How Seniors Can Improve Their Retirement By Buying a New Home
Blog Courtesy Jim Vogel of Elder Action
When some people retire, they try to avoid making any big changes in their life. Money is tight, but retirement is also a time to relax and settle into some hobbies and travel opportunities. Then why are so many seniors selling their old home and buying a new one?
It’s because there are a lot of advantages to buying a home as a senior. In fact, more and more people are finding home ownership beats renting even during retirement. Here’s why.
Image source: Pixabay
1. Why Buying Often Beats Renting For Seniors
Renting vs. buying is always a tough choice no matter how old you are. Home Advisor has an excellent list of compelling reasons why even seniors should purchase a new home. Some of these include:
- Home prices are going back up, so buying now gives you a strong investment.
- Interest on your mortgage can be deducted from your taxes.
- Owning a home brings stability and peace of mind during retirement.
- Interest rates are still low.
- You can find a new community better suited to your life as a senior.
The trick is finding the right market. In high-value areas like San Francisco or New York City, a new home can be too expensive to make it worthwhile. Instead, talk to a local real estate agent and ask what markets are great for home buyers. If you cannot avoid a high-value area, ask about neighborhoods that are changing for the better, as you can find lower-priced gems there.
2. Finding That New Place
Image source: Pixabay
Once you’ve decided to buy a new home, the fun part begins — finding your new place! This can be a lot of fun, but it can also get confusing as there are so many choices. Grandcare.com has a nice page listing some tips for seniors looking for the perfect home, such as:
- Look for different kinds of places like condos and patio homes. Not only are they usually cheaper than a single-family home, they often have amenities like pools and tennis courts.
- Make sure the home you love has been taken care of by the current owners. You don’t want to spend all that money moving just to pay costly repairs.
- Compare the size of your old home to the new one. You may need to downsize your belongings to fit.
When it’s time to move, you should consider hiring a senior move manager. These are professionals specifically trained to help seniors move. From deciding what belongings to donate to packing up, these managers can turn a problematic, stressful time into one that’s easy and efficient.
3. Paying For It All
Finances can be tight during retirement, but there are ways to pay for a new home. The typical way is through a mortgage. Thankfully, rules have changed to make it easier for seniors to get a mortgage. You can use income from retirement assets to help qualify for a home loan.
If you own your current home outright, then you have another great option: a reverse mortgage. Also known as a Home Equity Conversion Mortgage (HECM), this converts the value of your home into cash. You don’t sell your old home. Instead, you get a loan based on its equity. For many seniors, this allows them to purchase a smaller second home near family or good weather.
4. Start Looking For A New Home Today
Many seniors are now buying a home during retirement. That’s because there are a lot of benefits. Whether you’re a first-time buyer or you already own a house, start looking today at your options. Speak to a real estate agent about the right market, then look into mortgages or reverse mortgages to pay for it. Your new home can give you just what you want in retirement: security and stability.
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