- What Are The Top Considerations For Retirees When Looking For A New Home?
- The Effect Of Your Monthly Mortgage Payment On Your Budget
- Evaluate The Additional Costs
- Ability To Qualify For A Retirement Mortgage
- Renting Vs Buying
What are the Top Considerations For Retirees When Looking For A New Home?
Moving to a less expensive home if you are a retiree is considered a significant way to cut your cost of living and improve your finances. Nevertheless, it is advisable to be aware of the resultant costs such as hiring a moving company, the associated taxes and fees. Such considerations are helpful in ascertaining whether moving a long distance to a new home is the right decision to make.
Consider the following things before you look for a new home in retirement.
The effect of your monthly mortgage payment on your budget
Financial advisors will tell you that you need to have a retirement budget. Have you factored in the cost of paying the mortgage into your budget? Evaluate your cash flow to establish the impact of getting a new home on your retirement budget. You may experience reduced mortgage payments if you are moving to a suburban home from a large, expensive home in the big city. You need to make sure that the mortgage payments that you will make are not so high as to make it hard for you to cater for your other needs and wants in retirement.
Evaluate the additional costs
Owning a home is considered cheaper than living in a rented one, although this might not be the case in every town. There are additional costs that come with homeownership, which in some cases, you might not expect. For instance, upgrades and repairs are costs that can eat into your retirement budget if you have not planned well. Thus, it is advisable to avoid moving to an older home that may require upgrades or repairs in the event that you are working on a tight retirement budget.
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Ability to qualify for a retirement mortgage
In some cases, the law might not allow you to get a mortgage due to your old age. Nevertheless, a large percentage of lenders will rely on your credit score and source of income to evaluate whether you qualify for a mortgage. Retirees experience a significant drop in their annual income after they have stopped working. Consult a lender prior to applying to find out whether your decreasing income will help you qualify for a mortgage.
Renting vs. buying
There are conditions that make renting a home much better than buying one. For example, with a rented home, you will not have to worry about homeowners insurance, or property taxes. Of course there is the issue of making monthly payments within a stipulated time; this can be a real source of stress for a retiree. But, whatever the perceived benefits, if paying a mortgage seems like a challenge to you, it is advisable to move into a rented house.
The aforementioned are some of the important and major factors you need to consider when thinking about buying a home in retirement. Once you are settled on the best home for you hiring a professional moving company will help you settle with ease.