Buying a new home can be a challenging and stressful time for anyone, but this can be magnified when you’re a senior. When purchasing a new home, there are a few important decisions you’ll need to make along the way. What will you do with your current home?
The obvious thing to do is to sell your current home before purchasing a new home (or try to do both concurrently), and for many seniors, this will be the right decision. You may want to use all or some of the proceeds from the home sale to help finance your new home purchase. If you still have an existing mortgage, you may need to sell your home to pay off that balance. But there are a couple of other options. If you do not require the immediate funds from a home sale, you could keep the title of your home and use it as a rental property. Many seniors find that this sort of regular income will help them keep up with their new mortgage obligations. Check here for a helpful guide on renting your home. If you don’t want to or can’t rent your home, you may also choose to transfer the title of your home to a family member.
What kind of home are you looking for?
Make sure that the reason you’re moving factors heavily into your decision on which type of house you purchase. For instance, if you are downsizing as many seniors are wont to do, it would make sense that you look for a smaller-sized home (here are some tips on that). If you are moving because you have mobility issues, you may want a home that’s on one floor or that has a smaller backyard for upkeep. If you’re considering downsizing, you may want to think about Accessory Dwelling Units (ADUs). ADUs are a type of housing that is becoming more common in many areas. ADUs are a great fit for seniors, as they are typically smaller and thus more affordable than larger-sized homes. These units often range from 400 to 800 square feet in size and provide as much space as an apartment or condo. There are even prefabricated ADUs available in some areas.
How will you finance your new home?
This is a question that not only involves what you want but also what you can get. You may want a traditional home loan, but lack of a steady income, poor credit, or debt may prevent you from getting one. In this case, you may consider using savings or your current home sale proceeds to finance your home, or you can look into using a reverse mortgage for purchase (more on that here). It’s also important to think about whether you want to take on a traditional mortgage payment every month. You need to think about if you have steady enough income through social security, investments, retirement, pension, etc. You should also consider if you’re properly planning for expenses such as taxes and insurance. Another thing to contemplate is if you would be in a financial bind if something were to happen to your spouse. Make sure you can keep up with future loan payments, even if and especially when the interest rates rise.
How will you get help with the move?
As a senior, it’s highly unlikely that you’ll be able to handle the entire move by yourself, even if you are fit and healthy. You’ll want to hire movers, but that can be a tricky process for seniors. It’s vital that you do as much research as you can and make sure to check online reviews of movers in your city. Beware of scams, as seniors are targeted with much more frequency (check here for some common scams to be on the lookout for). Don’t be afraid to take the plunge into new home ownership at an older age. There are some age-specific hurdles that you may have to jump, but in the end, it will be worth it to live in the house you need and desire.