In the market for a new home but not quite as young as you once were? You’ve still got plenty of options, although the process is different for seniors, than it was when you were in your 30s.
Ask Yourself the Following Questions First
Do you really want to buy a home now? Even smaller homes require upkeep and maintenance. Is this your forever home, or do plan to move to an assisted living facility in the next five years? Does the real estate market where you’re looking, support buying over renting — in terms of appreciation, affordability, and value?
If you’ve made your calculations and answered the questions, and you’ve concluded that buying is the right course of action, great!
Work with a Senior Real Estate Specialist (SRES)
These realtors are trained to work with older clients and offer in-depth knowledge of reverse mortgages, the federal Housing for Older Persons Act (HOPA), and the impact of Medicaid, Medicare, Social Security, pensions, 401k accounts, and IRS on real estate transactions.
Well-connected with attorneys, insurance agents, estate planners, accountants, movers, and CPAs, SRES are experts on making your home buying and selling experience easier.
Finding the Best Home
Consider all home options — perhaps it makes more sense to buy a condominium or townhouse. They offer advantages over single-family homes like reduced maintenance, land, and common areas; however, you’ll need to factor homeowners’ association (HOA) and other monthly fees into your budget. Here’s a great article about HOA.
Weigh the pros and cons of moving into a seniors retirement community. Talk to the management and residents to get a complete picture of life there. These communities often offer various programming, whether it’s a specific focus like golf or more general options. Check the calendar of events to see if activities appeal. Are you a fan of bingo, craft classes, and day-trips? Do you want to live in a community that offers other amenities like a gym or tennis courts?
Whether you’re looking at a retirement community or “regular” neighborhood, list your must-have features the new home needs — an updated kitchen, full accessibility, an open living room, or main-level master bedroom. Universal design, a series of principles to create homes with more accessible features, has become a trend in homes built within the past 20 years.
Also, make sure to do your due diligence by researching homes and knowing the average listing price of houses in your area. In Hurst, Texas, a home’s average selling price is $178,000.
Financing Your New Home
You’ve found the perfect place, but how will you buy it? You’ll incur more risk if you choose to borrow to buy a home. You could tap into your savings, but that might not be a wise option. Make sure you talk to your financial advisor first. When you finance a home with a mortgage, you control the asset, which works well as long as it’s appreciating. However, if you borrow too much (you’re too highly leveraged), and your home’s value drops, you have zero net savings.
It isn’t impossible to qualify for a mortgage as a senior— even well into your 90s — if you can prove you’ve got the income to support the monthly payments. The Federal Trade Commission (FTC) protects older folks from age-based discrimination when seeking a loan or any kind of credit through the Equal Credit Opportunity Act.
The FHA’s Home Equity Conversion Mortgage (HECM) is popular with seniors who are:
- Age 62 or older.
- Current homeowners.
- Debt-free or nearly finished paying off the mortgage on their current home.
This reverse-mortgage program allows you to buy a new primary residence if you have the cash to pay the difference between the HECM proceeds, sales price, and closing costs.
Other mortgages that you can explore include standard mortgages, second mortgages, refinanced mortgages, HELOC (Home Equity Line of Credit), and VA loans. Check out this guide, which defines and details each of these financing options.
Happily Ever After
Selling and buying a home are among life’s biggest stressors. But once you’ve done the research, toured the homes, made your choice, signed the paperwork, moved, and settled in, you’re ready to create new, wonderful memories.
Written By: Hazel Bridges