Buy in TV now or after I retire?

[kpd3062]

We had been planning to buy our home in TV after retiring. Someone recently told me recently that if I wait until after retirement my credit score and hence interest rate on my mortgage will be affected negatively, Even though I will have a pension coming in and money in the bank. I assume if this is correct some of y’all may have experience or knowledge of this. Thanks
Oh yeah, Merry Christmas to all!!

[Dond1959]

We had been planning to buy our home in TV after retiring. Someone recently told me recently that if I wait until after retirement my credit score and hence interest rate on my mortgage will be affected negatively, Even though I will have a pension coming in and money in the bank. I assume if this is correct some of y’all may have experience or knowledge of this. Thanks
Oh yeah, Merry Christmas to all!!

The person who told you your credit score will decline and interest rate will be higher is wrong. A second home will usually have a higher interest rate. It is a personal decision whether to buy now or after retiring. Many buy and rent out until they are ready to move to lock in price but it can be a hassle to manage from far away. Many things to consider but others on here can provide you their experience. Good luck.

[Two Bills]

I don't think there is any panic to buy until the Village of Miami is for sale!

[rjm1cc]

I would buy when you need the home.

HOWEVER

My understanding is that it is harder to get a mortgage the day after you retire than the day before. The reason is if you are employed they project that income even if you plan on retiring. After retiring it is much harder to justify the mortgage.

Thus I think they is a reason to get the mortgage lined up before you retire.

[eweissenbach]

I have bought three homes after retiring and gotten mortgages on all three at the best available rates. If you have good credit, ample income and savings you should be just fine after retirement. If you don’t you probably shouldn’t be buying a property.

[ckcapaul]

We bought 5 years before retiring and rented it seasonally until we retired

[JerryLBell]

Prior to retirement and buying here, we were close to having our mortgage paid off on our home. We figured we'd have the house paid off when we retired, sell the house and come here and buy. However, we also figured that would be stressful as we'd either have to buy a house here somehow before we got the money from the sales of our house or we'd have to store everything we owned and live in a hotel in the gap between selling there and buying here. We talked to our bank about it and they brought up the idea of a Home Equity Line Of Credit (HELOC). They loan you a fairly large percentage of the equity in your current home and you can use that money to A) pay off the mortgage on the existing home and B) buy or at least get a large down payment for a new home. The down payment didn't quite cover the cost of the new home we wanted here so we got a small mortgage to cover the balance. So we exchanged a mortgage payment for a HELOC payment and a small mortgage payment (for about the same monthly outgo). We then rented out the house here as a long-term, unfurnished house until we were ready to retire. With tax credits and such, we may even have made a few buck or at least didn't lose much each month and when the time was right for us to retire (and the long-term rental agreement was up), we moved here to the house we had wanted. In that mean time of roughly 18 months, the value of the house (according to Zillow) had gone up by 10% or more. We've been here 3 years and Zillow claims the house is worth about 30% more than what we bought it for. Judging from the sales prices of comparable houses, I think they're pretty accurate on that account. While the values were appreciating where we had lived, they weren't doing so nearly as quickly as they are here in The Villages. So if we'd waited, we'd maybe have gotten a bit more for our house but definitely would have paid more for a comparable house here.

In short, buying before we retired and moved here worked out quite nicely for us. Your mileage may vary.

[asianthree]

we Bought 7 years before one retired, and use as a vaca home. It was well worth it for us

[Toymeister]

No, retirement doesn't impact your credit score. However it will change your income, this in turn impacts your ability to pay a mortgage.

Here is the exact ratio for Fanie Mae mortgages: 36% of pre-tax income on all debt. No more than 33% on mortgage. The percentages used to be 28 and 31 total under pre Clinton underwriting rules.

Most banks use Fannie Mae standards in order to resell the mortgage, while some banks hold the mortgages and don't sell them, typically they use higher underwriting standards. The Developer controlled bank is one of those, they require 25% down not 20 and at higher rates, if yout throughly research rates. This was the case for my recent purchase. Others may have other experiences.

[mamahaffen]

We purchased 7 years before retirement. Rent out seasonally and enjoy the home a few times a year. Everyone has told us we did it the right way. With the houses appreciating, we agree. Some days are harder with 2 mortgages, but when we sell our home up north, the $$ will go to mortgage and we have our retirement home all ready. Worst case scenario, we sell our villages home and have made some $$

[ts12755]

When you retire and sell your home pay cash for your village home. You'll be too old for a new mortgage. 50% percent of men die within 3 years of retiring.

[Rzepecki]

We retired, sold our house up north, then bought in TV. Checked 3 banks and Citizens First had best rate, 3 5/8 over 20 years. Our credit rate wasn’t affected at all. At 3 5/8, it makes no sense to me not to have a mortgage when I can make more investing my money. The money is there if I need to pay it off.

[dewilson58]

we Bought 7 years before one retired, and use as a vaca home. It was well worth it for us




Us too.
I'm not buying into the comment "the second home will have a higher interest rate."




I think the key is, buy when you find the house you love, in the area you want.

[champion6]

When you retire and sell your home pay cash for your village home. You'll be too old for a new mortgage. 50% percent of men die within 3 years of retiring.In the United States of America? In the 21st Century? That's an incredible statement to pass off as fact! Please cite your source for this garbage.

[dewilson58]

In the United States of America? In the 21st Century? That's an incredible statement to pass off as fact! Please cite your source for this garbage.






sometimes you just have to let the BS flow off your ToTV back.

[dmarti1973]

We had been planning to buy our home in TV after retiring. Someone recently told me recently that if I wait until after retirement my credit score and hence interest rate on my mortgage will be affected negatively, Even though I will have a pension coming in and money in the bank. I assume if this is correct some of y’all may have experience or knowledge of this. Thanks
Oh yeah, Merry Christmas to all!!

I cannot comment on the credit score thing. I can tell you that the appreciation in home values most likely outweigh what you are earning on your savings. If you are not ready to move yet, you can always rent your home until you are ready to move. Lots of people cover the mortgage for the year while renting during peak season. Also check on the interest rate of the bond. I paid my bond off after learning the interest rate charged was 8%.

[idasr]

WOW! 50% die within 3 years after retiring. Is this true?

[Two Bills]

WOW! 50% die within 3 years after retiring. Is this true?

No!
Just checked after waking up again. :icon_wink:

[dewilson58]

An article:


Will 2020 be a good year to buy a home? Here’s what the experts say - MarketWatch (https://www.marketwatch.com/story/will-2020-be-a-good-time-to-buy-a-house-heres-what-the-experts-say-2019-12-18?siteid=rss&rss=1)




Just wait a day, there will be another article saying it will be bad.




Jus sharing.

[charmed59]

I don’t see the Villages running out of homes for sale in the near future. Though the price of preowned homes here does go up nicely, it may or may not go up faster than the area you are eventually selling. For instance, in Califorinia, or fast growing areas like Nashville or Charlotte, NC, the housing stock is rising faster than here.

On the other hand, new homes tend be about the same price with only a COL type increase. A whispering pines interior model bought new in Pine Hills cost about the same as a whispering pines model on a similar lot in bought new in Fenney. New homes here are a bit of a bargain. They figure if you are willing to be one of the first in a field of dirt and are happy to wait for the commercial infrastructure to catch up you deserve a discount. As the neighborhoods build out the prices go up a bit. Once the shopping center opens I’m betting all houses south of the turnpike will jump in price.

That said, by then they will be starting building on an entirely new area, and pioneer deals will again be available for new housing in brand new neighborhoods.

It will only be a problem getting a mortgage if your guaranteed retirement income (pension?) would not meet the income standards. For some lenders it may be harder to prove income if you are retiring on investment income, and don’t have few years of records of what that investment will produce.

[Two Bills]

Unless you are buying to rent as a further investment plan, I cannot see why someone retiring, would want a mortgage round their neck.
Surely you sell existing property and buy with proceeds?

[Toymeister]

When you retire and sell your home pay cash for your village home. You'll be too old for a new mortgage. 50% percent of men die within 3 years of retiring.

Facts are always good in a forum discussion.

Bottom line is the quoted post is woefully inaccurate.

Let's start with the 'average' retirement age. That is 59 and some change. What this poster means is the median retirement age. Median is half above half below. The 'average' is so low because of all the disability claims and those fifty year olds who can't get a job. You can verify this age from multiple sources on line. So, what is the life expectancy of a 62 year old having survived all the early death risk.

Let's ask the social security administration as they track death dates. A male who is 62 today has a life expectancy of 21.4 years.

Not three years.
Retirement & Survivors Benefits: Life Expectancy Calculator (https://www.ssa.gov/OACT/population/longevity.html)

[Eebnhab]

A couple of reasons we bought before retirement:
1) We wanted a pre-owned home in a specific area. Buying when we did allowed us shop for the right house and not have to take whatever was available when we sold our house.
2) With prices of pre-owned homes rising, we were very concerned about getting priced out of the home we wanted by retirement.

[mikeritz53]

Your score will not be affected. A second home usually carries the same Interest rate as your Owner Occupied. The difference comes into play as to qualifying for a Mortgage. Buy now and your Income as to be enough to qualify with all your Bills and the new Mortgage. Once retired in most cases your income is lower and that can make it difficult to qualify. Contact a Mortgage professional and have him do an analysis of your current situation and also where you will be once on a Pension to see what will work best.

[dewilson58]

Unless you are buying to rent as a further investment plan, I cannot see why someone retiring, would want a mortgage round their neck.
Surely you sell existing property and buy with proceeds?




Why??.................some people take on debt and invest their cash at high rates of return.

[rstebbins]

Hope market doesn’t go down while the funds are invested. Also the interest on the mortgage more than likely will not be deductible while the investment earnings will be taxed. Prefer to have the piece of mind not having any debt in retirement

[eweissenbach]

Unless you are buying to rent as a further investment plan, I cannot see why someone retiring, would want a mortgage round their neck.
Surely you sell existing property and buy with proceeds?

Well, then there are people like me. I prefer to carry a mortgage that I can comfortably afford at less than 4% and income tax deductible and leave my investments alone to earn considerably more. There are millions of stories in the Naked City.

[Gigi3000]

Us too.
I'm not buying into the comment "the second home will have a higher interest rate."




I think the key is, buy when you find the house you love, in the area you want.

It's TRUE that second homes have higher interest rate. They're easier.to walk away from, thus more risky for the lender.

[SacDQ]

I would buy when you need the home.

HOWEVER

My understanding is that it is harder to get a mortgage the day after you retire than the day before. The reason is if you are employed they project that income even if you plan on retiring. After retiring it is much harder to justify the mortgage.

Thus I think they is a reason to get the mortgage lined up before you retire.
I retired in 2018 and purchased my first home in the Villages in 2019 with no problems securing a mortgage at current rates for an owner occupied primary residence.

[CFrance]

Well, then there are people like me. I prefer to carry a mortgage that I can comfortably afford at less than 4% and income tax deductible and leave my investments alone to earn considerably more. There are millions of stories in the Naked City.
Our investment broker thinks like you.

[Two Bills]

Why??.................some people take on debt and invest their cash at high rates of return.

As I did when I was working, could survive the hits when market was down, and had income coming in to make up the shortfall.
When we retired our stock linked savings went into government tax free cash funds with lower, but guaranteed returns, no index linked falls, and rises inline with inflation.
Has worked well for us, and I do not have to keep watching market for trends and falls, which leaves us quite free to enjoy ourselves.
At present rate of funds depletion, we are good until we get to about 105 years old!
:)

[Larry P.]

I bought in April, 2017 and will retire in January, 2022. We have used the house as a furnished, short term rental property and have been lucky enough to have the renters pay for most of the mortgage payments while we wait to retire. We still come down two or three times a year when it isn't rented. I am using this time to make improvements to the house, we've replaced most of the appliances and added a lot of homey touches. I went this route figuring it would be easier to make major purchases while I was still working so hopefully there won't be any major expenses once January, 2022 rolls around. I have also not found it that difficult to manage a rental property from up north; there is plenty of information out there for any type of repair or maintenance that might be needed. All in all this has been a great experience for us and we enjoy the flexibility that short term rentals offers us. It also helps to have great neighbors that you can let us know if anything needs our attention. Best of luck!

[Chatbrat]

Unlike most, we never had a mortgage, I broke my butt--worked until I could pay cash for everything we bought--man makes plans & God laughs--retire yesterday, you can't square root life

[ColdNoMore]

Well, then there are people like me. I prefer to carry a mortgage that I can comfortably afford at less than 4% and income tax deductible and leave my investments alone to earn considerably more. There are millions of stories in the Naked City.

YEP! :thumbup:

[rrb48310]

It's TRUE that second homes have higher interest rate. They're easier.to walk away from, thus more risky for the lender.

:ohdear:
If your the type that walks away you’ve probably got some dents in your credit and pay higher interest rates to start.

We bought after retirement, had no problem getting a mortgage, at market rates. No discrimination, that includes age when getting a mortgage. Just credit, income and debt ratio.

I agree with earlier posts and decided not to cash out my investments (8% or more return) to save on paying a 4% mortgage.

We’re very happy where we are and got a great buy, that being said if I had to do it over I would shop prior to retirement in high demand areas and buy “the” property when and if it became available. Maybe that would help lower the “average Villager moves three times” saying.

[Chatbrat]

All I know, is I was informed by relatives with a lot more knowledge than I could ever hope to acquire--to buy Unilever when it was an over the counter stock--thanks to their advice-we're are truly fortunate to have 880K shares of UN , today--it has enabled us to lead a great life and retire early--I still ran my businesses, despite the fact, that I could have retired much earlier--this fact was ingrained into my head as a young lad--interest keeps some people poor while it makes others rich--avoid debt at all costs-- interest is not 100% deductible

[valuemkt]

When I worked for IBM there was a fable that the average retiree only collected X number of paychecks, and everyone knew at least ONE person that proved that point. Now that I am of that certain age, I know PLENTY of people that have been collecting checks for 10, 20 and more years ..
So I did what anyone can do .. an internet search, and came to a site called finders.com life insurance .. odds of dying, and here;s the odds of a 67 year old dying within X number of years - they give all ages, but since 67 is close to SS FRA (full retirement age) I list that below for brevity and hopefully closure on one persons perspective or opinion:
Odds of a 67 year old dying within
ONE YEAR - 1.83%
FIVE YEARS - 10.39%
10 YEARS - 24.43%
20 YEARS - 64.17%
30 YEARS - 95.99%

So While you may subscribe to the Eat and be Merry for tomorrow you may die mantra,

Hopefully you can do the above for many many more years ..

[Dlbonivich]

As a realtor here in The Villages I am aware of the increase in value over the last 5 years. The number is 25%. Inventories remain low and the demand is high. Maybe the person who told you your credit would go down had experienced the drop because they no longer had large revolving loans. Car payments and mortgages show credit worthiness. If you do not have those showing in the last year then your rate will probably drop.

[eweissenbach]

All I know, is I was informed by relatives with a lot more knowledge than I could ever hope to acquire--to buy Unilever when it was an over the counter stock--thanks to their advice-we're are truly fortunate to have 880K shares of UN , today--it has enabled us to lead a great life and retire early--I still ran my businesses, despite the fact, that I could have retired much earlier--this fact was ingrained into my head as a young lad--interest keeps some people poor while it makes others rich--avoid debt at all costs-- interest is not 100% deductible

A 4% mortgage in a 35% tax bracket is an effective rate of 2.6% net after federal income tax. I am a Chartered Financial Consultant and I am confident that over a five or ten year period I can comfortably beat that rate with my investments. It is called leverage. Everybody has to do what helps them sleep at night - there are many roads to success as well as failure.

[kpd3062]

When you retire and sell your home pay cash for your village home. You'll be too old for a new mortgage. 50% percent of men die within 3 years of retiring.

How long have you been retired?

[JLH1962]

880K shares of UN

50 million dollars. Yeah, that's a nice retirement. Good job!

[OrangeBlossomBaby]

50 million dollars. Yeah, that's a nice retirement. Good job!

Man - if I had even 1 of those million dollars we'd be able to live off the interest, and still pay taxes, and not have to worry about health insurance. The interest plus a very modest pension, plus social security for him coming in 14 months, plus social security coming for me in 2 years and 14 months...

Could even afford a new car to replace the clunky piece of tin I got in 2010. Or at least an arm rest. Can you believe they make cars that don't come with arm rests these days? Insane.

[Caterking]

I don't think there is any panic to buy until the Village of Miami is for sale!

Too late....we are coming!

[dewilson58]

It's TRUE that second homes have higher interest rate. They're easier.to walk away from, thus more risky for the lender.




You gots the wrong lender.

[Aloha1]

The person who told you your credit score will decline and interest rate will be higher is wrong. A second home will usually have a higher interest rate. It is a personal decision whether to buy now or after retiring. Many buy and rent out until they are ready to move to lock in price but it can be a hassle to manage from far away. Many things to consider but others on here can provide you their experience. Good luck.

There are some truths to what happens after you retire in terms of getting a mortgage. You no longer have a "paycheck" and that's the first key item mortgage companies look at. You could have $2 million in retirement money but to a bank, you have zero income. If you can swing it, buy now before you retire and rent it out until you do.

We did find Citizen's Mortgage to be competitive plus they "get" the fact that retired folks have capital.

[joldnol]

lock in prices now. We watched courtyard villas go from 150k to 220k between 2010 and 2014. We got priced out.

[Kilmacowen]

lock in prices now. We watched courtyard villas go from 150k to 220k between 2010 and 2014. We got priced out.

They put in a lot of upgrades to increase that much.

[Mamaderby]

We purchased a ‘cottage home” before we retired. Wanted to see if this place was for us. It was a wise decision because we learned what to look for and what to avoid. Plus we knew we could sell it at a profit down the road...which we did. Built a designer and then permanently made the move. Sold that five years later at a profit and bought a courtyard villa on the golf course and renovated it. Very pleased.

[bpascani]

I retired 2003, my husband 2017. We just moved to TV Jan 2019, and bought last month. Our credit score was not negatively affected, and we got a great interest rate, with an even better rate because my husband is a veteran. I have never heard of your credit score being affected due to age. It's all about debit to $$ in the bank, so, if you have enough in the bank, steady income of sorts, low debt, I would think you'd be fine. Perhaps talking to a CPA on that, or financial adviser would be a good idea. Best of luck.

[asianthree]

OPM (other people’s money) our investments make more than the interest rate on any of our homes in TV. At one time we had 3 homes in TV plus main home up north, and the lake cottage. Interest rate only is effected if you rent, then the average is 1 percent more.

[manaboutown]

I have not received a paycheck in 25 years as I retired from my profession when I was 52 years of age and have lived solely on investment income ever since. As far as I know this has not affected my credit rating, my ability to obtain a mortgage on a home or the interest rates I have had to pay on mortgages. Lenders of course do look at one's ability to make the payments and have enough left over to live on. They do want to see an income track record over at least a couple years to validate the reliability of the income stream.

As I understand it the interest rates offered by lenders and tax deductibility on both first and second homes are essentially the same.

A previous poster noted that the mortgagor of a house purchased to rent out must pay about one percent more in interest as it is classified as an investment property. By the way, if one buys a home under the pretense of owner occupancy and then rents it out the mortgage could be called for a breach of its conditions. The documents I signed on the last couple of mortgages I took out clearly state that the loan is ONLY for an owner occupied home.

[DAVES]

Unless you are buying to rent as a further investment plan, I cannot see why someone retiring, would want a mortgage round their neck.
Surely you sell existing property and buy with proceeds?

We sold off our previous home that we had paid off. As to why anyone would take a mortgage. That is an economic decision.
Some people feel better without a mortgage but, the other choice is interesting and perhaps for some, for me a better alternative.
Mortgage money is still the cheapest source of money available to you. Our mortgage is 3.4% and I make 11% on my investments and have over the past ten years. Yes, there is risk. People do not realize it but, in a down turn, you investments will of course go down but so will the value of your home. We all know or knew that investments only go up, real estate only goes up-until it doesn't.

[DAVES]

We had been planning to buy our home in TV after retiring. Someone recently told me recently that if I wait until after retirement my credit score and hence interest rate on my mortgage will be affected negatively, Even though I will have a pension coming in and money in the bank. I assume if this is correct some of y’all may have experience or knowledge of this. Thanks
Oh yeah, Merry Christmas to all!!

As to your qualifying for a mortgage after you retire. First of all thanks to government regulation, some truly insane things are true. For example age discrimination is not allowed. A 90 year old can apply and get a 30 year mortgage.
As to your credit score, a bank can tell you. It is strange that people who do not owe any money will have a lower credit score then people who borrow and pay on time. To get a mortgage you cannot negotiate. They want to see xxxx coming in.
Government insanity? Our bank told us to get a letter from our brokerage declaring that we wish to get a check for several thousand sent to us every month. I was told by the brokerage that they get this often. They even sent me a form letter.
By the way, I was also told I could cancel the request as soon as my mortgage is approved. It is just a phone call to do this.

Some people are rushed with the prices are going up. Think, realize the same thing is true on the home you currently own.

[KRM0614]

They will sell to anyone with a pulse
Don’t buy south of Hwy 44 taxes webt up 25% it is much more expensive to live here than they disclose very expensive upkeep

Rent for 6 months check out every expense and weather etc before you make a mistake I’m here 6 months I’m going to sell - rather use my retirement for me to enjoy than a rich Morse family

[Chatbrat]

Get good stocks, if you don't need the income to live off of, reinvest the dividends--its amazing what the equivalent of compound interest with growth will do--then buy whatever floats your boat or perceived needs, while you can still enjoy life

We did all our traveling, cruising. etc-in the 70's & 80's--and now when we're in our 70's-just happy to kick back -and complain about the scenery-TV is a great place for security & fast emergency services

[Koapaka]

They will sell to anyone with a pulse
Don’t buy south of Hwy 44 taxes webt up 25% it is much more expensive to live here than they disclose very expensive upkeep

Rent for 6 months check out every expense and weather etc before you make a mistake I’m here 6 months I’m going to sell - rather use my retirement for me to enjoy than a rich Morse family

Sorry that things did not work out the way you had hoped with your move....that is something that making this decision to move from where we have lived the last 20 yrs a concern for us to consider. Can I ask, other than the tax increase, what were the issues that occurred in 6 months that makes you want to move now? I am truly trying only to glean info to consider making our move, NOT challenging your decision to at all. We have considered renting for several months, but all the rentals I look at have everything (mostly, except for electric and sometimes cable) paid by the owner vs the renter, so WHAT should we specifically be on the look out for that could help us? I truly appreciate your feedback. I KNOW it has to be a lot since moving at our age is NOT something to look forward to at all (much less twice so close together) so I guess I am looking for solid feedback vs those that just whine all the time and you look like a good source for solid, negative input to consider. Honestly, everything we see right now (were only there for a day, and will be back for a LSF in Feb) makes me want to move there REALLY badly. Any and ALL genuine issues to consider most appreciated.

[CFrance]

As to your qualifying for a mortgage after you retire. First of all thanks to government regulation, some truly insane things are true. For example age discrimination is not allowed. A 90 year old can apply and get a 30 year mortgage.
As to your credit score, a bank can tell you. It is strange that people who do not owe any money will have a lower credit score then people who borrow and pay on time. To get a mortgage you cannot negotiate. They want to see xxxx coming in.
Government insanity? Our bank told us to get a letter from our brokerage declaring that we wish to get a check for several thousand sent to us every month. I was told by the brokerage that they get this often. They even sent me a form letter.
By the way, I was also told I could cancel the request as soon as my mortgage is approved. It is just a phone call to do this.

Some people are rushed with the prices are going up. Think, realize the same thing is true on the home you currently own.
But... Our home in Michigan did not appreciate at nearly the percentage in 16 years that our first TV home did in 8, or our home in NJ, which appreciated 80% in three years in the '80s.

[Chatbrat]

In the 80's in NJ is when I made big $$ in real estate, buying the first home in projects I was involved in, renting rooms out to my employees & selling when the projects were finished--golden times

[kpd3062]

Thanks for all the great input on both sides. I'm leaning towards getting a mortgage and keeping our money invested.

[kpd3062]

As I did when I was working, could survive the hits when market was down, and had income coming in to make up the shortfall.
When we retired our stock linked savings went into government tax free cash funds with lower, but guaranteed returns, no index linked falls, and rises inline with inflation.
Has worked well for us, and I do not have to keep watching market for trends and falls, which leaves us quite free to enjoy ourselves.
At present rate of funds depletion, we are good until we get to about 105 years old!
:)

What is a Government tax free cash fund?