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Yes, he did/does. We had to tap it for year when dh was laid off. Couldn't have come at a worse time with our daughter graduating from college, transitioning to job and housing. Now we've started it again and the more I think about it, the more interested I am in saving to buy a house. Since we've been renting for awhile we qualify for an FHA loan, 3% down. Lots of affordable properties in cheaper parts of New England.
Yes, he did/does. We had to tap it for year when dh was laid off. Couldn't have come at a worse time with our daughter graduating from college, transitioning to job and housing. Now we've started it again and the more I think about it, the more interested I am in saving to buy a house. Since we've been renting for awhile we qualify for an FHA loan, 3% down. Lots of affordable properties in cheaper parts of New England.
The cheaper areas also likely eligible for USDA rural development loans, which can be no money down at all and have more favorable terms, like being able to refinance out of PMI, than FHA doesn't have. You don't have to be truly in the boonies for a property to be eligible for them. A 3% or 5% conventional loan would also be preferable to FHA. FHA should be a loan of last resort.
I spent several days in Bangor, ME on my vacation last month, and really liked it. It has a good airport, Sam's Club, the typical big box retail, some great dining/bars downtown, a casino, gyms, medical, etc. I'm from the South, but if it wasn't for December-March, I could see myself living there. You're only about an hour from Bar Harbor and less to other parts of the coast. You cold easily get a home for $200,000, and property taxes seem to drop some outside town.
The cheaper areas also likely eligible for USDA rural development loans, which can be no money down at all and have more favorable terms, like being able to refinance out of PMI, than FHA doesn't have. You don't have to be truly in the boonies for a property to be eligible for them. A 3% or 5% conventional loan would also be preferable to FHA. FHA should be a loan of last resort.
I spent several days in Bangor, ME on my vacation last month, and really liked it. It has a good airport, Sam's Club, the typical big box retail, some great dining/bars downtown, a casino, gyms, medical, etc. I'm from the South, but if it wasn't for December-March, I could see myself living there. You're only about an hour from Bar Harbor and less to other parts of the coast. You cold easily get a home for $200,000, and property taxes seem to drop some outside town.
No money down means a higher house payment, thus less money per month to live on. It can be significantly higher. You can't have your cake and eat it too when it comes to this.
No money down means a higher house payment, thus less money per month to live on. It can be significantly higher. You can't have your cake and eat it too when it comes to this.
They have no money. That’s this whole thread is about.
I get it but it's a catch 22. They are worried about not having enough monthly income as well....just saying you can't have it both ways. Besides, either way they need to qualify for a home loan. The type of loan SC was talking about is so people without much income or money down can get a home in rural areas. High income people don't qualify and the OP would be considered high income. Not all areas qualify either. It depends on where you plan on buying a house.
I'm brand new here and trying to come to terms with what it's going to be like to be poor in retirement, especially since we are accustomed to a 6-figure income now. ...
Could you do live on about $3300/month, after housing costs? What would you do to get ready?
My monthly retirement income after taxes and my rent is about $1900, for one person. After a year and a half in retirement, I'm finally getting around to starting up my website development business -- because I don't really have much disposable income for things like vacations and emergencies. I have about a year's expenses in savings, but would like a bigger buffer.
How do you get ready? Change your expectations and tastes from those you have on a six figure income to something that will fit your new lifestyle. Do a budget for post-retirement and start transitioning to it now (I spent three years downsizing and learning to live within my retirement budget). Look at what you value in life and focus on that - understand the difference between needs and wants. Move to a location where your cost of living will be lower. Poor is a state of mind -- which means you need to stop defining your new lifestyle as being "poor".
I used to be able to go out and buy something like a new laptop or big screen television without batting an eyelash. Or buy designer clothing without having to budget for it. Or go out to fancy restaurants. Now, I have to consider the economic impact -- and maybe settle for a 42 inch TV instead of a 6 inch TV. I buy clothing on sale, and only when I need it. Needs versus wants. I also think through an expenditure: will I be happier after I've done this than I am now? If not, why am I doing it?
I have been considering buying a condo, since the cost of renting continues to go up around here. I went to a financial advisor who suggested I put off buying for a couple of years until I can increase my disposable income and savings - and see how the economy goes in that period. For right now, buying is not the best option for me.
Years ago, I worked at a research organization and was talking to my boss about lifestyles. She noted that when she and her husband were graduate students, they had a beat up car and would spend weekends camping. Their new lifestyle included a sailing vessel on the coast, and a high-end luxury car. She commented that their toys were different, but she couldn't say their level of enjoyment of life was any less than when they were living as "poor" students. That realization is the beginning of wisdom.
"… What about the main thing in life, all its riddles? If you want, I'll spell it out for you right now. Do not pursue what is illusionary -property and position: all that is gained at the expense of your nerves decade after decade, and is confiscated in one fell night. Live with a steady superiority over life -don't be afraid of misfortune, and do not yearn for happiness; it is, after all, all the same: the bitter doesn't last forever, and the sweet never fills the cup to overflowing. It is enough if you don't freeze in the cold and if thirst and hunger don't claw at your insides. If your back isn't broken, if your feet can walk, if both arms can bend, if both eyes can see, if both ears hear, then whom should you envy? And why? Our envy of others devours us most of all. Rub your eyes and purify your heart -and prize above all else in the world those who love you and who wish you well..."
No money down means a higher house payment, thus less money per month to live on. It can be significantly higher. You can't have your cake and eat it too when it comes to this.
A mortgage with PMI in a lower housing cost part of New England is still going to be much cheaper than whatever their metro Boston rent inflates to by that time.
As long as their credit is decent and they can come up with closing costs, they'd probably be much better off owning in a lower cost area than renting where they are when they can finally bail out.
Quote:
Originally Posted by marino760
I get it but it's a catch 22. They are worried about not having enough monthly income as well....just saying you can't have it both ways. Besides, either way they need to qualify for a home loan. The type of loan SC was talking about is so people without much income or money down can get a home in rural areas. High income people don't qualify and the OP would be considered high income. Not all areas qualify either. It depends on where you plan on buying a house.
There are different types of USDA loans for different situations. There is one that is for very low income. Another type is for moderate income people, but in reality has a much broader appeal. The income limit in my county for a 1-4 person household is $82,000. That's basically twice median HHI. A single guy making $80k would probably be top 5% in single income earners here, but would technically meet the income requirements.
We're talking about whatever their retirement income will be, which is going to be much less than whatever they currently make.
Last edited by Serious Conversation; 07-02-2019 at 07:53 AM..
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