Many seniors trying to retire with a mortgage (financial advisor, move, friendly)

[TuborgP]

Coming right after you a reality check on the impact of home mortgages on retirement and oh well it is what it is. This is more focused on actually having a mortgage and not overall post retirement housing cost as another thread has wandered away from.

Many seniors trying to retire with a mortgage - LA Times

Nearly a third of homeowners 65 and older had a mortgage in 2011, up from 22% in 2001, according to an analysis from the Consumer Financial Protection Bureau, using the latest available data

The number of mortgage-holding households headed by someone 65 or older rose from 3.8 million in 2001 to 6.1 million a decade later, the consumer bureau said.

Rising debt levels also reflect a psychological shift among Americans, financial advisors and economists say.

"People who lived through the Great Depression came out of that period with a great aversion to debt," said Lori Trawinski, director of banking and finance with AARP's Public Policy Institute. "As a culture we have loosened our opinion of debt."

Wells, the housing counselor, said those he counsels often didn't budget for reduced retirement income when they refinanced to help their children, fix a car or take a vacation. They were working then, so the payments seemed reasonable.

"They are not really thinking long term at that point," he said.

Another part of the ever increasing difficulties many face as they head into their senior years.

[Hemlock140]

I don't see this as a problem for people that are sensible. My parents bought a home at ages 68 and 70, using the equity from their previous home as down payment and buying in an area where the home prices were about half where they moved from. Their payments have been significantly less than they would be paying to rent a similar (5 acre) property. When people retire they don't often stay in the same house, paid for or not, because they don't need to be in the expensive area close to work, and may not need the size they have been in when raising a family. If they are trying to make a $4,500 or even a $2,200 mortgage payment to stay in the same big house close to job centers, then they need to rethink it and find something they can afford.

[brava4]

I would imagine this is nothing new. I would think that over several decades many, many retired people had mortgages.

[Curmudgeon]

Originally Posted by brava4

I would imagine this is nothing new. I would think that over several decades many, many retired people had mortgages.

I agree. Decidedly nothing new or of interest here. Besides, this horse has remained dead.

[Clark Park]

My mortgage won't be paid off until I'm in my early 70's. Yes it would be nice to have it paid off, but I was in my early 40's when I bought the place. No, I cannot afford to make additional payments to pay it off early.

[mathjak107]

i believe more than half of seniors still have mortgages.

[StealthRabbit]

Mortgage payment has always been a very MINOR part of my housing costs. (and always covered by leveraged RE investments, since age 22. I prefer using the 2.5-4.5% CHEAP money I get from a mortgage for higher earning potential ESPECIALLY during 40+ yrs of retirement.) Except for the early 1980's... I didn't bother 'leveraging' 15%+ monies! My current taxes are 3x what my highest home mortgage ever was. I am used to farms and commercial lending, so a home mortgage is pretty trivial to the overall financial picture.

I keep enough bones stashed away to pay the pittance of a mortgage off on a moment's notice if necessary.

After dealing with more than my fill of commercial lenders... I will keep my Credit Union Mortgage and gladly avoid visiting my commercial lender every 5 yrs for a friendly 'up-charge!')

I'm Happily retired with a mortgage.

My mom was impressed that she just got a 30 yr refi at age 84. She immediately bought a few bargain homes and has since turned them into cash flowing rentals, or equity sold and BANKED (hard lending). (at 2x more than her 3.5% Mortgage).

Mortgage? it's just another tool in your bag. Some will use it as a tool, some will run from it. Tools have their purpose and their season. I haven't used my bulldozer for planting flowers (lately). But it makes quick work of creating a daylight basement when desired!

My first mortgage was $128.84, and I felt burdened for life! (I was making $1.65 / hr (a BIG raise from previous). A couple encounters with lenders while I was in my 20's and 30's convinced me they were out for more of me than my good. (Tho a necessary evil at certain levels).

YMMV

Enjoy being With or Without one...
and live happily ever after.

[Nor'Eastah]

Originally Posted by StealthRabbit

My current taxes are 3x what my highest home mortgage ever was.

I would think that this would be a more significant part of the problem. I know so many people paying $7-12,000 per year in property taxes. They needed homes in large cities or suburban areas surrounding them, from back when they were working or schooling their kids. These areas cost big $$$ in property taxes.

We'd all say, let them move away from the pricey urban/suburban areas, and downsize. Sometimes it's not so simple. If they are underwater on their mortgages -- a growing problem nowadays -- it may be many years before the homeowner(s) will be able to sell. Catch-22, by any other name...

[seeriously]

We haven't had a mortgage since 2005 but we considered it when we moved in 2011. At today's mortgage rates, it beats cashing in retirement funds. Our friends just built their dream house and took out a mortgage, it just made more sense than upsetting the apple cart. I think there's a trend these days among savvy senior buyers to use whatever cheap money is available and keep their investments in tact.

[RiverBird]

Originally Posted by mathjak107

i believe more than half of seniors still have mortgages.

It may be wiser financially in many cases to carry a mortgage.