Affording a new home mortage in retirment?

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wilsonj434
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Affording a new home mortage in retirment?

Post by wilsonj434 »

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JoeRetire
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Re: Can I afford a new home mortage in retirment?

Post by JoeRetire »

wilsonj434 wrote: Sat Aug 06, 2022 5:25 pmTo me it seems a no brainier that they CAN afford this new house. However my dad has never cared about housing and wants to act like they cant afford it so he can just add to his car collection (hence all the money in cars while living in a double wide), but my mom is determined to finally get her dream house in retirement, so I'm trying to lay out 100% proof I can show my dad so that he cant ignore it anymore and keep pushing it off and help my mom get this house because she really deserves it like no on else I've ever known. They both worked hard their whole life. So is their anything I missed that I should also take into account?
Clearly this isn't a money issue. Selling the cars could have funded a home long ago.

You indicated that your dad has never cared about housing. You think that just showing numbers to your dad is really going to change that? Seems doubtful.
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PeninsulaPerson
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Re: Can I afford a new home mortage in retirment?

Post by PeninsulaPerson »

Possibly your post title should be about whether your folks can afford a new home in retirement?

Also - gently said - breaking your post into paragraphs might get you more responses as it would be easier to read.

It's good that your mother is a deserving person but getting in the middle of other people's marriages - yikes! Does your mother think you can convince your father of something she can't convince him of?

Plus what are they spending $4000 a month on? Maybe they actually are a little short on cash? How are the finances if one of them dies?
59Gibson
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Re: Can I afford a new home mortage in retirment?

Post by 59Gibson »

Why a new house build?? That magnifies an already tough high stress situation, maybe focus on an existing house. Btw it's not a "no brainer " they can afford it, considering the cars do not intend to be sold.
delamer
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Re: Can I afford a new home mortage in retirment?

Post by delamer »

It’s unlikely that both of your parents will live another 30 years to see a mortgage paid off.

So the key question is what happens to the survivor’s Social Security and other living expenses upon the death of the first spouse, in terms of affording their home.

A couple with each receiving $1,500/month in Social Security is in a significantly different position than one where one spouse gets $2,000 and the other receives $1,000, when rhe first spouse dies.

Does the $1500/month mortgage take into account increased property taxes, increased utilities and maintenance, and increased homeowners’ insurance?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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wilsonj434
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Re: Can I afford a new home mortage in retirment?

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wilsonj434
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Re: Can I afford a new home mortage in retirment?

Post by wilsonj434 »

delamer wrote: Sat Aug 06, 2022 8:34 pm It’s unlikely that both of your parents will live another 30 years to see a mortgage paid off.

So the key question is what happens to the survivor’s Social Security and other living expenses upon the death of the first spouse, in terms of affording their home.

A couple with each receiving $1,500/month in Social Security is in a significantly different position than one where one spouse gets $2,000 and the other receives $1,000, when rhe first spouse dies.

Does the $1500/month mortgage take into account increased property taxes, increased utilities and maintenance, and increased homeowners’ insurance?
dads is around 1800 and moms is around 1300. and no i didnt think of the increased property tax, increased utilities and maintenance, and increased homeowners’ insurance, but ill figure that up too thanks for the tip
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wilsonj434
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Re: Can I afford a new home mortage in retirment?

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Dottie57
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Re: Affording a new home mortage in retirment?

Post by Dottie57 »

Maybe dad needs to be told that his wife’s desire for a home is as or more important than owning a collection of cars.,,,

My mom’s best friend had a cheap husband who poo-pooed her desires for nicer things. He died of a heart attack. When mom askedher if she missed him the answer was - well he was a bit of company. That was it.
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Re: Affording a new home mortage in retirment?

Post by PeninsulaPerson »

wilsonj434 wrote: Sat Aug 06, 2022 5:25 pm
They also have around $250k invested in classic cars (examples: corvette, 67 F100, 1933 ford, and several others, stuff that should at minimum not depreciate and maintain its value. Basically the cars could be liquidated in elder age if they had health issues and didn't want to lose the house.

Are those genuinely financially valuable "classic cars" ... or just old cars that aren't that valuable? Where's your father storing these cars? How is he maintaining them to maintain their value? (Apparently it's the job of many people to maintain Jay Leno's classic and antique cars.)

Because ... just 'cause your father paid good money for old cars doesn't mean they're worth what he might have paid for them


Two things about the IRA/s - if your parents go from taking $12,000 a year to $42,000 a year ($3500 x 12), they are going to run through that $555,000 fast, considering that they're only 68 each! Also they will probably be at or above their RMD at $3500 a month. Not sure on that myself but others here may be able to confirm that for you. They may also have to pay taxes on the IRA withdrawals. Something else to check on.


Good luck to you, OP. It sounds like your parents have money problems, obstinacy and dreams. Tough combination!
delamer
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Re: Can I afford a new home mortage in retirment?

Post by delamer »

wilsonj434 wrote: Sat Aug 06, 2022 8:51 pm
delamer wrote: Sat Aug 06, 2022 8:34 pm It’s unlikely that both of your parents will live another 30 years to see a mortgage paid off.

So the key question is what happens to the survivor’s Social Security and other living expenses upon the death of the first spouse, in terms of affording their home.

A couple with each receiving $1,500/month in Social Security is in a significantly different position than one where one spouse gets $2,000 and the other receives $1,000, when rhe first spouse dies.

Does the $1500/month mortgage take into account increased property taxes, increased utilities and maintenance, and increased homeowners’ insurance?
dads is around 1800 and moms is around 1300. and no i didnt think of the increased property tax, increased utilities and maintenance, and increased homeowners’ insurance, but ill figure that up too thanks for the tip
Regarding their Social Security, when the first of the two dies, the survivor will be left with only the larger of the two benefits. It doesn’t matter which spouse lives, her/his total benefit will be $1800/month. (It stinks for a dual working couple with fairly comparable careers/earnings, but those are the rules.).

That’s a huge hit in income, and total expenses may not decrease as much as income does.

So it sounds as if the survivor might have a tough time affording the mortgage and other expenses of the new home under that scenario.

That said, if your mother is the survivor then presumably the car collection would be sold to beef up her finances. But that probably isn’t an argument you’d want to use with your father.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Affording a new home mortage in retirment?

Post by adamthesmythe »

At this time, it is not possible to predict how long it will take to build a house and how much it will cost. Adding a great deal of uncertainty to this endeavor.
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Re: Affording a new home mortage in retirment?

Post by likegarden »

When I retired with 62 1/2 years of age I was happy that I also had paid off my mortgage, and had no longer that financial commitment. In retirement I wanted financial peace.
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wilsonj434
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Re: Affording a new home mortage in retirment?

Post by wilsonj434 »

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the_wiki
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Re: Affording a new home mortage in retirment?

Post by the_wiki »

Do your parents actually want you to do this for them? It kind of comes across as pushy and controlling to me. I know I'd be a bit annoyed if my kids tried to tell me what I can afford or not and even tried going through my finances to make me a budget. Most parents don't like being parented by their kids.
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Re: Affording a new home mortage in retirment?

Post by galawdawg »

wilsonj434 wrote: Sat Aug 06, 2022 5:25 pm They own a double wide currently and also own the land its on. I suggested they sell the double wide that is worth at least $50k and have it hauled away and combine that cash with some cash in their savings of which they have about $30k total savings to put down at least 20% (roughly $60k down) on the mortgage.

They are looking to have a home built on site on the land they already own where their double wide is now.
FYI, in some jurisdictions the relocation of an older mobile home is impossible due to local zoning, permitting and code issues.

As far as affordability, doing what you are proposing could result in their losing the peace of financial freedom and moving into financial bondage at a stage in life where their options for increasing their income are limited or non-existent. Quite simply, they can't afford it.
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Re: Affording a new home mortage in retirment?

Post by Tracker968 »

I'm building a new custom home right now. Be prepared to go way over budget.
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Re: Affording a new home mortage in retirment?

Post by Golf maniac »

As someone who is close to your parents age I would not want my child to come in and try to take over my finances. Maybe your Dad knows best and they can’t afford it. My recommendation is to back off and allow your parents to handle their finances and decisions. If they ask for help it is one thing, but putting yourself in the middle of their finances is a bad idea that will only cause stress and hurt feelings in the long run. I understand you want a nice place for them but be careful, this can turn really bad really quick.
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wilsonj434
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Re: Affording a new home mortage in retirment?

Post by wilsonj434 »

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the_wiki
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Re: Affording a new home mortage in retirment?

Post by the_wiki »

Sounds like it is time for mom to stop asking and just get starting working up plans. It’s her money, too! :D

Maybe she can say, “I’m building a new house. Should I build it big enough for both of us?”
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wilsonj434
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Re: Affording a new home mortage in retirment?

Post by wilsonj434 »

the_wiki wrote: Mon Aug 08, 2022 10:40 pm Sounds like it is time for mom to stop asking and just get starting working up plans. It’s her money, too! :D

Maybe she can say, “I’m building a new house. Should I build it big enough for both of us?”
problem is she always lets herself get run over by dad, thats how in 50 years of marriage she is still in a double wide and dad has probably spent a million dollars on cars over the same 50 years if you include every car he ever owned and depreciation and car insurance for all of them and property tax and maintenance the list goes on, easily a million bucks its insane.
delamer
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Re: Affording a new home mortage in retirment?

Post by delamer »

wilsonj434 wrote: Mon Aug 08, 2022 11:01 pm
the_wiki wrote: Mon Aug 08, 2022 10:40 pm Sounds like it is time for mom to stop asking and just get starting working up plans. It’s her money, too! :D

Maybe she can say, “I’m building a new house. Should I build it big enough for both of us?”
problem is she always lets herself get run over by dad, thats how in 50 years of marriage she is still in a double wide and dad has probably spent a million dollars on cars over the same 50 years if you include every car he ever owned and depreciation and car insurance for all of them and property tax and maintenance the list goes on, easily a million bucks its insane.
As others have pointed out, this is a relationship issue not a financial one.

The numbers aren’t the problem; their dynamic is.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Affording a new home mortage in retirment?

Post by Mel Lindauer »

delamer wrote: Tue Aug 09, 2022 11:54 am
wilsonj434 wrote: Mon Aug 08, 2022 11:01 pm
the_wiki wrote: Mon Aug 08, 2022 10:40 pm Sounds like it is time for mom to stop asking and just get starting working up plans. It’s her money, too! :D

Maybe she can say, “I’m building a new house. Should I build it big enough for both of us?”
problem is she always lets herself get run over by dad, thats how in 50 years of marriage she is still in a double wide and dad has probably spent a million dollars on cars over the same 50 years if you include every car he ever owned and depreciation and car insurance for all of them and property tax and maintenance the list goes on, easily a million bucks its insane.
As others have pointed out, this is a relationship issue not a financial one.

The numbers aren’t the problem; their dynamic is.
That's exactly what I said before this thread was ever approved.
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