Community Chat

[gidgetgh]

It's always a matter of personal choice, personal comfort level and personal circumstances. 

For my husband and me, we are not interested in paying hundreds of dollars every month in interest with the lure of the mortgage interest tax deduction. 

Our personal comfort level is that it's better to not owe any money to a mortgage company (or credit card company).  I don't want to pay all that interest. And interest rates are starting to rise, or more than likely, will be soon. I'm not interested in paying someone 5% interest if I don't need to. 

Again, you have to do what makes sense for you but I'm not interested in taking on debt at this stage of the game. 

[truffle]

From what I've been told there are some Federal Govt employees with incredible retirement packages where they are making more money retiring than while working.  Under those circumstances heck ya I'd buy another house. 

[151949]

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@truffle wrote:

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@september wrote:

Mortgage interest is tax deductible, rates are still low (but starting to go up), and for many, the rate of return on investments is higher than what they pay on that interest.  

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Yes but one still has to come up with around $3000 each month to pay their loan (depending on where you live). Who cares about the tax deduction at that point.....not me! I want to be debt free when I retire. 

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As i previously stated - not all mortgages are 30 year fixed rate - there are many many types of mortgages. Also , not everyone mortgages the whole amount - esp. seniors often only mortgage as much as they need to step up into a nicer home than the one they are selling. For instance - we are looking to get out of a villa into a new stand alone house. We don't want to take the money from our investment account so we will mortgage about 15% of the  total cost of the home.We estimate our payment would be about $400 at the 4% interest our builders mortgage co is asking. We haven't even shopped around yet to see if there are better deals available.When you are putting down 85% they tend to give you a pretty good interest rate.

[itiswhatitis]

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@Karie2022 wrote:

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@KarenQVC wrote:

Thank you all for your responses.  I guess I'm really asking when people have the opportunity to get a small house that will not strain them during retirement, why do they add to stress by buying too much house?

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I often wonder this as well...we live in a suburban area with large homes, two of my neighbors, who never had children, and are in their 60's-70's have homes that are at least 4000sq ft...our school taxes are enormous....I often wonder why they would choose a high school tax district, a large home, in a child oriented neighborhood...any way, it's not my business, just curious...I know when our kids are grown and gone, we will be downsizing and moving to a less "high rent" area.

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@Karie2022, some people may be even keeping their grown children or grandchildren in mind when they mortgage in retirement.  

Then again, retirement doesn't always mean not working.  Many people get to retirement age and still find the need or want to still work outside of the home.

[KarenQVC]

@KathyPet  My reason for asking this question is that some posters have expressed worry about their budget and whether one of them could take over the house if one of a couple were to die.  I don't understand why they would take on stress just to get a bigger house.

PS:  I do understand investment reasons, which I included in my first post.

[Ibby114]

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@truffle wrote:

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@september wrote:

Mortgage interest is tax deductible, rates are still low (but starting to go up), and for many, the rate of return on investments is higher than what they pay on that interest.  

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Yes but one still has to come up with around $3000 each month to pay their loan (depending on where you live). Who cares about the tax deduction at that point.....not me! I want to be debt free when I retire. 

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There are mortgages- and then there are MORTGAGES! $3,000 a month? Getting a mortgage doesn't mean  living 'house poor' or keeping up with the Jones-  a $3,000/month  mortgage  pretty much  equates to that. 

One  advantage to not having a mortgage when downsizing....you can come in with a lower bid  and advise it's a cash offer. It's a huge negotiating tool when buying. When i sold a piece of property, a cash offer superseded any others. 

[KarenQVC]

@151949  I assumed you were doing it for the investment purposes, as you confirmed on this thread.  You obviously have assets to manipulate.

There have been some people I know and on this thread who have done it for reasons I don't understand.  Thus, the thread.

[esmeraldagooch]

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@151949 wrote:

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@truffle wrote:

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@september wrote:

Mortgage interest is tax deductible, rates are still low (but starting to go up), and for many, the rate of return on investments is higher than what they pay on that interest.  

---

Yes but one still has to come up with around $3000 each month to pay their loan (depending on where you live). Who cares about the tax deduction at that point.....not me! I want to be debt free when I retire. 

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As i previously stated - not all mortgages are 30 year fixed rate - there are many many types of mortgages. Also , not everyone mortgages the whole amount - esp. seniors often only mortgage as much as they need to step up into a nicer home than the one they are selling. For instance - we are looking to get out of a villa into a new stand alone house. We don't want to take the money from our investment account so we will mortgage about 15% of the  total cost of the home.We estimate our payment would be about $400 at the 4% interest our builders mortgage co is asking. We haven't even shopped around yet to see if there are better deals available.When you are putting down 85% they tend to give you a pretty good interest rate.

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I have never seen a mortgage company finance a home under $100,000.00 with a conventional loan does yours fit that criteria?

[itiswhatitis]

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@esmeraldagooch wrote:

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@151949 wrote:

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@truffle wrote:

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@september wrote:

Mortgage interest is tax deductible, rates are still low (but starting to go up), and for many, the rate of return on investments is higher than what they pay on that interest.  

---

Yes but one still has to come up with around $3000 each month to pay their loan (depending on where you live). Who cares about the tax deduction at that point.....not me! I want to be debt free when I retire. 

---

As i previously stated - not all mortgages are 30 year fixed rate - there are many many types of mortgages. Also , not everyone mortgages the whole amount - esp. seniors often only mortgage as much as they need to step up into a nicer home than the one they are selling. For instance - we are looking to get out of a villa into a new stand alone house. We don't want to take the money from our investment account so we will mortgage about 15% of the  total cost of the home.We estimate our payment would be about $400 at the 4% interest our builders mortgage co is asking. We haven't even shopped around yet to see if there are better deals available.When you are putting down 85% they tend to give you a pretty good interest rate.

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I have never seen a mortgage company finance a home under $100,000.00 with a conventional loan does yours fit that criteria?

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@esmeraldagooch it's difficult but it can be done.