New mortgage at 45?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This place is full of financial fools.

Meaning what exactly since I'm assuming YOU are not one of us financial fools?

Meaning until a year or two ago interest rates were 2%. It's free money.

Lol, no, it's not free money. Even if you locked in a 3% mortgage and inflation averages 3% for the next 28 years, that just means your real, effective interest rate is 0%.

But you still owe every penny of the $800K principal you borrowed, and this must be paid back according to a rigid schedule whether or not you're sick, have lost your job, etc. And if you can't make those payments, the bank can take your house. Not my definition of free money.

While that's all true, if you take out a mortgage you could easily afford with retirement income, it's fine. Honestly, taking out a mortgage at 45 or even 55 or 65 is in someways easier to plan for because by then there is considerably more predictability in your life. Like at 45 I know with a decent amount of certainty what my monthly income from my pension and social security will be at 62. Whereas when I was 30, I truly had no idea what my income was going to be at 45. I had some guesses but couldn't tell you with any confidence.

I mean, I guess if you are 45 with no retirement savings and working an hourly job with no job security, I would stress about the burden of taking out a mortgage. But I'm guess that is not many people on this website. I don't even have close to the income or savings of a lot of people on here, but I'm in an extremely stable place financially at this point with good predictability. I also have life insurance for my kids, great health insurance so I am unlikely to be destroyed by an illness, and we have supplemental insurance in case of emergency, so I think even in the case of something catastrophic happening, we'd be bel to make our mortgage payments to avoid foreclosure (and could sell if we needed to).

[Anonymous]

Yes, we did. And with a 2.675% jumbo loan, half of the monthly payments paid by renters, we are in no rush to pay it off.

[Anonymous]

We did. Made sure we bought a sfh we could afford on one income (it's on the unfashionable side of MoCo) so we aren't worried. Will probably sell and move elsewhere for retirement before we pay it off.

I wouldn't recommend buying the very most expensive McMansion you can afford at 45, but something reasonable, sure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This place is full of financial fools.

Meaning what exactly since I'm assuming YOU are not one of us financial fools?

Meaning until a year or two ago interest rates were 2%. It's free money.

Lol, no, it's not free money. Even if you locked in a 3% mortgage and inflation averages 3% for the next 28 years, that just means your real, effective interest rate is 0%.

But you still owe every penny of the $800K principal you borrowed, and this must be paid back according to a rigid schedule whether or not you're sick, have lost your job, etc. And if you can't make those payments, the bank can take your house. Not my definition of free money.

Plus, if you borrowed $800K, you still owe that $800K even if home prices drop (as they inevitably will at some point when interest rates rise). So your house drops by $200K and then you lose $200K when you sell. These "mortgages are magical!" posters are so stupid.

Says the dude pissing his pants about 1 percentage point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

This is absolutely ridiculous. I live in NYC and there are plenty of extremely livable places for mortgages far less than $8-9k, unless you have like a dozen children and need an absurd number of bedrooms.

Apparently NYC has become cheaper in the last few years. Where I live, I need to include a 2% property tax plus high insurance costs. So, yes - there are no houses available for less than that in my area and the surrounding areas. And that’s for mediocre ranch houses.

[Anonymous]

What a bizarre question.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

This is absolutely ridiculous. I live in NYC and there are plenty of extremely livable places for mortgages far less than $8-9k, unless you have like a dozen children and need an absurd number of bedrooms.

Apparently NYC has become cheaper in the last few years. Where I live, I need to include a 2% property tax plus high insurance costs. So, yes - there are no houses available for less than that in my area and the surrounding areas. And that’s for mediocre ranch houses.

I believe it, if you don’t have more than 20% down. The 8% interest rate is brutal. I’ve been trying to move home to Santa Barbara but there’s nothing under $1.5 mil if you need more than 2 bedrooms.

Which is why I live here in dc where it’s “cheap”, lol.

[Anonymous]

Purchased our home at 58, refinanced at 65, 30 year @ 2.875%. Mortgage is the cost of housing.

[Anonymous]

Anonymous wrote:Yes, but we arguably overfunded retirement accounts, we have a lot of money committed to private investments that will most likely allow us to just payoff the mortgage in lump sums over the next 10 years, and 529 plans are fully funded. We had kids late, so we still need a family-size house for a while, but can always downsize when our youngest is the last one left at home.

This was a factor for us too. We moved and got a new mortgage when I was 47. We had an oopsie baby (turned out to be a blessing) when I was 45, so that set the clock back for how long we'd need a family-sized house in a good school district.

Something like a second home in a location I would want to retire to, absolutely do it in your 40's or 50's. By the time you retire in your 60's, it will be all or mostly paid off by the time you retire. Either way the mortgage will seem very affordable by then. Think about how low mortgages from 2003 seem now.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

No way. But we have college to pay for. So, if you have kids: no. If you don't have kids: maybe.

This is idiotic. Most people who have the means to pay for college don't cash-flow it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This place is full of financial fools.

Meaning what exactly since I'm assuming YOU are not one of us financial fools?

Meaning until a year or two ago interest rates were 2%. It's free money.

Lol, no, it's not free money. Even if you locked in a 3% mortgage and inflation averages 3% for the next 28 years, that just means your real, effective interest rate is 0%.

But you still owe every penny of the $800K principal you borrowed, and this must be paid back according to a rigid schedule whether or not you're sick, have lost your job, etc. And if you can't make those payments, the bank can take your house. Not my definition of free money.

Plus, if you borrowed $800K, you still owe that $800K even if home prices drop (as they inevitably will at some point when interest rates rise). So your house drops by $200K and then you lose $200K when you sell. These "mortgages are magical!" posters are so stupid.

Cool story. Now tell us what happens if you pay cash for the house.

In related news, you have no business giving financial advice to anyone.

[Anonymous]

A mortgage is not a time commitment; it's a means of financing real estate. The real question is: do you intend to be living in this same house in 15 or 30 years? If yes, that's a different set of questions. If no, who cares how old you are when you take out the mortgage?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

This is absolutely ridiculous. I live in NYC and there are plenty of extremely livable places for mortgages far less than $8-9k, unless you have like a dozen children and need an absurd number of bedrooms.

Apparently NYC has become cheaper in the last few years. Where I live, I need to include a 2% property tax plus high insurance costs. So, yes - there are no houses available for less than that in my area and the surrounding areas. And that’s for mediocre ranch houses.

No. New York and especially the surrounding metro areas are not cheaper. Everyone fled the City during the pandemic pushing housing prices up almost absurdly in the surrounding metro areas in the last few years.

[Anonymous]

Age isn't the restricting factor. Your income and ability to pay the mortgage either monthly payments or pay off the loan is the restricting factor.

We bought our current house with a $580K 30 year mortgage at ages 47 and 42. We refinanced it at ages 60 and 55 to a 15 year mortgage with a much lower rate (and the balance is about $380K because we took money out). So, we took 2 years off the final payment date. But we also have the finances to pay off the mortgage if we needed to. We don't want to liquidate the funds to do so, but if the loan were called, we could do so and it would lose money because we are making more on the money elsewhere than we are paying interest on the mortgage.

So, if you can make the monthly payment or pay off the loan, your age really doesn't matter. Different people retire at different ages and different people have other sources of income to support a mortgage.

[Anonymous]

Anonymous wrote:A mortgage is not a time commitment; it's a means of financing real estate. The real question is: do you intend to be living in this same house in 15 or 30 years? If yes, that's a different set of questions. If no, who cares how old you are when you take out the mortgage?

+1