Don’t wait until the last minute, this is what you need to know about buying a home for retirement.
The baby boomers are at the point of retirement, some choose to travel and live a life of leisure, others are excited to relocated and downsize or find a house that is perfect for their new chapter of life. Whatever you are looking for in a home and lifestyle, there are somethings to take into consideration when buying a home for retirement. It’s not quite the same as buying beforehand.
Even if it’s smaller, your new home may not be cheaper. Just because you are downsizing your home does not mean it will necessarily be cheaper. Retirees often find themselves paying more for their new location than previous location, thus possibly balancing the possible price difference on the home. Sit down with a loan officer and get professional financial advice on the life you wish to live after retirement.
When you find a place, you may need to act quickly. If you are definitely going to be selling your current home to buy your retirement dream home, you will want to have your home ready-to-sell in case you find your future home quicker than expected. You don’t want to miss out on a great home because you were ill prepared. For some people, it is financially acceptable to buy their new home before selling the current home because they are financially viable enough to make two mortgage payments for a few months while waiting for the current home to sell.
Before making a final decision, weigh all of your options. Whether you are looking for a designated retirement community or just a community in which you would like to retire there are always a range of options. From assisted medical care to pristine golf courses and five-star restaurants in walking distance to ski resorts in your back yard. Figure out what you your lifestyle will look like in retirement and find a home and area that suits your new life.
When financing, opt for a fixed-rate loan. With interest rates currently rather low, the “perfect mortgage” is a bit subjective as it will vary by the individual depending on his/her financial situation. It is recommended that you should opt for a fixed-rate loan instead of an adjustable rate loan. This is especially pertinent to retirees that are concerned their nest egg will deplete throughout retirement. With an adjustable rate loan, your payments will increase as interest rates do, which could end up poorly for retirees.
Make a large down payment so your monthly payments are lessened. For retirees on a fixed income and a tighter monthly budget, it is advisable to make a larger down payment so that throughout retirement, the mortgage payments are less of a burden. Retirees should also assess their monthly expenses to make sure their finances will work with the new home payments.
Adapted from Sunday Homes Newspaper.
For real estate inquiries, stop by the beautiful Montrêux Welcome Center at 16475 Bordeaux Dr. in Reno, NV or call us at 775.849.9444. The Welcome Center is open 7 days a week, from 9:00 am – 5:00 pm.