When to buy a house: Before or After Retirement

We started saving for a new house over 20 years ago. At the beginning of our marriage the amount contributed was smaller. The amount grew as his income increased and our bills were paid off, including our house.

Our plan was to buy a house after he retired. The timing would allow us to put down a larger down payment, and we wanted a small loan to pay the house off quickly. That was a great idea until we learned the hassles of getting a mortgage without a salary.

There are many factors mortgage companies look at when you apply for a loan. One of the most frustrating is that your 401K or other accounts, including bank accounts, are not considered as part of your income. Only money received monthly is counted. You can have 2 million in savings but it is not taken into consideration.

Without a salary, qualifying for a loan is harder and they dig and ask questions until you want to scream. I owed Apple $300 for my laptop, they asked why I had the loan. Other questions were why I had credit cards without balances still open. The questions go on and on. The amount of paperwork required is extensive, probably the same for any loan.

We had the money to move while he was working, we had other plans. It was important for me to move to the new house first, update our house and then sale. We had the money to pay for the house outright. But when you’re getting 17% returns on your 401K, you take as little as possible out.

I highly recommend using a Buyers Agent when house hunting, they are so helpful during the closing process.

Food for thought.

Melinda