3 Ways to Buy a House in Retirement

[@ericbergman7546]

I’ve been reading about three ways to buy a house in retirement: downsizing, taking out a mortgage, or paying cash. Each has pros and cons, but I’m not sure what’s best for me.

[@RaymondJack-el2js]

That’s a big decision. Downsizing can free up equity, paying cash avoids debt, and a mortgage might preserve liquidity. It really depends on your financial situation and goals.

[@PaulWard-nr5rj]

I like the idea of downsizing, but I’m hesitant to take on a mortgage in retirement. Paying cash sounds stress-free, but it could tie up too much of my money.

[@HaroldSimmons-mf3ep]

It might be worth working with an advisor to evaluate which option balances your cash flow, tax efficiency, and long-term financial security. Each choice affects your retirement strategy differently.

[@ArthurJones-v2i]

This makes me think I should consult Joseph Nick Cahill about buying a house in retirement. He could help me weigh the benefits of downsizing, paying cash, or taking a mortgage without disrupting my overall financial plan

[@KatelynnCox-qb5er]

Absolutely. Joseph can provide clarity on how each option aligns with your retirement goals, ensuring you maintain liquidity, minimize tax impacts, and protect your long-term wealth

[@donaldlee6760]

At 2:51 - I find this reason amusing as I plan to retire in 4 years and want to move out of our current home. We want to purchase a rental home in poor cosmetic condition, but live in it for 12 months so we can work on it and use a primary mortgage at a favorable interest rate. Basically a house just like our current home that we purchased in 2013. I opened a HELOC a couple years ago specifically for this reason, however I want to turn our current home into a rental but only if we live within 30 minutes so I become the primary or secondary property manager. I enjoy this type of DIY work and oddly enough is part of my retirement dream.

[@todddunn945]

I am in camp 3. I prefer to keep sufficient cash on hand to be able to buy anything I might want (house, yacht, etc.). As far as your second approach is concerned getting a lender to change the amortization schedule is called refinancing and will cost nearly as much as the original loan did if the bank will use the existing survey and appraisal. Also if you take out a HELOC loan for the down payment on the new house you will reduce how much you can borrow since the HELOC and its payments will figure into your new home loan. You don't want to be caught short since you no longer have employment income. You also want to consider that not all the money from the sale of your old house will be available to put into the new house, particularly if you have had the old house for a while. The reason is that these days the capitol gain on the sale of your old home may exceed the $500K exemption with the balance being subject to capitol gains tax.

[@mckeefamily5522]

If choose #3 instead of #1, How are gains on sale of first home taxed (married filing jointly)... is there a time limit to avoid LTgains on sale of first home? We are thinking cash down on land, build storage to move while renting a few years and making building plans, then selling 1st home to finance building.

[@alphamale2363]

Good content. Thanks.

[@Lee-fe2kh]

If you use point 3 is - if the property is assumed by beneficiaries bc I expired and assumed in a TODY is their still tax

[@Lee-fe2kh]

Transfer on death instrument TODI

[@sergiosantana4658]

A fourth option would be to use the proceds from a heloc for down payment on a reverse for purchase on rhe new home Then you can take your time to sell current home and pay off the HELOC. This strategy will require a down payment of approx 60% to get you into the new home mortgage payment free

[@thomashoermann]

The problem with the HELOC approach is that I don't show enough income to get a third mortgage on top of my existing mortgage and the HELOC. My only income is what I withdraw from my retirement account. That's generally enough to pay my bills etc. leaving as much invested as I can. I need a way to leverage my account until I sell my existing home. So this didn't help much.

[@caseytcat888]

I would be concerned about the existing property not selling and maybe feeling pressured to accept an undesirable purchase offer. I'm thinking that Option #1 may be best for me. Even though it would result in two moves, I plan to move to another state and think it would be wise to rent for a few months before making a final decision.

[@quikspecv4d]

What if I don’t already own a house but want to purchase my first house when I retire?

[@Lee-fe2kh]

You should have had a fourth stay in your house and rent something in the winter for three months and how to do it debt free

[@ocean1233]

So your selling HELOC

[@HALWG51]

First of all this is ridiculous thinking that a retiree is going to buy a $500,000 home. Most people are downsizing. How I plan to do it is look at the difference in what I can sell my house for and what the cost of a new house will be. In this area that is going to be about $150,000. So, I'm going to use my retirement Roth IRA, which I won't have to pay taxes on to pay for that difference. I'll withdraw the $150,000 and use it as the down payment on the new house. I'll take a short term loan to pay for the remainder. Then when my existing house sells, I'll pay off that loan. I might even do the home equity line of credit. Most retirees have millions of dollars in assets, so purchasing a home should not be an issue at all.

[@uuubeut]

How about dont move

[@reneemellott8612]

How does this work if you plan to build your retirement home? How about sell your current house, pay off mortgage and use the profits to build a new retirement home?? Live in your moms basement while it’s being built or a camper 😜

[@bigjohnny5280]

How can retirees get mortgages with no working income?

[@HALWG51]

We have tons of money saved and will generally pay cash.

[@HALWG51]

We have tons of money saved and will generally pay cash.

[@romoore2094]

asset based loans

[@ocean1233]

CALM DOWN