New mortgage at 45?
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Anonymous
| Would it be stupid to take on a new mortgage for 30 years at this age? I could afford it comfortably now but maybe not during retirement. However, income could go up over the next few years too… |
Anonymous
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What’s the alternative?
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Anonymous
Only reason it is stupid is because of interest rates  . If you're able to afford the payments long term including into retirement, fine. If you plan to sell the house at some point, fine. And if you are able to pay ahead to end the mortgage early...fine.
My 70+ year old parents have enough cash in the bank to pay off their house, but their 3 figure house payment (refinanced I dont want to know how many times since the mid-80s) is extremely doable. |
Anonymous
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We're planning to do one because we need to move for various reasons this spring, one being schools (two kids elementary school age). I'll be age 44. With current rates, no way we can do less than a 30-year mortgage.
However, I've heard/read that even if we could afford a 15-20 year mortgage, it's a better/safer option to do a 30-year mortgage and just pay extra on it. This way, you're safer if any financial catastrophe occurs, you aren't obligated to make the higher payments if unable. Figure we'll sell and downsize once we're retirement age and kids are out of the house. |
Anonymous
Rates are bad but I feel like sometime before retirement (15-20 years), they should come down enough to justify a refi. If not - I guess there’s not much I can do about it. |
Anonymous
There's no way to answer OP's question without an answer to this. Is it stupid to take out a new mortgage for a modest first house? Is it stupid to live in a paid off house and take out a $1.5m mortgage on a new place because you want something nicer? Very different answers. |
Anonymous
Not really. The financial impact of the mortgage is the same. |
Anonymous
| We’re going to take out a new mortgage at 50, but it will be paid off by 65. |
Anonymous
| I took out a 30 year at 55. So what. |
Anonymous
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Take out a 30Y and pay down extra principal every month (akin to a 20Y loan).
This gives you extra breathing room in case you ever need to pay the minimum due to job loss, a serious illness, etc. Plus you'll reduce your lifetime interest expense at these awful rates. |
Anonymous
Not really. If you don’t understand different situations different outcomes, I can’t help you there. |
Anonymous
| Depends on a lot of factors. However I would have a plan to be mortgage free by retirement age if not earlier. That could involve selling house and using the equity to buy something smaller outright. |
Anonymous
| I took out a 30 year at 54, DH was 60. We know the house will likely never be paid-off and we're okay with that. We have a super low interest rate, and a ton of equity already even though we purchased only 3 years ago. |
Anonymous
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No, not dumb. If you can comfortably afford payments now, you will build equity and can always sell before retirement if the finances don't work out to stay. As long as that idea doesn't upset you, no reason not to do it.
I say this as someone who is working hard to get out of the mortgage game altogether by 50. We have reasons for that (mostly related to college costs and health issues). But if you don't have those financial goals and financing a 30 year mortgage at 45 works within YOUR goals, there's no reason not to do it. Even the bank knows you are unlikely to work until the end of the mortgage. They also know you can sell. |
Anonymous
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I’m 42 and just took out a 30 year mortgage.
I wish I had been ready to buy when I was younger, and when interest rates were lower, and when prices in this area were lower, but I wasn’t. Oh well. |