Buying Patio Villa Spring of 2012

[ugene]

My Question is should i pay cash for new villa, or say 50% down payment, i have got to remember that i will be adding on to a 1095.00 a month payment, no matter what i do. just some thoughts if you would please.

[thelegges]

With the low interest rate go with 20% down and pay extra on prinicpal every
month that leaves you with cash if you need it, thats what we have done and works well, and still leaves cash in bank for those unexpected expenses, but am confused about the thousand plus payment is that your currant mortgage or what you think you will pay out for new villa?

[coach]

As many posters have mentioned in other posts, no one answer fits everyone. But with that disclaimer I would recommend paying cash for the villa and not having a mortgage. I was unable to understand your comment of "adding this to an aready $1095 payment". What did you mean? Is that your estimate of fixed costs for living in TV?

My personal feeling is that in retirement a person should try to have the least amount of debt possible. It makes sleeping so much better and it allows you to enjoy this wonderful lifestyle on a very reasonable budget.

Hope this advice helps.

[Hal :-)]

I agree it's best to be debt free in retirement. But there's never been a better time for real estate loans. Prices are depressed and rates may never be this low again. If you have pre-tax funds (IRA) that you can fence off for mortgage payments, you could essentially withdraw it tax-free if you can deduct the payment which will be mostly interest. Also, after age 70.5, it's a convenient way to meet your RMD.

If your loan out lives you, your heirs can decide if they want to keep the property. If you're planning a short-term ownership, say 10 years, you may actually make a nice profit when you sell if the economy turns around by then (let's hope). In either case, you don't make a big dent in your nest egg up front.