Update and your opinions...

[snafu]

Have you had any experience as a landlord? I suggest taking a course as it has potential to be fraught with problems. I hope you have the skill sets to carry out most of the repair/replacement yourself.

Retirement can be downright boring. Start planning activities to keep you busy. Do you have hobbies that can be used to earn income?

[mrpaseo]

Will you be putting down at least 20% on the new home? And what percentage of income will the payment be on the new mortgage?

I will be putting down 5% on a VA loan. The fee will be 1.5%. Payments will be approx 1,450 with Taxes/Insurance.

Income (Take home) will be:

$2,000 from wife (Also receives a quarters cash bonus but we do not count this in any of our calculations)
$1,750 from my Army Retirement
$700 from rental (After 300 deduction for home repairs/taxes/insurance)
$??? From my new job

Income: $4,450 month
Looks like approximately 32% which will go below 30% when I get a job.

I recently was per-approved for the amount needed for the loan under 4% but I will not close on the loan within 90 days so that will laps. My wife and my FICO is in the 800s so there will be no issues securing the loan, I just hope to be able to get it below 4% when the time comes.

Ray

[mrpaseo]

Much confusion, there was, in the original post.

My colleague "retired" last week after she was laid off; now she's looking for a new job. I hope you didn't jump the gun in the Army the way you just did for this thread.

Not sure what you mean by that but I don't think I am rushing to failure if that's what you mean. My original post made sense to me and a few follow up questions brought everyone on the same sheet of paper.

Like I said originally, yes I do not have a new job secured, but I am able to retire without working and will still be able to maintain our living. As it stands right now, we earn about $3,000 more than we spend in a month. The half pay cut will cause us to lose only a few hundred dollars off our monthly bills. The key to my situation is I have options.

Ray

[mrpaseo]

Have you had any experience as a landlord? I suggest taking a course as it has potential to be fraught with problems. I hope you have the skill sets to carry out most of the repair/replacement yourself.

Retirement can be downright boring. Start planning activities to keep you busy. Do you have hobbies that can be used to earn income?

I have none, well besides maintaining my own house and yes, I have some handy man experience. That said, I am not against taking a course (Didn't know there was such a thing, I'll look into it). We do have rental agencies that will maintain your house at a cost (Usually 10% of the rent). They will seek occupants and handle any maintenance issues that arise, but I am not leaving the area so I should be able to take care of this myself. More research is needed before it happens but I have about a year before I will be ready to rent.

I am looking now for stuff to occupy my time after I leave the Army, but I do not want to commit before I know where I will be working. I start the job search in January.

Thanks,
Ray

[disneysteve]

I will be putting down 5% on a VA loan.
Payments will be approx 1,450 with Taxes/Insurance.

Income: $4,450 month
Looks like approximately 32% which will go below 30% when I get a job.

I would vote no to this deal. 5% is an inadequate down payment and 32% is too high a portion of your income to go to your home. Keep saving until you have the 20% down payment and get a job so that your income is higher and you can keep the payment below 28% and preferably lower than that.

[MonkeyMama]

Agreed with Steve.

I am not such a stickler on the 32% for someone who is merely temporarily not working. But the combo of the two is dangerous. & I think at your age you should not commit so much to a house payment. I think it is one thing when you are 25, another when you are almost 40. Why? Because when you are 25 if you stretch a little, you will probably have a life time of raises and opportunities ahead of you. If you are gearing up for retirement, you probably will not have as much opportunity to grow your income down the road. (I know too many people who have been perpetually out of work since age 50. I suppose age discrimination in the work force is also another reason).

Anyway, what's the rush? If you are saving that much anyway and looking for a job, you may have 20% down in no time. Which is all the more reason to just take it a little slower. (If you are counting on record low interest rates to seal the deal - that is also a red flag. If you can't afford it otherwise? Forget about it. Rates will be low for a while. 5% is still absolutely awesome, in the grand scheme of things, and shouldn't make or break your plan).