A SENIOR DECISION: RENT OR BUY?
by Mike Kirkland

Making financial decisions doesn’t get any easier, as we age. In fact, in some ways, the choices become more difficult because time is no longer on our side. If you get tripped up as a youngster, oh well, you have time to recoup. Not making the optimal choice as a senior can be downright devastating. To rent or to buy is a difficult choice at any point along the chronological trail. For a senior citizen, this situation can be brutal.

I have observed that two phenomena occur when we become more mature that’s an easy way of saying we get older. One is when we retire the cash flow diminishes. If we have not saved and invested diligently the results are discouraging. The second phenomenon is the time will come when we seniors want to get rid of “the old homestead”. It becomes too tall, too old and too big.

Let’s look at the first situation. Based upon statistics and numbers people tell us, no more than 20% of Baby Boomers are financially ready for retirement. Too many medical bills, lavish spending sprees, and so many other things got in the way. Now the “bell tolls for thee” as Hemingway wrote in his novel For Whom the Bell Tolls.

So, how can I, as a senior citizen, purchase a home with insufficient cash flow to qualify for a mortgage? It ain’t going to happen with a traditional mortgage. Lenders want to feel certain that I have the ability to pay the monthly mortgage payments or else they will not lend me the money to purchase a home.

Seniors know this and therefore they believe they cannot purchase that next home unless they have enough cash coming out of the sale of the “old homestead” to purchase for cash. That scenario doesn’t work very often. Consequently, they conclude they must rent.

What is the problem with renting? The short term answer is “You may live longer than your money”. This keeps seniors up at night. The only other dilemmas that take more priority for senior insomnia is “what happens if I lose my drivers license” and “am I going to get a deadly disease”?

To illustrate, let’s say you get $150,000 out of the sale of the old place. And let’s say you pay $1500 every month for rent thereafter. The math tells us you can pay rent for 100 months (8 years and three months). What happens if you live for 101 months? Or how about 150 months? I think you get the picture.

You know I would not bring this situation up if I did not have a solution.

CALL ME FOR A FREE CONSULTATION TO DETERMINE IF A REVERSE MORTGAGE MAY BE OPTIMAL FOR YOU, YOUR FAMILY OR FRIENDS

MIKE KIRKLAND
(909) 273-5556/(760) 407-6740

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