Retired and Buying a home? What you need to know
Retirement has always been a tricky thing to plan for. There are so many variables depending on overall health, finances and more. If you’re retired and considering buying a home or vacation property, there are some important things to consider first.
Depending on your current age and the age of any partners you may be purchasing the home with, you need to plan what your mortgage payment will be and how long it will last. Standard homebuyers opt for a 30-year mortgage because often that makes a monthly payment more affordable. Depending on the fluidity of your financial situation a 30-year mortgage might be your only option, and if it is, you should consider what age you’ll be when that 30 years is over.
A better option would be to go for a shorter term mortgage, like a 15-year. Again, depending on your financial situation, this is also tied to how much you can put down on the house and how much you can afford to pay in a monthly situation.
Depending on your age in relativity to your health, which is a hard thing to plan for, you may also want to consider the financial situation that your kids are in. If something ever were to happen to you or your partner, you would have to consider who would be financially responsible for the property and mortgage.
One of the benefits that many people look forward to in retirement is no monthly mortgage payment, because they anticipate that they will have paid off their house or property by then.
A great idea to consider if you do have a house that’s close to being paid off, and you’re looking for a vacation property: invest in something smaller. If it’s a vacation home, try for a condo or a small house. Look for something you can invest in for a lower price, and possibly make money on. If it’s a condo in a desirable location, you could rent it out for the portion of the year that you don’t use it, same with a lakeside property.
You need to consider what your housing needs might be. Perhaps you want to invest in a smaller property that will eventually become your main residence. Consider one-floor options, consider location to amenities. It can be hard to plan for your retirement age with so many factors up in the air, but it could save you a headache later if you plan and consider these things now, when you’re house hunting.
Consider what sort of monthly payment you want to be responsible for when you’re retired. If you’re taking equity from one home to another, buying a new property may not present the same challenges as buying an additional property might. Consider the location of your new home or property, consider the layout. Plan ahead and you could make quite the smart investment.