In other words, the first question is, as it is with any loan: How much do you wish to borrow?
Finally, there’s the issue of mortality. Since one of my most cherished books is “The Denial of Death,” I may be the wrong advisor here. But should Ray Kurzweil be wrong in predicting that, we’ll have conquered death within 15 years, as he did here on Making Sen$e, and then you and I both have demise to consider. To me, mortality has no influence on the mortgage decision. I’m trying to maximize my assets as it is. That can only benefit my estate, should there be one, regardless of when the bucket is kicked; the farm, bought. But I suppose that if my wife and I were both to begin dining on dust in the near future, the americashpaydayloan.com/title-loans-ar thoughts about mortgage duration should apply (see above). In this case, I think I’ll go with Kurzweil.
As with any loan, the lender will want to know how much collateral is backing it up, don’t you suppose?
One last comment, Jim, it was only after re-reading your question and my answer that I got your drift (I think). And even so, it provides none of the key information one would need to provide a reasonable answer. So I’m preserving my original response, below. And if I’m now wrong and your question actually meant what I first thought it did, then I stand by what I originally wrote. In any case, it has a few funny lines that I’d hate to deny posterity.
A second rather obvious question: What is the loan for?
I hope you don’t mind my using you as a pretext for a rant, but even if you do, here goes. There is now an Internet, which contains some substantial fraction of all the knowledge humankind has spent millennia taking the trouble to amass. It behooves you and those your age – correct that, it obliges you – to take some infinitesimal smidgin of that trouble to learn the basics of personal finance. Its your future that’s at stake.
Okay, okay. I can hear you muttering, or perhaps even sputtering: “That’s what this guy Solman and Next Avenue are for.” And yes, we’re here to serve. But for goodness sake, prepare sufficiently before posing a question so that your query doesn’t drive those who would help you to deep despair. You’re 66 years old!
Think about your question for a moment. “Can I get a 30 year fixed rate mortgage?” For how much money? A million dollars? A buck seventy-five?
Are you borrowing to buy or refinance the 3-floor apartment atop Manhattan’s Trump Tower? Or for a tree house? In other words, how much the property is worth?
A third question, just as about as obvious as the first two: Equity, aka “ownership.” That is to say: How much of your own money do you currently have in the property? Or, if you’re buying it for the first time, how much of your own money are you putting up? I’ve seen a market estimate of $50 million on the 30,000 sq. foot, 3-floor Trump showpiece, with its “spiral golden staircase” and 16-foot ceilings (according to the Glam Valley website; I myself have never been invited).
If you apply to a lender for a million dollars to buy or refinance the Trump apartment (so that you can change its name to the Raymond Roost, say), and if you put up $49 million, and if you can get a legit appraisal of $50 million, you might be taken seriously. That’s because, were you to fall behind on your payments, the mortgage owner can foreclose, resell the property, and recoup the million-dollar loan. If, however, there’s already a $49-million first mortgage on the place, the lender is at risk. I ask you: would you lend me a million dollars in the those circumstances? Even though I am still working and earn more than $52,000 a year?
My first joint post on Next Avenue and Making Sen$e emphasized the importance of mastering the basics. We’re now making a concerted effort to do this on both sites with regard to retirement and Social Security benefits under the guidance of Boston University economist Larry Kotlikoff LINKS
But I had thought, when it comes to decisions about housing, that most PBS viewers would at least have understood fundamentals like those outlined above.
Rant over. What were the questions again? Oh yes: “Can a 66 year retired man with a retirement income (pension and social security) of $52, get a 30 year fixed rate mortgage? If yes, does it make financial sense to do this?”
To the second question, the answer is made up of two more questions: 1) What’s the interest rate? 2) What is the alternative course of action? No one can answer you until they know the answers to these.
Look, folks, I sympathize with the complexity of financial decision-making. That’s why there IS a Next Avenue, a Making Sen$e. But you all are going to be blindsided if you don’t school yourself in the fundamentals of personal finance. Or maybe you’ll just be robbed blind, and never even know it.
