New mortgage at 45?

[Anonymous]

Would you take out a new mortgage at the ripe old age of 45? Truth be told, none of us knows when our working days will be over - we could face age discrimination or ill health. Would you take the risk to buy a new home at that age or is it over for me? Income and down payment are available.

[Anonymous]

Sure, why not?

[Anonymous]

Anonymous wrote:Sure, why not?

I guess my concern would be that I’ll be laud off and don’t find another job at age 55 or whatever. By the same token I could be promoted.

[Anonymous]

I did but I did a 15 year. That almost doubles the payments, so it’s tight.

[Anonymous]

We’re getting a new mortgage at 50, but we will pay it off in 15 years or less.

[Anonymous]

Yes, but I would factor in my age and expected age of retirement because they will impact your finances.

The thing is, lots of people take out 30 year mortgages in their 30s. So the difference between that and taking out a 15 year mortgage in your 40s is negligible. But I'd want to be putting more money down in my 40s, which shouldn't be a problem because you should have both more savings and more income in your 40s so putting together a large down payment should be a lot easier in your 40s.

Ideally if I take out a mortgage in my 40s (which I very well may as we intend to move in the next few years and the proceeds from our current home are not going to be enough to pay cash for the home I want), I want to be putting down a very sizable down payment (like maybe even 50% or more if I can swing it) and I want my monthly payment to be pretty low.

Also, by your 40s you should be starting to be able to identify your expected age of retirement and also have some idea of what your your finances will be. For us, we're on target to retire by 62 and would currently have about 10k/month in income (if we needed it). So taking out a 15 year mortgage at 49 with a payment of 2k/mo doesn't seem like a big deal to me -- I'd be done paying it at 64 but it wouldn't delay retirement because our retirement income would more than cover it without things being tight at all.

[Anonymous]

just put like 60% down

[Anonymous]

We refinanced our 30-year mortgage at age 49 to get a better interest rate. Doesn't impact our plans to retire when we are both 57.

[Anonymous]

Anonymous wrote:just put like 60% down

This is why "getting on the property ladder" by your early 30s is a good idea. Even if you just buy a condo that doesn't appreciate much, if you get a 30 yr mortgage at 30, you'll have hundreds of thousands in equity by your 40s. And again, that's on a home that doesn't appreciate and where you're just making your payments.

50k down on a 400k condo or starter home at 30, turns into 200k in equity by 45 with no appreciation. And you're looking at a low monthly payment so you can keep saving, and could easily have another 100-200k in savings (in addition to retirement savings and investments, I'm talking about just a separate savings fund for future home purchase). So then you're looking at 300-400k for a down payment at 45. If you are lucky and the condo appreciates a bit, you might have closer to 500k. Even if you are buying something for a million, you should be able to do a 15 or 20 year mortgage with a sizable down payment and still be done or mostly done with your mortgage by retirement.

[Anonymous]

Anonymous wrote:Yes, but I would factor in my age and expected age of retirement because they will impact your finances.

The thing is, lots of people take out 30 year mortgages in their 30s. So the difference between that and taking out a 15 year mortgage in your 40s is negligible. But I'd want to be putting more money down in my 40s, which shouldn't be a problem because you should have both more savings and more income in your 40s so putting together a large down payment should be a lot easier in your 40s.

Ideally if I take out a mortgage in my 40s (which I very well may as we intend to move in the next few years and the proceeds from our current home are not going to be enough to pay cash for the home I want), I want to be putting down a very sizable down payment (like maybe even 50% or more if I can swing it) and I want my monthly payment to be pretty low.

Also, by your 40s you should be starting to be able to identify your expected age of retirement and also have some idea of what your your finances will be. For us, we're on target to retire by 62 and would currently have about 10k/month in income (if we needed it). So taking out a 15 year mortgage at 49 with a payment of 2k/mo doesn't seem like a big deal to me -- I'd be done paying it at 64 but it wouldn't delay retirement because our retirement income would more than cover it without things being tight at all.

There is no such thing as a $2000 mortgage where I live, unfortunately. There’s nothing under $8-9000 per month that’s livable (somewhat livable ranch house in a decent neighborhood). That’s what concerns me.

[Anonymous]

You folks are so spoiled with your low property prices in the DMV. You don’t even know how good you have it compared to NYC, SF or Miami.

[Anonymous]

Anonymous wrote:We refinanced our 30-year mortgage at age 49 to get a better interest rate. Doesn't impact our plans to retire when we are both 57.

Same here.

[Anonymous]

We did and paid it off in 15 years well before retirement.

[Anonymous]

Anonymous wrote:We did and paid it off in 15 years well before retirement.

I meant to add that we thought it would be our forever home but found that as life developed our plans changed and we plan to sell in a few years.

[Anonymous]

I took a 50% mortgage of $240k at age 60 — rate was <2.4% on a 15 year. It was on a condo with a $400 monthly HOA fee. After just a few years, it’s almost entirely principal, so it feels like I’m just paying myself and doing some forced saving.