Who Needs a Senior Breakfast When You Can Get a Mortgage?
The logic of 30-year mortgages used to be that you would borrow one when you were in your 30s and ready to settle down. By the time you pay it off, you are close to retirement age, and then you get to enjoy your retirement in your paid off home. Of course, present circumstances complicate that narrative. Home mortgage loans are out of reach for applicants under age 40, unless their parents are also homeowners, in which case they can borrow against their home equity to contribute to their children’s down payment, or else use their long credit history to co-sign on the loan. With young people increasingly unable to qualify for home mortgage loans, the demographics of homebuyers are skewing older and older. The conventional wisdom also used to say that, when people who had already reached retirement age bought real estate, they did it by selling their old house and using the proceeds to pay in full for the new one, but this is also not always the case. If you are in your 60s and considering a real estate purchase that will require a mortgage loan, contact a Bronx real estate attorney.
When Does It Make Sense to Borrow a Home Mortgage Loan After You Retire?
When you retire and no longer have employment income, it makes sense to want to be debt free, so you can use your fixed income on your everyday needs instead of on repaying old debts. Despite this, a mortgage loan can be good debt even if you are already retired. It makes sense to buy a house late in life if you want to stay there for the rest of your life and if your family members want to continue living there after you are gone.
A few simple calculations will show you why, in your golden years, a 15-year mortgage is preferable to a 30-year one. If you borrow a 30-year mortgage loan when you are 65, how old will you be when the loan matures? Don’t answer that. Instead, think of how you can afford the monthly payments on a 15-year mortgage, which are necessarily higher than the payments on a 30-year mortgage.
For example, the bigger your down payment, the lower your mortgage balance, so your payments could be affordable even on a 15-year term if you sell your old house before buying the new one and mortgaging it. Likewise, if you have multiple income streams in retirement, you are on firmer ground when it comes to keeping up with your mortgage payments, such as if you and your spouse both receive Social Security checks, and you also have a pension or an employer-provided retirement account.
Schedule a Confidential Consultation With a Bronx Real Estate Attorney
A real estate lawyer can help you if you are ready to buy real estate even though you are retired and will need a mortgage loan. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
msn.com/en-us/money/realestate/am-i-too-old-to-buy-a-house-suze-orman-s-take-on-buying-a-home-after-65/ar-AA1FVI2H?ocid=msedgntp&pc=ACTS&cvid=6b01dd08e7804ed6afe3cbc2412b5441&ei=18
