Are you retiring soon? Here are a few things to consider before purchasing the home you want to spend the rest of your golden years in.
- Mortgage qualification
Although federal law states that lenders can’t discriminate based on age, lenders will still consider your sources of income and your credit score to determine if you can qualify for a mortgage. Before you shop for a loan, talk with a lender to run your numbers and see if you will be able to get a loan.
- Your retirement budget vis-a-vis monthly mortgage payments
Like in all cases, you should take a look at your finances before you buy a home. In this case, consider how investing in a new home will affect your retirement budget and cash flow. Most people opt for a 30-year mortgage as the payments are quite low, but getting that type of plan might also be a thorn on your side for 30 years. Take note of your projected monthly expenses once you move, and shop for a mortgage plan that fits your ability to pay without compromising your wants and needs.
- Renting vs. buying a home
Are you better off renting or buying a home? Both require monthly payments, but renting gets you off the hook from property taxes and even homeowners insurance. Consider your needs and long-term goals to be able to identify if it would be better for you to just rent or purchase a new home.
- Additional housing costs
As you might very well know, homeownership comes with an array of additional costs. This includes predictable ones like property taxes and HOA fees. Meanwhile, there are also unexpected repairs and what not. While you can prepare for these expenses before purchasing a home, do consider if it will significantly cut into your retirement savings.
- The best mortgage term
In terms of shopping for a mortgage, it’s important to consider what term you will be able to afford without affecting your savings. As mentioned earlier, most people opt for 30-year terms, but you should still take a look at 10- or 15-year terms and see if either of these will work best for you and your finances.
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