topic Re: Too Late for Me? in Mortgage Loans

Too Late for Me?

Anonymous — Thu, 02 Sep 2010 00:20:49 GMT

Is it ever "too late" to think about buying a house? The thought of a 30 year mortage at my age (60) is kind of weird, but so tired of throwing away money on rent - figure at least would be building equity in a house and have something to pass on to my children. Have looked at several loan options, 15 year - 10 year fixed at lower interest rate, etc. I have no intention of "retiring" any time in the near future - may cut back to part-time/contract work at some point. I am looking at a very reasonable price range that I would be able to handle regardless.

Have very stable job with long employment history with same company. Would have to pull down payment ouf of my 401K but due to my age can pull whatever I need without penalty - of course would have to pay taxes when withdrawn. As little as my 401K is earning, home equity would most probably surpass the earnings.

Thoughts? should i give up on my "American Dream"?

Re: Too Late for Me?

MattH — Thu, 02 Sep 2010 01:57:07 GMT

@Anonymous wrote:
Is it ever "too late" to think about buying a house? The thought of a 30 year mortage at my age (60) is kind of weird, but so tired of throwing away money on rent - figure at least would be building equity in a house and have something to pass on to my children. Have looked at several loan options, 15 year - 10 year fixed at lower interest rate, etc. I have no intention of "retiring" any time in the near future - may cut back to part-time/contract work at some point. I am looking at a very reasonable price range that I would be able to handle regardless.

Have very stable job with long employment history with same company. Would have to pull down payment ouf of my 401K but due to my age can pull whatever I need without penalty - of course would have to pay taxes when withdrawn. As little as my 401K is earning, home equity would most probably surpass the earnings.

Thoughts? should i give up on my "American Dream"?

My parents took out a mortgage to purchase their current residence when they were in their 70s, so if the purchase makes financial sense then you certainly can do it. As for the 30 years, well very few mortgages actually last 30 years even when the buyer is much younger because most people will move before then anyway and pay off the mortgage from the proceeds of the sale. Of course you should research your local housing market and so forth, but you'd need to do that whether your age was 30 or 60: those people I read about in the NY Times who cannot move out of Detroit because they are upside-down on the mortgages would be in trouble whatever their age. In most markets, though, I think somebody who buys right now is not nearly as likely to be upside-down as is somebody who bought at the peak of the bubble with less than 20% down.

The one downside I can think of is, owning a home does mean less flexibility if you need to move, but it sounds like your situation is reasonably stable.

As for the question of pulling money out of your 401K, you might want to discuss that aspect with a financial planner.

Re: Too Late for Me?

DallasLoanGuy — Thu, 02 Sep 2010 16:19:42 GMT

The tax deduction might make it enticing.

Do you have a financial planner? Can you find suitable housing for the same as rent?

Re: Too Late for Me?

Anonymous — Thu, 02 Sep 2010 18:02:35 GMT

thanks for the responses!

do not have a financial planner - don't even know how to go about looking for one - are they extremely expensive? What do I look for?

and yes, the housing market here is awesome right now and can find some great deals at pretty much the same as the rent I am paying on an apartment - I can actually go a little over what I'm paying since I am now DEBT FREE (feels SO good) - but will stay within the allotted % recommended for housing since I want to put as much as possible in both savings and an individual IRA I just started last year. Plan on continuing my 401K to the matching - my employer matches 100% up to 6% so am taking all that free money for sure!

Re: Too Late for Me?

DallasLoanGuy — Thu, 02 Sep 2010 18:49:43 GMT

financial planners hold your money for you and make stock trades.... that is how they get compensated.

i think a mortgage is prudent for you.... especially since you can gat a mortgage payment ~equal to your rent.

the tax deduction is the bonus.