Guest Author, Jim Vogel
You made it. Retirement has officially begun, people don’t question when you use your AARP card for a discount, and it’s just you and your spouse — in a giant house that feels empty and lonely at times.
Many seniors sell their older, bigger homes and buy one that’s more affordable and easier to maintain. But like many things, seniors need to be careful and smart about this purchase.
House Hunting For Seniors
When you were younger, you had different priorities when house hunting. You needed a place close to work, with enough room to grow a family, and so on. But when you’re house hunting as a senior, your needs and desires have changed.
When it comes to finding that new home, make sure the house is accessible for you and your spouse. You may have some mobility issues, so a three-story home might not be ideal. If one of you uses a walker or wheelchair, look for homes with wide hallways and doorways to fit those. And while you can always have handrails installed in the shower, having that already in your new home would save you time and money.
Buying That New Home
Finding the perfect house for this new stage of your life isn’t enough. You also have to pay for it.
Back when you were first starting out, a 20-year or even a 30-year mortgage made more sense, but these standard mortgage options might not be good for you now. If your mortgage outlives you, then your children can be responsible for the debt. However, banks cannot use your age as a factor in giving you a mortgage.
The housing industry is still in a buyer’s market, and that can help you. Besides, people are living longer and longer thanks to modern medicine. If you find the perfect home, don’t be afraid to take out a long-term mortgage if that makes the most sense.
Of course, that’s assuming you’re selling your old house. If you’re looking into buying a second house, you might want to pursue a Home Equity Conversion Mortgage (HECM). It’s a reverse mortgage, so you’ll get money each month based on the value of your current home. This can either cut down or even cover your monthly mortgage payments.
Do You Really Need To Downsize?
One thing you need to consider is whether you really need to downsize now that you’re retired. Sure, that’s what people have done for a long time, but what really counts is the finances. If your new home doesn’t cut your current expenses by 25%, it may not be worth it. That’s because your new home could have higher expenses you can’t see yet, such as paying more in condo fees, electric bills, or utility bills, not to mention the costs of moving supplies and the move itself. Doing the traditional move to Florida means paying a lot more in air conditioning costs.
Then there’s taking on a new monthly mortgage payment. As a retiree, your income is limited. If you fully own your home, are you prepared to start paying a mortgage again?
Take Your Time & Do Your Research
It’s not that you shouldn’t buy a new home as a senior. Many retirees do exactly that, and live a great live because of it. However, this is still a major decision and change to your life. Before you even look for a new home, spend some time researching how this affects your budget and lifestyle. Taking some time now can save you time, money, and stress later on.
