By Kristian Jorgensen, Mortgage Loan Officer
When making a big decision in life you’ll often get lots of advice from family and friends, but at the end of the day these decisions should be based on your situation and goals – here are tips to guide you through the decision making process of buying a home as a senior.
No matter your age the first question is: how much can we afford? Whether you’re closing in on or already enjoying retirement it’s always a good idea to consult with your financial advisor (and perhaps in turn your accountant) when making financial decisions. When it comes to mortgages, you’ll likely be looking at a 15 year or 30 year fixed rate mortgage. You have to ask yourself, is it a goal to pay the home off? For many folks on a fixed income (or soon to be on a fixed income) having a lower monthly payment is crucial to fit their budget. The 30-year fixed rate will provide that for you. If you’re thinking about how this purchase might affect those who will inherit your home should something happen to you, having equity in the home provides some security for your heirs to be able to sell the home and pay off the balance of the mortgage. This means putting down a larger down payment, which will also help keep your payment low.
What type of home and where are you looking to buy?
A common theme at this stage of life is downsizing. No need for a big house anymore – simplify, simplify, simplify. You might want to consider a smaller, one story, single family home. Less house will result in less expenses, maintenance, and physical labor/upkeep. To greatly minimize these factors, a good option is a condo or townhome. These types of homes will relieve you of outdoor upkeep. However, they come along with an added expense of monthly association dues which can really eat up your monthly budget. It could be worth the expense if you are looking to avoid outdoor physical labor or if you’re planning on traveling a lot (as many seniors do) and won’t be around to keep up on the landscaping.
For some, it’s not so much how practical the home is but more about what the home provides and where it’s situated – location, location, location! Will you have family and friends visiting on a regular basis? You might want a home that is accessible and centrally located to your loved ones. Consider the amenities you will use on a regular basis; restaurants, entertainment, medical centers, parks, golf course, etc. Although, many of us (especially Michiganders) just want to get away from it all and enjoy serene, waterfront properties with some peace and quiet. Take stock in how you seek to spend your time and also what is most practical for you and your budget.