I’m 72 and Facing a Tough Choice: Pay My Taxes or Lose My Home – What Should I Do?

A 72-year-old Reddit user is trying to figure out how to handle a tough situation. He bought a home that was too expensive, and now he’s left with bills he can’t pay. He said he got lucky for the first time playing the market, but the taxes are too high, and he’s not sure what to do. 

What’s the Redditor’s best course of action in this difficult situation?

Buying a too-expensive house was a big mistake

According to the Redditor, he bought an expensive house in Northern California with a mortgage payment that cost $6,000 per month. He was earning $10,000 monthly, so he was able to afford the bills, but now he was fired, and he only has $5,000 in monthly retirement income. He does receive $2,500 in Social Security, but the income coming in only adds up to $7,500 monthly when he’s got $10K in expenses.

The good news is he got lucky playing the market — but he said his taxes are high. He has $136,000 in the bank, which he could use to pay the bills, but he said he thinks he would rather have a lien put on the house so he could use the funds to stay in the house for a year or two longer.

He’s not sure if the mortgage company will take the money from his bank or foreclose on the house and force him to leave. And, given that he is 72, he’s wondering if he has more wiggle room because the lender might not force a senior couple to move. 

What should the Reddit poster do?

Obviously, the poster’s situation is not sustainable. You can’t cover $10,000 of expenses with an $7,500 income, plus, as he pointed out, those are just basic expenses, and he may also have maintenance and repair costs on top of that.

Several Redditors offered suggestions for the poster, including consulting with a financial advisor who provides specialized help for the elderly. There could be options, including a reverse mortgage, depending on the amount of equity that the Redditor has in the home. This could allow him to get some funds out of the house to cover his bills while staying in the home, although it would mean that he may not be able to leave the home to his heirs.

Others suggested that he explore financial assistance programs for seniors, as there are sometimes local nonprofits and government agencies that can help people to stay in their homes as they get older.   Some local governments also allow seniors to get property tax relief by doing things like volunteering. 

The poster could also contact his mortgage company and explain he has lost his job, and explore options for loan modifications. Some lenders do have options, especially for seniors, that could include lowering their rate or extending the repayment timeline to help make remaining in the home possible. 

Ultimately, though, unless he can qualify for a reverse mortgage or get some financial relief, he is going to have to leave the house. And he’s better off doing it voluntarily, and doing it sooner rather than later. If he can sell the home and walk away with some money, he can have more funds to cover housing costs in retirement rather than struggling for a year or two with payments he can’t make, causing his resources to dwindle, and incurring the costs of collection activities instituted by the bank.

Simply not paying his taxes isn’t an option, nor is staying in the house long-term without making mortgage payments. A financial advisor can help him figure out the best approach here, but the sooner the poster acts, the better, because right now he’s spending too much to stay in a house that he may ultimately lose and putting his future at risk. 

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