Buying a house can be rewarding at any time of life, including just before retirement.
It’s never too early or too late to buy a home. Having your own home offers great peace of mind during retirement.
Still, it’s important to do research and come up with a home-buying strategy that makes sense for you. Buying a home in your 50s or 60s is very different from doing it in your 20s or 30s.
Let’s look at ways to clear the path to the best decision — and the best home.
1. Don’t Be Tempted to Reduce Your Retirement InvestingnNo matter how close retirement may be, this is the biggest thing: Don’t cut your investments! Reducing retirement savings by what seems like a tiny amount — say, $100 a month — can have major repercussions in the future. Even if retirement is only a few years away, you could still find yourself thousands of dollars short of what you need for a comfortable lifestyle. Your home is an asset, but it won’t replace retirement investments. Keep those separate.
2. Look at Your Budget Before and After RetirementnEven with a handsome retirement nest egg, you’ll still need to make some changes when you shift from wages to a fixed income. But it may not be as big a change as you think. In a sense, most jobs offer a
3. Seek Out Financing Before Retirement BeginsnAlthough retirement means lower income, you can still benefit from your years of work. If you are at least three years from retirement, you are still in a strong position to use your wages or salary as the basis of your mortgage loan consideration. Mortgage lenders are prohibited from discriminating against potential borrowers based on age. Still, they will want to understand your income and ability to pay back a loan. Both your overall financial picture and your credit score will tend to be better while you are still in the workforce. There is nothing dishonest about using this as the basis of your mortgage loan consideration as long as you plan for how circumstances may change in the future!
4. Think Seriously About Your Post-Retirement NeedsnEvery home you will ever own is a snapshot of your needs at one particular time in your life. The home you buy before retirement will be very different from the one you bought soon after college. Deciding what you’ll need is essential. While many retirees will opt for a smaller home, others desire additional space to host their children and grandchildren. Will you need specific safety features? Are you comfortable with a two-story home or do you want the convenience of a single floor? What amenities matter to you? Going into the process with a clear picture in mind will save you both money and time.
An experienced real estate agent is your best friend in the home-buying process.