What do you all think we should we do? (foreclosure, banks, fixed rate)
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.
Being that my wife and I are 72 years old which way makes more sense; take a mortgage for 15 or 30 years?
Either case our kids are going to sell the house when we pass.
I think that the biggest unanswered question is WHY are you asking the question? What is your financial situation? Do you already own the home (which is what I would guess due to the way you phrased your question)?
If you already own the home, then again, WHY are you thinking of taking out a mortgage? Do you have a huge amount of debt right now that needs to be paid off, or is it that you just need a little more income each month in order to pay your bills?
If you already own and find yourself needing just a bit more money each month, I would suggest that you look into getting a Home Equity Line of Credit (HELOC) on your existing home. That way, you can withdraw/borrow a few hundred dollars (or whatever you need) each month and only have to pay interest on the outstanding amount that you owe.
If you take out a mortgage for $100K or $200K or whatever, then you have to start paying interest on the entire amount from day one even though you may need only a small portion of that loan at the present time. To me, it makes more sense to pay interest only on what you've actually spent of the loan proceeds rather than on the entire amount.
Getting a large mortgage loan when you need only a small amount of it means that you then are faced with the problem of what to do with the remaining unspent funds to try to return some income to help you meet the mortgage payments. It's unlikely you'll be able to find a SAFE investment that is going to return more than the payments on the amount borrowed, so you'll be losing money every month making up the difference between what your payments are and what your income is from your investment.
A HELOC is a much better choice, IMO. Get the HELOC approved for the max amount that you can, but then only withdraw what you really need each month. Your payments will be much smaller that way for a long time. If used wisely, the HELOC funds could last you 10 years or longer without requiring that you actually take money out of your other income to make payments with.
Once you've spent all the HELOC funds (hopefully many years from now), you can then take out a conventional loan to pay off the HELOC loan. That way, you won't have to make payments on ALL that amount until many years from now. That's far better than making those full payments from day one.
BTW, I wouldn't worry for a minute about my kids having to sell the property. If they price it right, it will sell regardless when or where it is.
My best friend just went through a year and a half of aggrevation selling his parents condo in Florida after they passed. First, he had to fix it up since it was not being kept up due to their failing health, and then he had to sell it in a soft market where it was at.
All of this time, he was still working a highly demanding job, so this was a real drain on him.
Every phone conversation we had during this time was dominated by his efforts to unload that property.
.
If I had been in that situation, I would have cut to price to the bone to get the thing sold fast. Even if you only net $5,000, that’s $5,000 more than you had originally.
Being that my wife and I are 72 years old which way makes more sense; take a mortgage for 15 or 30 years?
Either case our kids are going to sell the house when we pass.
30 years, unless you have way more liquid funds than you will ever need.
You could go with a 30-year mortgage (with no pre-payment penalty) and then make an extra 'principle' payment each year. This will give you a similar result as a 15-year mortgage.
Otherwise, the payment difference on a 15 versus 30-year mortgage is often surprisingly close and will significantly reduce your overall interest paid (and increase your short-term equity).
Whether you outlive your mortgage term or whether your kids keep/sell the property after you are gone - or whether you live long enough to pay off your mortgage is not particularly relevant to the 15 vs 30 issue (unless, of course, the monthly mortgage payment addition has a significant impact on your lifestyle).
Why are you asking a group of strangers for life financial advice?
Quote:
Originally Posted by cfbs2691
this
Quote:
Originally Posted by Screenwriter70
Why are you asking strangers on the internet? That's something between your wife and you. I don't get people on CD always asking what city/state or even country they should move to. It's entirely the decision of the individual/couple or family.
Because......one of the strangers on this forum could offer some information the OP and his wife don't know about or haven't thought of......that is one of the main purposes of this forum......to share information.
Personally the only advice I have is don't make this decision with your children in mind. You are 72 and could easily live in your next home for nearly 20 years, make a decision that will make those years happy ones for you and your wife.
Do a 30 yr and add to the pmt. Gives you flexibility if you need it. If possible put 20 percent dn.
Ideally, don't buy a condo. Harder to sell.
Try to buy something somewhat updated in a good area. Ideally, buy the smallest, cheapest house in an area of more expensive homes. It will be easy to sell later.
Being that my wife and I are 72 years old which way makes more sense; take a mortgage for 15 or 30 years?
Either case our kids are going to sell the house when we pass.
Your age should not be a determining factor as to whether you get a 15-year or 30-year mortgage. Your decision should be based upon what makes the most sense for you financially. As long as you can easily pay the payment on the 15-year loan, not only will you be paying substantially less interest overall, but the interest rate should be lower, too. If the interest rate spread between a 15-year and 30-year mortgage isn't that great, then perhaps you could go with a 30-year mortgage since that would give you the most flexibility. Your monthly payment will be lower, but you'd always have the ability to pay more towards the principal if you chose to do so. Some people simply don't like having any debt, while others prefer carrying low-interest debt if they're able to get a higher interest rate on their investments. Of course, the choice is yours.
Being that my wife and I are 72 years old which way makes more sense; take a mortgage for 15 or 30 years?
Either case our kids are going to sell the house when we pass.
[Not joking:] I would find something that makes me wildly happy, find a lender to do a 40 year mortgage, do not impound property taxes and homeowners insurance, get my property taxes deferred so they are paid when the house sells, and if applicable, put as little down as possible, keeping as much cash on hand as possible, and have fun.
[Not joking:] I would find something that makes me wildly happy, find a lender to do a 40 year mortgage, do not impound property taxes and homeowners insurance, get my property taxes deferred so they are paid when the house sells, and if applicable, put as little down as possible, keeping as much cash on hand as possible, and have fun.
Do many lenders offer 40-year mortgages? What states do you know of that allow property taxes to be "deferred"?
[Not joking:] I would find something that makes me wildly happy, find a lender to do a 40 year mortgage, do not impound property taxes and homeowners insurance, get my property taxes deferred so they are paid when the house sells, and if applicable, put as little down as possible, keeping as much cash on hand as possible, and have fun.
Sweet, so the cost of that fun (not just in money but also time and aggravation) gets paid by the heirs.
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.
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.
