I am a single young (67) senior who recently sold a home that I knew would require significant near-term upkeep (new roof, new deck, new driveway) and was larger than I needed. I do not have children. I am in decent health. Is it more prudent to purchase with a 30 year conventional loan and know that I shall have a fixed payment for lodging, or should I rent and be concerned about what seems to be a trend of steadily increasing rental fees?
Terry Says: Gosh, that’s a tough decision. (And you forgot to include a third choice.) But first a comment on the choices you did list. Yes, rents might continue to rise. But whether you downsize to a condo or townhome, you are likely to face rising property taxes and expenses that also could be expensive. You do get a deduction for a mortgage interest — and yes, I would suggest locking in a 3year fixed rate mortgage if that is your ultimate decision.
BUT, have you considered other housing choices — such as living communities that could help you transition into assisted living? I mention this since you do not have children. And a number of women I know are now in this sort of situation. Several have told me they made a great decision to move into an active lifestyle community — but one that could provide them with help, if unexpectedly needed either for a temporary recovery period or for a change in circumstances. It’s tough to think about — yet they have said making this decision lifted a great worry from their mind allowing them to enjoy life more. Just something to think about!