There are many reasons to buy a home in your senior years. Perhaps you want to downsize to a smaller house, move closer to family, or migrate to warmer weather for retirement. However, as a senior homebuyer, you need to be cautious when purchasing a home. While a smart purchase could set you up for comfortable retirement living, the wrong move could threaten your financial and physical health.
As you search for the right home for your
senior years, keep these considerations in mind.
Renting vs. Buying
As a long-time homeowner, it only feels natural to purchase your next home. However, buying a home in retirement isn’t the right choice for everyone. If you expect to move into an assisted living community within a few years, you’re better off renting for now. Seniors living on a tight budget also benefit from renting. With a landlord to handle home maintenance and repairs, renters are protected from unexpected housing expenses.
If you value the ability to own pets, bequeath a home to your children, and avoid costly rent increases, buying is the ideal choice for you. Homeowners are also free to modify their homes to suit their needs, an important benefit if you plan to age-in-place.
Getting a Mortgage vs. Paying
There’s a certain satisfaction that comes with buying a house outright. A cash offer also makes you a more competitive buyer. However, getting a mortgage might be the smarter financial move.
Tying up all your cash in a house could leave you house rich and cash poor. By purchasing your house with a mortgage and investing your cash instead, your money stays liquid so you can access it for cash flow or to weather a financial emergency. If your investment yields are higher than your mortgage rate, investing could also grow your nest egg for additional retirement income. Whether you should pay off your house or invest depends on your personal financial situation; read Morningstar’s advice for help making the decision.
Don’t worry about being unable to get a mortgage. It’s illegal for lenders to discriminate based on age. Retirees can also use Social Security payments, pensions, and retirement distributions to qualify for a mortgage, provided the income meets certain qualifications.
Planning Ahead for Aging-in-Place
The vast majority of people want to live at home as they age. If you’re thinking about buying a home in retirement, odds are you’re one of them.
If you don’t plan to move again, it’s imperative you purchase a home that’s as safe and liveable at age 85 as it is today. Unfortunately, accessible homes are hard to find. As Curbed reports, the most recent numbers show only 3.5 percent of U.S. homes offer the basic accessibility features seniors need.
Keep in mind that aging-in-place requires more than grab bars and wheelchair ramps. Many of the features that make homes liveable for older adults are subtle. Features like open floor plans, wide doorways, and ambient lighting aren’t what most people imagine when thinking about aging-in-place. However, buying a home with these features makes senior living safer and more comfortable. An aging-friendly home should also offer first-floor living, low-maintenance landscaping, and a safe and convenient neighborhood.
Finding a home that meets these standards may take some time. Senior buyers should be prepared for a lengthier house-hunt than when they were younger.
As you can see, there’s a lot to think about when buying a home in retirement. If you want to make the right decision the first time and avoid moving again in 5-10 years, work with a real estate agent to find your next home. A knowledgeable agent will help you navigate the financing process and find a home that you’ll love today and 20 years from now.
Lucille Rosetti has a website (and more!) devoted to these types of topics. Be sure to give her a visit at The Bereaved.
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