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A Simple Senior Guide to Home-Buying
Many seniors find themselves looking to buy a new home in retirement. Whether it’s to be closer to grandchildren, to have less upkeep to manage, or to finally move to your dream locale, home-buying as a senior can look different than purchasing a home earlier in life. Use this guide from Enjoying Aging to help navigate senior home-buying challenges and get yourself into the home you desire without difficulty.
1. Determine What You Can Afford
For many seniors, homes purchased in retirement are the result of a desire to downsize. This can be a positive for home-buying at this stage as it can mean a smaller mortgage is necessary and therefore easier to obtain.
Use a home affordability calculator to help give you an idea of what kind of payment your budget is able to handle. Simply enter your annual gross income and your monthly debt, choose a down payment you can manage, and pick the term of your loan.
2. Find Appropriate Funding
Getting a home loan comes with some unique challenges for seniors. The law prohibits lenders from discriminating against applicants due to age, but they can still take your age into consideration when deciding whether to approve your application.
Lenders want to ensure that they will get their money back, so it’ll be necessary to provide them with proof that you have good credit and either a high-earning job or enough money in savings or retirement to keep up with future mortgage payments. Additionally, you will probably have to accept a shorter loan term. For seniors, a 15-year fixed-rate loan is likely to be easier to get approved for.
3. Research the Local Housing Market
Get an idea of whether the market is favoring sellers or buyers at the moment by using data about recent home purchases. Look up what homes have sold for in the past year as well as what they sold for prior to that to see how the amounts compare and to get an idea of how much you can expect to pay. It can be more expensive if you buy in an area that has a limited number of properties for sale as this favors sellers. If this is the case, you may want to consider putting off purchasing a home or looking in different areas with more robust options.
4. Look for Senior-Friendly Features
Aging isn’t easy for anyone, but homes have become much more senior-friendly in the last few years. There are many modifications available that you may want to look for when considering potential homes. Railings for stairs or replacing stairs with ramps can be helpful, as can smart home devices that allow seniors to operate things such as their televisions, lighting, and heating systems with voice alone.
Bathroom modifications are particularly popular since so many falls occur in bathrooms. These can include safety bars to help to get in and out of the bath an easier process and toilets that are taller to make sitting bathtubs have a doorand standing up easier. Some that allows entrance into the bath as though it were a shower to minimize the likelihood of accidents, and built-in benches in showers can make it easier to manage to get clean without worrying about stability.
5. Consider Purchasing a Home Warranty
If you’re considering whether a home warranty is necessary, having one can provide peace of mind in knowing that if something goes wrong with a home appliance or system, there is someone who can fix it. A home warranty is an annual service contract that covers the repair or replacement of many of the most-used items in a home, such as the air conditioner, refrigerator, oven, and dishwasher. Most home warranties also cover the HVAC system, electrical system, plumbing, and water heater.
Senior home buying can feel overwhelming, but with the right tools and planning, it can be a breeze. Research homes and what you can afford, shop for a mortgage, prioritize homes with senior-friendly features, and consider purchasing a home warranty.
6. Consider A Reverse Mortgage For A New Or Existing Home
A reverse mortgage can be a valuable option for the right situation. For those who have paid at least fifty percent or more equity into their home, a reverse mortgage can solve many financial worries. In the example of downsizing, when your current home sells you can take part of that money and buy a new house. Then, as long as you pay fifty percent or more down on the new home you can live there with no payments and keep the rest of the money for emergencies. If you decide to stay in your current home and have fifty percent or more equity in your home you can get a reverse mortgage and make no more payments as long as you or your spouse continue to live in the home.
There is a lot of misinformation going around about reverse mortgages, and it is not for everyone, but in the right situation, it can make a huge difference in the quality of life for you and your loved ones. To see if a reverse mortgage is right for you, visit Enjoying Aging/Reverse Mortgage for more information.
7. Will You Need The Help Of A Realtor?
Regardless of your choices, it is always best to seek the advice of a professional. A realtor can help with selecting a new home, but remember, they only make money if you buy, so their primary motivation is to sell you a home. A mortgage professional can advise you on different mortgage options, but again, they only make money if you take out a loan. A financial advisor can review your situation and help you understand your options and then point you in the right direction. In many cases, they will be able to refer you to a person that can help you with whatever decision you make.
A special thank you to Lydia Chan at alzheimerscaregiver.net for contributing this article.
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