If the only reason you are thinking of a bigger house is for visiting grandchildren, you might want to think again. You can have fun with your grandchildren in any house in TV.
A bigger house comes with bigger costs of a lot of things. Think about what works best for you and your day-to-day life in retirement.
If you have not already done so, you might want to sit down and look at a realistic budget that fits well into your pension and maintain as much savings as you can.
I know that buying a retirement house with cash seems like the ideal thing to do. But if that requires dipping into too much of your savings, maybe that is not as perfect as it sounds.
Try taking a look at what a comfortable house payment would be within your monthly pension amount and then you could dip into savings only enough for a down payment that would leave you with a highly manageable monthly cost. Grab a fixed rate without any pre-payment penalty for paying ahead or paying off. (I don’t think those penalties are around anymore, but be sure.) Factor in closing costs, etc. 15 years would be the best choice. Yes, you would be paying interest, with no write-off but equity would be building a whole lot faster. Only you and your wife can decide which home buying scenario makes you feel more financially secure.
I am going against the usual grain of paying cash if you can because I am not so sure taking such a huge chunk out of your savings is a good idea. A cushy savings might feel better, even if it means a house payment.
I know the tax law now has changed and I know the mortgage rates are up, but not like those of years ago, not even close.
Just run your numbers and talk with each other about what feels best. Do your homework. And, as you know, all this advice we are giving is worth exactly what you are paying for it. But, hey, it’s a start.
