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Royal Palm Beach, Florida
Peppered with lakes and traversed by canals, Royal Palm Beach (population 39,000) is about 15 miles inland from the Atlantic Ocean in southeastern Florida. It was just swampland until the 1950s.
Designated a Tree City by the Arbor Day Foundation, the village boasts 350 acres of leafy parks and green spaces. Boardwalks and trails wind through the 800-acre Royal Palm Beach Pines Natural Area and the 60,000-acre Corbett Wildlife Management Area, both rife with wildlife.
Locals enjoy community movie nights, art festivals, food truck events and a good selection of restaurants. The Village Cultural Center is home to art classes, theater performances and concerts. The Links at Madison Green, one of the state's best golf courses, is close at hand.
Neighborhoods are tidy, dotted with palm trees, fruit trees and flowering bushes. Many homes back to a canal. Palm Beach's white sand beaches are just 15 minutes to the east.
Cost of Living
Royal Palm Beach has an overall cost of living that is 2% below the national average.
The median household income is $74,700
Real Estate
The median home price is $370,450. This is a 14% increase over the previous year. For comparison, the national median home price is currently $380,000 (Realtor.com).
Estimates are that Royal Palm Beach real estate prices will increase by 3% over the next year.
The median rental price is $1,735 per month. Notes Royal Palm Beach's population has grown by 16% within the last decade.
The median age is 40. For comparison, the median age of the U.S. population is 38. Royal Palm Beach does not have a hospital, but Palms West Hospital is just three miles away in Loxahatchee.
The crime rate meets the national average.
Taxes
The combined sales tax is 7%.
Florida does not tax Social Security or any other retirememt income.
Florida's property tax homestead exemption reduces the assessed value of a home by $50,000, so a residence that is actually worth $100,000 is only taxed on $50,000. Residents age 65 and older who meet certain income limits may receive an extra homestead exemption of up to $50,000.
The average effective property tax rate (the annual tax payment as a percentage of median home value) in Royal Palm Beach is .106%. The annual taxes on a $370,450 home are approximately $3,927.
Mortgage Options for Retirees
Mortgage lenders can not by law discriminate against anyone who wants a home loan as long as he or she can meet the income requirements. These requirements can be met by using current Social Security income, other retirement income and investment account income.
There are also programs designed just for seniors to help them finance a home.
Freddie Mac
The Federal Home Loan Mortgage Corporation (Freddie Mac) makes it easier for home buyers to qualify for a mortgage if they have substantial assets but a limited income. There are some caveats, but generally lenders can consider IRAs, 401(k)s, lump sum retirement account distributions and proceeds from a business sale to qualify for a mortgage.
Fannie Mae
The Federal National Mortgage Association (Fannie Mae) lets mortgage lenders factor in a borrower's retirement assets to help him or her qualify for a loan. If the borrower is already using a 401(k), IRA or other retirement accounts for retirement income, then the borrower must show that the income received from the asset is going to continue for at least three more years.
Investment Funds
Mortgage lenders can also determine mortgage eligibility based on the borrower's investment funds. If, though, the investment accounts consist of stocks, bonds or mutual funds, then lenders can only factor in 70% of the value of those accounts to determine how many distributions remain and if they will last long enough to cover the mortgage loan.
Asset Depletion
An asset depletion mortgage is a type of home loan designed for buying a home without a regular income - i.e., job income. It lets borrowers qualify for a loan based on their liquid assets instead of an ongoing income source. The total of the borrower's assets is divided into a monthly "income."
For example, if a person has $350,000 in savings, this amount would be divided by 360 months - the traditional length of a mortgage - and that resulting number - $972 - would be used to determine eligibility for the mortgage. This strategy usually requires a significant amount in savings, CDs, money market accounts, etc.
Co-Signer
Finding a co-signer - often an adult child with a solid income - is a tried and true way to qualify for a home loan. Fannie Mae makes this relatively quick and easy with its HomeReady program. The caveat is that the borrower must be buying a primary residence, not a rental property or a vacation residence.
Reverse Mortgage
Homeowners 62 or better might want to consider a reverse mortgage. Offically called a Home Equity Conversion Mortgage (HECM), this type of mortgage is backed by the Federal Housing Administration (FHA) and can used to buy a new home.
The reverse mortgage typically covers 38% to 71% of the new home's purchase price. The rest of the purchase price is covered by proceeds from selling a current home or by using other funds. This strategy lets a buyer get into a new home that he or she might not otherwise be able to afford.
So homebuying mortgage options exist no matter one's age. Although many experts still recommend heading into retirement without a mortgage, it is clear that many retirees are instead choosing to take out a mortgage and purchase a new home to enjoy throughout their golden years.
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