I plan to retire soon and buy a new home. My current home and new home will have about the same value. Is it wiser to buy the new home with cash or take out a mortgage and invest the proceeds from the sale of current home??
Retiring and buying new home
February 12th, 2007 at 10:40 pm
February 12th, 2007 at 11:16 pm 1171322173
February 12th, 2007 at 11:24 pm 1171322663
February 12th, 2007 at 11:50 pm 1171324223
February 13th, 2007 at 02:29 am 1171333782
February 13th, 2007 at 03:30 pm 1171380642
If you're fully funded w/loads of moola in the retirement kitties and have LOADS of extra that isn't being used I'd say go cash.
If however, the money/investments/pension/SS you have is more on the minimal side I'd buy a very moderate sized home w/a long term mortgage (OPM - other people's money) & with a 20% down payment (avoid PMI) - and invest the proceeds from the sale of your current home to build up your retirement nest egg - increase income flowing stream.
We are facing a similar question as we approach retirement and since we haven't saved as much as would have been prudent then I'll probably be voting to go back into the mortgage game the closer we get. This said by someone who hates being in debt - however, if you can get a decent return on your investments AND a decent interest rate on the mortgage I believe you'll come out ahead financially by keeping the cash out of the house and in the market. Remember tho, I'm no financial advisor just a lady w/a fear of being hungry during retirement!
Good luck - let us know how it's going.