years when they need a new HVAC? Hot water heater? Roof? New carpet and flooring? Appliances give out? Insurance and property taxes rise each year?
It’s much easier to fund those costs of homeownership WITHOUT a mortgage, true?
They would have the $ for these things because they kept funds liquid instead of putting all of them into paying cash for the house.
Nothing wrong with debt in retirement under the right circumstances. It is all about debt, assets, and the ability to borrow $ at an attractive rate.
They would have the $ for these things because they kept funds liquid instead of putting all of them into paying cash for the house.
Nothing wrong with debt in retirement under the right circumstances. It is all about debt, assets, and the ability to borrow $ at an attractive rate.
Exactly right.
I want to enter retirement debt-free, but also recognize that debt is only one aspect of a solid financial plan.
I have seen elderly people whose CPA has told them a mortgage would be wiser than paying cash.
As far as replacing systems, making repairs or updates, the owner may well be much smarter to have leveraged the purchase to keep cash on hand, than to have blown the nest egg on purchase and be cash poor when it is time to do a roof.
It is all about income, assets, rates and terms, and desires.
I cannot imagine taking out a mortgage at age 60, let alone a 30-year loan. You are talking about a debt that would most likely outlive you. That would bring me no peace or security.
I won't have the money to buy with cash.
The ONLY reason I'm even considering buying house or condo is so I'll have a fixed monthly payment when I finally get to the point that I have to live on my Social Security/retirement funds. Renting is no longer viable if you are on a fixed income. Well, there were some cities I found where rents weren't escalating but they aren't cities I want to live in. They failed my basic check list (mainly, no transit system or a really poor one).
The ONLY reason I'm even considering buying house or condo is so I'll have a fixed monthly payment when I finally get to the point that I have to live on my Social Security/retirement funds. Renting is no longer viable if you are on a fixed income. Well, there were some cities I found where rents weren't escalating but they aren't cities I want to live in. They failed my basic check list (mainly, no transit system or a really poor one).
That fixed monthly payment is a contributing factor in the decision to buy at any age.
Good luck!
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