A Beach House and Room to Enjoy Retirement
Cornelius and Loretta could afford the house. What worried them was how much money they would have left to enjoy living there.
They had spent their careers as college professors in Columbia, South Carolina. After years of planning life around semesters, retirement gave them something they had rarely enjoyed: an ordinary Tuesday with nowhere they had to be.
The more they talked about those Tuesdays, the more the beach came up.
The home that held nearly thirty years
Their 1930 Craftsman in Shandon was easy to love. Tree-lined streets, wide sidewalks, front porches that invited conversation. They had built friendships there that made a quick walk around the neighborhood anything but quick.
They bought the home in the late 1990s for $165,000 and cared for it for nearly thirty years. A roof when it needed one. New HVAC, flooring, and windows. About five years earlier, they had remodeled the kitchen and primary bathroom.
They had invested in keeping their home comfortable and well maintained. Over time, those improvements, the location, and market appreciation helped them build nearly $800,000 in equity.
The house was paid off. Although taxes and insurance were substantial, they were manageable without a monthly mortgage payment.
That mattered to two people early in retirement who wanted their money to last.
Still, their conversations about staying forever kept producing a longer renovation list. Making an older home work for their next stage of life would take money, time, and careful decisions about preserving the character they loved.
“By the time we finish all of this,” Loretta said, “what will we have spent?”
They considered borrowing against their equity for the improvements. Adding a required monthly loan payment, though, was an obligation they were reluctant to take on.
Eventually, they started looking at newer homes around Columbia. Nothing felt quite right. They kept comparing every location to Shandon, and Shandon kept winning.
Then their conversation changed.
Where did they actually want to spend retirement?
A familiar style in a different setting
Little River, South Carolina, gave them a reason to get excited.
They could live near the ocean and still drive back to Columbia to see their friends. Cornelius could picture more time on the golf course. Loretta pictured beach mornings that did not end with packing up for the trip home.
When they found a new construction home with modern Craftsman details, it felt familiar enough to be theirs and different enough to offer the fresh start they wanted.
Their budget was around $800,000, but they hoped to spend less. There were moving expenses to consider, furniture to buy, and, according to Loretta, a very important coastal purchase: a really cool golf cart.
They negotiated the home to $750,000.
On paper, that was below their budget. In conversation, the cushion already felt smaller.
Selling expenses would reduce what they received from their Columbia home. Buying and moving had costs of their own. And every dollar used for the new house was a dollar they would no longer have readily available.
The on-site sales agent overheard them discussing whether to pull money from their retirement portfolio for furniture.
“Before you decide how to pay for everything,” she suggested, “you might want to talk with a lender who specializes in retirement mortgage options.”
Cornelius was hesitant. They had worked hard to pay off one mortgage. Why start another?
Loretta wanted to hear what was possible.
A conversation that began with Columbia
When Loretta called me, we started with Columbia stories.
I had lived there for twenty-seven years, so Shandon and the downtown area were familiar territory. We even discovered connections we shared. Some people would call that a small world. It felt like a little divine timing to me.
Then I asked what mattered most about the move.
They wanted a home they could enjoy for years, with fewer immediate renovation projects. They wanted to stay comfortable with their monthly expenses. And they wanted enough money available that enjoying retirement would not require a debate over every purchase.
That gave us something useful to work through.
I introduced them to a Home Equity Conversion Mortgage for Purchase, often called HECM for Purchase or H4P. It allows eligible buyers age 62 and older to combine a substantial down payment with reverse mortgage financing to purchase their primary residence.
Both Cornelius and Loretta were over 62 and would be borrowers on the loan.
“Like a traditional mortgage, this is a loan secured by your home,” I explained. “The repayment structure is different. With a traditional mortgage, you generally make scheduled principal and interest payments. With a HECM, monthly principal and interest payments are not required as long as you meet the loan obligations.”
If they chose not to make payments, interest, mortgage insurance, and applicable financed charges would increase the balance over time. That borrowing cost would need to be weighed against the benefit of keeping more cash available.
The numbers that changed the conversation
For this illustration, we assumed $255,000 in HECM proceeds available toward their purchase price. Actual proceeds depend on age, applicable interest rates, the eligible property value, and program requirements.
The purchase-price breakdown looked like this:
| Purchase funding | Illustrative amount |
| New home purchase price | $750,000 |
| HECM proceeds applied toward the price | $255,000 |
| Their cash toward the price | $495,000 |
The $495,000 was their share of the purchase price, not a final cash-to-close quote. Closing costs, mortgage insurance, prepaid expenses, and any required set-asides would also need to be accounted for, including how any financed costs affected available proceeds.
Compared with putting $750,000 in cash toward the home, this approach would keep $255,000 more of their own money out of the purchase price, before differences in financing costs. Their final reserves would depend on actual net sale proceeds and all transaction expenses.
Loretta did not need long to picture what that flexibility could mean.
“So I can get the pool I always wanted AND live at the beach?”
Cornelius, who had apparently just learned that a pool was now on the agenda, had questions.
Cornelius wanted the whole picture
“Does the bank own our house?”
No. They would own the home. The lender would have a lien securing the mortgage, just as with other home loans.
“What happens if one of us dies?”
With both spouses as borrowers, the surviving borrower could remain in the home without the loan becoming due solely because the other spouse died, provided the survivor continued meeting the loan obligations.
“And if we want to make payments?”
They could. HECMs allow voluntary partial payments or repayment in full without a prepayment penalty. Payments would reduce what they owed; whether the balance declined overall would depend on the payments compared with accruing charges.
“When does it have to be paid back?”
Generally, when they sold, when the last borrower permanently left the home, or when the last borrower died. Failing to meet obligations such as taxes, insurance, or maintenance could also cause the loan to become due. Any applicable protections for an eligible non-borrowing spouse would need separate consideration.
If they eventually sold, the outstanding balance, including accumulated interest and charges, would be paid from the sale proceeds. Any remaining equity after the payoff and selling costs would be theirs.
With each answer, Cornelius became more comfortable asking the next question.
We talked about the upfront expenses and the growing balance. We compared financing with paying cash. We also talked about the new household budget, including coastal insurance, any flood coverage needed, and the ongoing costs of Loretta’s proposed pool.
New construction might mean fewer near-term repair projects. It would still need a realistic maintenance budget.
Loretta could dream about the backyard while Cornelius checked the numbers. Both deserved room in the conversation.
Planning for the years they could not picture yet
Cornelius took the proposal to his financial advisor.
He wanted to understand how keeping more money outside the house would affect their retirement plan, including what would happen to household income when one of them died.
Separately, they decided with their advisor to allocate a portion of their retained assets to a fixed income annuity with a survivor income option. They reviewed the payout terms, costs, access restrictions, and how much money should remain readily available for emergencies.
That survivor feature mattered. An annuity does not automatically continue the same income to a surviving spouse; its contract and payout election determine what happens. Guarantees also depend on the issuing insurer’s ability to pay claims.
The annuity was their separate planning decision with their advisor, not a requirement or recommendation from me for obtaining the mortgage. Borrowing has a cost, and tying up retained funds carries tradeoffs. Both needed to be considered together before they committed.
For Cornelius, looking after Loretta meant thinking beyond moving day.
For Loretta, enjoying today still belonged in the plan.
A new address with room for their life
Leaving Shandon was emotional. Nearly thirty years of memories do not fit neatly into moving boxes.
But their friendships could travel. There would be visits back to Columbia and invitations for friends to come spend a weekend near the coast.
The move gave them a home suited to the everyday life they wanted. Considering a different way to finance it gave them more room to plan for that life.
They still had a budget. They still had responsibilities. And they understood that preserving cash through borrowing meant carrying a loan balance that could grow.
They also had choices they had not known were available when they first walked into the model home.
That is why I want these conversations to happen before someone assumes paying cash is their only comfortable option in retirement.
If you are considering a move, we can look at what you want your next home to make possible, how much money you want to keep available, and which financing options fit your circumstances. A no-pressure conversation can give you more to work with before you make a decision.
As for Cornelius, he had one more question.
“Can we at least price the pool before you pick the golf cart?”
Loretta was already smiling.
This story is for illustrative and informational purposes and does not represent a loan commitment or financial, tax, legal, or investment advice. Figures are hypothetical, not a current rate or proceeds quote. HECM eligibility, available proceeds, and cash required vary by borrower and property. Borrowers must meet program requirements, complete HUD-approved counseling, occupy the home as their primary residence, maintain it, and pay taxes, required insurance, and other property charges. Failure to meet loan obligations can result in foreclosure. Interest and mortgage insurance accrue on the outstanding balance; financing can reduce future equity. Consult qualified professionals about your circumstances. Annuities have separate costs, restrictions, and risks and are not required to obtain a HECM.