• Question
  • would it be wise to buy a home before i retire. The homes are selling from 210,000 to 300,000

    Asked by someone from Hollister, CA on 1/28/2013

    would it be wise to buy a home before i retire. The homes are selling from 210,000 to 300,000 something i can aford . i'm renting right now paying 1,800 a month.

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  • Categories: Retirement Assets and Savings, Downsizing/Relocation, Maximizing Returns, Housing

Answers

  • Editorial 

    Editorial 
    NewRetirement

    San Francisco, CA

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  • Yes. It does sound like it would be a good time for you to buy. In general, if you can own a home at a price similar to or less than what it costs you to rent, then buying is usually the best option. Debt is not usually a good idea for retirees. However, housing is a necessity and if you can buy a home that you are happy with then it is probably a better idea than renting.

    The monthly mortgage payment for a $3000,000 home will vary significantly based on your down payment, credit rating, employment status, amount of other debt you have, and the term of your mortgage.

    Here are some general estimates for a $300,000 home:
    -- Your monthly mortgage payment might be $2,013 a month if you were to put 10% ($30,000) down and secured a 20 year mortgage with an interest rate of 6.5 percent. The monthly payment would drop to $1,706.58 for a 30 year mortgage with the same down payment and rate.

    The benefits of home ownership can be significant when thinking about retirement. When you own your home, you are paying a lot in interest, but you are also saving money that could potentially be tapped at some point in the future.

    We wish you all the best!
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  • Login to rate this answer:   Answered on 1/28/2013
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  • Assuming you're at least 62 (you're planning retiring, so I'm making that assumption), you can purchase a home with a Reverse Mortgage, and won't have a monthly mortgage payment, or have to worry about qualifying with credit, assets, employment or income.

    With the 4.75% standard fixed interest rate program, the down payment for a 62 year old to purchase a $300,000.00 home is $122,781.00 (and that includes all fees). The down payment decreases as your age increases. For example, the down payment for an 82 year old would be $89,481.00

  • Login to rate this answer:   Answered on 1/31/2013
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  • Of course it’s wise to buy home before you retire. Since, it becomes a future asset that gives you good amount of money while selling in near future. Even you can earn good money monthly by placing it on rent. My father has recently bought a home in South Florida with the help of http://albanesebuilders.com/projects-for-sale.php . I think its price will get doubled in next few months and it will surely be a long term investment.

  • Login to rate this answer:   Answered on 12/18/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.