Question by Sheila B: Should a retirement home be paid for in full?
We are buying a home in an over 55 community but have not yet sold our 10 yr old, 5 BD home, so we’ll have a mortgage. Our large home should sell ok since we’re in NoVa, Fx County but I always thought you should have no mortgage when retired.
Best answer:
Answer by R J
You’re in a situation that used to call for a ‘bridge loan’. I don’t know if such an animal still exists, but check. If you are qualified to obtain a mortgage prior to the larger house selling, fine….you can payoff the new mortgage when the house sells. Just make sure the new mortgage loan has no prepayment penalty or you are comfortable with carrying it until the penalty period expires. Be sure to consider the costs of a new mortgage in your deliberations.
Also, you may wish to broach the subject of a short term lease/purchase or a simple rental with the 55+ home seller. This may be a easier/cleaner way to proceed. To directly answer your literal question….it depends. Mortgage-free retirement living is certainly not a bad thing, but personal circumstances/estate planning/tax avoidance issues can play a role. RJ
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