I blame Magnum.
"Save your children the burden of paying taxes on their inheritance by spending it while you're still alive."
Posted on 08/05/2023 9:26:33 AM PDT by Drew68
I seem to recall something important happening in January, 2021. I think it might have a bearing on this situation, but I can't remember what it was.
I just mentioned this to my spouse a few hours ago. Not that we want to move, but our two story house is not exactly disability friendly and the yard has become overwhelming this year. We are in our mid sixties.
We could not afford a ranch house by selling our paid for home. Heck, we could not afford an empty two acre lot given the property values here. It is crazy. Mobile homes in a park are a major gamble if property changes hands and gets sold out from under mobile home owners.
So we will stay put. It would be easier if he was willing to hire to have things done.
Zero pity for those “trapped”.
Phrases like “you made your bed, now sleep in it” come to mind.
I relocated back to Texas after spending 30 years in California (another relocation early in my career). I knew I didn't want to retire in California and preferred to live my retirement in a more free state (like Texas), so I was able to secure a company-paid relocation back to Texas.
My California home had appreciated by 160% from when I bought it, and I rolled that equity into my new home, leaving some out to pay for furnishing the home (which was 40% larger than my old home and required all-new furniture).
I got a special relocation mortgage rate of 2% as a 5/15 ARM, 2% fixed for the first five years and then annually adjustable based on the LIBOR every year after that. Sure enough, when the fixed period expired my mortgage jumped by the maximum increase of 2% to 4%. That was at the end of 2019.
In early 2020 (just as COVID-19 was starting), I was able to get a loan modification (not a refinance) to convert my mortgage to a 10-year fixed at 2.625%. I knew back then that the rate was lower than the earnings of my retirement portfolio, so I kept the mortgage and kept the money invested.
I don't plan on selling my home. It's the right size for me, it's close to a major international airport, it's in "safe" affluent neighborhood with lots of amenities nearby, and my portfolio earnings have replaced my former income and then some without having to draw on the capital.
I don't feel "trapped."
-PJ
Wow, aren't you entitled ...
I blame Magnum.
"Save your children the burden of paying taxes on their inheritance by spending it while you're still alive."
Why am I entitled? All I’m saying is that there are worse things than being stuck in a low interest mortgage. Mine is %2.3. I plan on moving to Alaska at some point. Not right now though.
ROFL
We do not have kids, so that is another “problem”
Many Millennials and Gen-Z'ers believe they will never be able to own a home, and this doesn't mode well for conservatism.
People don't become conservative as they grow older. They become conservative when they start investing in the future by doing "adult" things like buying homes and starting families.
Unable to invest in their futures has contributed to the nihilism and despair that today's younger Americans are feeling and gives them the fuel to pursue more frivolous activities such as "fighting climate change."
A large realtor in my area said that they have 188 agents and 22 houses under their listing umbrella.
If they have money saved from a cheap mortgage, they can visit their grandchildren over the holidays and have plenty of spending money left over.
Used to be a lawyer Robert Bruss who talked about beng house rich & cash poor. He’s since passed away but he wrote a weekly column talking about the dangers of having your majority investment as your house. This was back in the 90s and reverse mortgages became popular.
I believe it's 24 of the last 60 months, doesn't have to be contiguous, and if you have multiple rental properties you want to unload, you can do this every 2 years. Summer/Beach rentals are way easier to do this with. Just hang on to the utility bills that you've been paying with the property address on them for proof.
Have they tried cutting the commission from 6% to 5.9%? Or is that against the rules of realtor club? (Rule 1: no discounts. Rule 2: NO DISCOUNTS!)
Were selling out of our low rate mortgage to pay cash for a house on our rural property which we own outright or we would be trapped also.
Isn’t the real problem the current high interest rates?
If they are 2/3 of the way into a 15 yr mortgage *and* are downsizing. Why would they need a mortgage at 66?
NOTE TO MR WOOD:
GET IMMEDIATE appointment with your CPA.
Under current Capital Gains on personal residences-—the first $500,000 of PROFIT is tax free to a couple that have lived in such home for 2 + years.
IF he wishes to downsize-—$500,000 will go a long way to dicker on the price of a replacement home. Same thing as having $500,000 tax free cash in your mattress.
Same rules apply to single persons, but only up to $250,000 .
Calculations are:
“Capital Gains Profit” AND
“Walk Away Money”.
Many people have NO idea this is available.
The sell take your profit and roll it into a cheaper and smaller property. Nonsense news article
They had a 2 year window to sell before it became INVESTMENT.
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