Ask Terry Questions Income Stream and Home mortgages

Income Stream and Home mortgages

By Terry Savage on September 16, 2019 | Housing / Real Estate

Terry, My wife and I both carry $80k ROP that return in ten years. We also carry term policies 500k on me and 1m on my wife as we have nothing to leave our son. (tax issues years ago – another story) I have an up and coming mineral rights ownership that is producing about $36k/year now from natural gas. With other wells coming on line and oil exploration in the area, prospects are high. We currently have cottage jobs and I collect SS disability (car wreck) that in total produces $18,500/mo. gross. We use all the normal tax right off and sole proprietor expenditures. We are in our mid sixties and now want to purchase a home, again. (tax issue from above) A) Should we sell the mineral rights (value 4 to 6 time annual income)or keep the monthly checks and B) who the hell is going to give us a loan?
Blissfully Unable to Retire!

Terry Says

This is a tough one.  I don’t know how valuable those mineral rights will be in the future, but it’s worth hanging on to them for the income they are providing.  It will be difficult to replace that stream of income.  But I understand your predicament. With only SS disability (and other “investment income”) you are not going to get a mortgage.

Ask yourself how important home ownership is at this age!  Maybe this is a “blessing” in that you have the flexibility to move as your circumstances change.  And they will.  You don’t have a long time to build equity, typically the reason for buying a home.  And you don’t need the mortgage deduction.

I think it’s time to look at this home-buying desire from another perspective.  It’s not a matter of “proving” that your finances have come back.  It’s a matter of looking forward.  And renting is not such a bad deal.



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