Buying a retirement home requires taking a deep dive into your changing needs as you age. After all, it’s not just about picking an ideal location or the best features. You also have to consider that this is a big move that will significantly impact your finances.
This investment will take careful planning and preparation to make the right decision. Here are some things you need to remember before buying your forever home.
1) Create a priority list
Before locking yourself into any specific property options, you should make a list of top priorities you’d like in your retirement home. Ask yourself questions like:
- Will I be downsizing my lifestyle?
- Should I be closer to family members at that time in my life?
- Do I want to have guest bedrooms for visitors?
- What are the possible future property developments in the surrounding area that may affect my living conditions?
- Will I handle my yard work, or will there be people I can rely on in the area for landscaping?
You may not be able to figure out all the answers until it is time to retire. But considering these factors as early as possible will most likely help you pick the property that suits you best.
2) Pick a location that gives you access to vital needs
You may initially be attracted to settling down in a remote, idyllic town that boasts a picturesque backdrop. However, consider mobility as well when picking out a place to settle down, especially since you’ll be older when you stay here. You may not always be able to drive, so be sure that public transportation is available and you have access to necessities like shopping, hospitals, and recreation.
3) Apply for a mortgage while you are still employed
Mortgage applications will generally be approved easier if you buy a retirement home while you are still employed. Your debt-to-income ratio will look better, making you more eligible to receive a bigger mortgage.
The Equal Credit Opportunity Act protects retired buyers from being rejected outright by lenders for mortgage applications. However, banks can still make things difficult for those who choose to buy a home after retiring. Your life expectancy may not be part of their criteria for judging your application, but the income that you receive will matter greatly.
If you apply for a mortgage after retirement, you may receive a smaller mortgage or bad terms that could put you in debt at a time when you no longer have a regular income.
Review the current state of your retirement fund, savings accounts, and any source of passive income that you can use when it’s time to quit the workforce. Calculating the costs enables you to grab a mortgage plan that works for your budget and gives you a chance to prepare for any future expenses.
4) Be conscientious when planning your retirement budget
It’s not just necessities or healthcare that you should be financially ready for once you retire. Since you won’t have a steady income, you should account for all possible costs.
Part of the expenses you should consider when planning your retirement budget is the cost of maintaining your retirement home. Your budget must include the price of utilities, probable repairs, or association dues if it will apply. Costs will likely increase due to inflation and other factors, so it’s good to follow money-saving tips and explore options for passive income to bolster your retirement funds.
5) Consider home features
As your body changes, so will your ability to do things. The ideal retirement home may need specialized fixtures or modifications such as ramps, wheelchair access, walk-in tubs, etc.
Single-level houses with minimal steps are ideal for senior citizens. Having easy access to appliances also helps avoid accidents due to poor reflexes. Wide corridors and walkways are also a must to accommodate walkers or wheelchairs to allow you to move around the property with ease.
Plan and prepare for the future
There are many things to think about when buying a retirement home. It can be overwhelming to assess your financials while thinking about your current and future needs at the same time. The whole process takes time and effort, but knowing that you put in all the necessary work before going for the deal is key to ensuring that you get the retirement home of your dreams.
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